Burrell exchanged the US cash in Mexico and San Diego and operated a million dollar of unregulated cash.
On April 8, 2019, US authorities showed a punitive approach toward cryptocurrency-related fraud. The US court sentenced 22-year old Jacob Burrell Campos for 2-year imprisonment for operating unlicensed Bitcoin exchange. He operated the Bitcoin exchange without registering with the Financial Crimes Enforcement Network of the US Department of Treasury. Along with 2-year imprisonment, the US District Judge Marilyn L. Huff has ordered to surrender a sum of US$ 823,357, the illicit profits he earned while operating the exchange. Burrell is a US citizen and Mexican resident and has been held in the custody since August 2018 without bail.
In October 2018, he pleaded guilty saying he was engaged in anti-money laundering measures and did not keep track on the customer and their money come from. According to a plea agreement, Burrell advertised his business on Localbitcoins.com and communicated with his customers via texts, emails, and encrypted applications. Although Burrell wasn’t accused of explicitly committing a crime, he was simply involved in the unlicensed exchange. Burrell admitted that, at first, he started as a customer to US-based, regulated Bitcoin exchange. However, his account was taken down for suspicious transactions.
Thereafter, he turned to Bitfinex, which is a Hong Kong-based exchange, before finally launching his own illegal exchange in 2016. He exchanged his US cash that was kept with San Diego-based metal dealer and in Mexico with Joseph Castillo. Burrell provided an exchange to his clients with privacy and anonymity and exchanged over a million dollars in unregulated cash. Bitcoin is still largely unregulated in the US and its demand has not decreased despite seeing a significant decline since late 2017. The platforms such Localbitcoins.com are becoming increasingly popular where vast quantities of trade remain untracked.