FinCEN

Trung Nguyen, a man from Danvers, Massachusetts, USA, was sentenced to six years in prison for operating an unlicensed money transfer service, laundering over $1 million into Bitcoin for scammers and drug traffickers. The case, announced by the U.S. Department of Justice, highlights the legal risks in the crypto market. The article summarizes the case details, its impact on the cryptocurrency industry, and lessons for investors in the U.S.

Trung Nguyen sentenced to 6 years for unlicensed Bitcoin operation.
Laundered over $1M for scammers and drug dealers.Used fake vending company to evade detection.Failed to register with FinCEN, violating federal law.Ordered to forfeit $1.5M in illicit proceeds.

#Bitcoin #MoneyLaundering #Massachusetts #FinCEN

Trung Nguyen, a 48-year-old from Danvers, Massachusetts, received a six-year prison sentence for operating an unlicensed Bitcoin exchange that facilitated money laundering. The sentencing, handed down by Judge Richard G. Stearns in Boston federal court, also includes three years of supervised release and a forfeiture order of $1.5 million. Nguyen’s conviction stems from his role in converting cash to Bitcoin for scammers and drug dealers between 2017 and 2020.

Nguyen ran his operation under the guise of National Vending, a supposed vending machine company. He used techniques learned from an online course to conceal his activities, avoiding the term “Bitcoin” and creating fictional supplier lists to mislead banks and authorities. His business processed over $1 million in illicit funds, bypassing federal anti-money laundering regulations.

Scheme to Evade Detection
Nguyen deliberately failed to register with the Financial Crimes Enforcement Network (FinCEN), a requirement under federal law. He neglected to file Suspicious Activity Reports or Currency Transaction Reports for transactions exceeding $10,000. To avoid scrutiny, Nguyen broke large cash deposits into smaller sums, spreading them across multiple bank branches over consecutive days.

He often met clients in person to collect cash, exchanging it for Bitcoin with a 5% commission. These transactions, conducted through encrypted messaging apps, were designed to obscure the money trail. Nguyen’s methods included technologies that made tracing Bitcoin transactions difficult, further shielding his clients’ identities.

In May 2023, Nguyen was indicted for operating an unlicensed money-transmitting business and two counts of money laundering. A jury convicted him in November 2024 after a five-day trial, finding him guilty on one count of money laundering and the unlicensed business charge. He was acquitted on a second money laundering count.

“This sentence reflects our commitment to stopping cryptocurrency-related crimes,” said Assistant U.S. Attorney Seth B. Kosto. “Nguyen’s actions enabled scammers and drug traffickers to hide their proceeds, undermining financial regulations.”

Nguyen’s operation, dubbed “DCS420” in court documents, catered to clients involved in romance scams and drug trafficking. He processed hundreds of thousands of dollars for victims deceived into sending Bitcoin to overseas fraudsters. His failure to comply with anti-money laundering laws put vulnerable individuals at further risk.

Broader Crackdown on Crypto Crime

The Department of Justice has intensified efforts to target illegal cryptocurrency operations. Nguyen’s case mirrors a recent Texas case where another individual received a prison sentence for laundering over $1 million in fraud proceeds using similar methods. Authorities emphasize that unregistered money-transmitting services pose significant risks to financial systems.

Nguyen’s conviction highlights the government’s focus on enforcing compliance with anti-money laundering laws. “Unlicensed operations like Nguyen’s create opportunities for criminals to exploit digital currencies,” said Assistant U.S. Attorney Benjamin A. Saltzman. The forfeiture of $1.5 million underscores the financial consequences of such schemes.

The case also draws attention to the challenges of regulating cryptocurrencies. Bitcoin’s decentralized nature makes it attractive for illicit activities, prompting stricter oversight. The Treasury Department’s FinCEN requires all money-transmitting businesses to register and implement anti-money laundering programs, a mandate Nguyen ignored.

The United States has announced plans to disconnect the Cambodian platform Huione Group from the American financial system due to its involvement in large-scale money laundering. According to the Financial Crimes Enforcement Network (FinCEN), Huione, including Huione Pay, Huione Crypto, and Huione Guarantee, processed transactions worth $4 billion related to cybercrime, including the North Korean hacker group Lazarus. The platform, which operates via Telegram, has become a hub for fraudulent operations such as 'pig butchering' schemes and money laundering.

Overview of the incident

On 01/05, the US Department of the Treasury, through the Financial Crimes Enforcement Network (FinCEN), proposed a complete ban on Huione Group – a large conglomerate in Cambodia – from accessing the US financial system. The reason: this group is accused of large-scale money laundering for the notorious North Korean hacker group – Lazarus Group, and facilitating numerous cross-border cryptocurrency investment frauds.

Documents submitted by the defense team for Roman Storm, the lead developer of Tornado Cash, revealed that prosecutors were aware since 2023 of FinCEN reports (Financial Crimes Enforcement Network) confirming that non-custodial cryptocurrency mixing platforms are not classified as 'money transmission businesses' under U.S. law.