On December 7, a man named Brannen Sage Mehaffey pleaded guilty to operating an illegal cryptocurrency money transfer exchange.
Brennan Mehaffey was arrested in October 2020 by special agents from IRS Criminal Investigation. He was originally accused of illegally exchanging virtual assets for cash. According to the case documents, he transferred more than $4,000,000 between January 2018 and March 2020, charging 8% fees for his services.
To conduct the exchange, Mehaffey used peer-to-peer sales, Bitcoin ATMs and accounts at LocalBitcoins. A large portion of the assets were traced to bank accounts at Chase Bank, Wells Fargo Bank and Bank of America, which are owned by the suspect.
Mehaffey’s business was operated without legal registration or compliance. Consequently, the income generated from it was concealed and therefore not taxed. The investigation lasted for over a year before the suspect pleaded guilty until the suspect pleaded guilty.
According to Brian Watson, Public Information Officer with IRS Criminal Investigation, Mehaffey may face 5 years in prison or monetary penalty amounting to $250,000.
Lack of regulations
Meanwhile, major players in the US cryptocurrency industry argue that the government needs to clarify regulations in order for the business to grow. As The New York Times reported on December 8, representatives of the six largest crypto companies met at a hearing of the US House of Representatives’ Financial Services Committee to discuss risks and opportunities.
Among other things, they criticized US SEC Chairman Gary Gensler for his unclear stance on cryptocurrencies. Although he seems friendly towards the industry, he lacks clarity in his actions. Back in September 2021, SEC threatened Coinbase with a lawsuit for launching a crypto lending platform, as reported by CoinIdol, a world blockchain news outlet.
The exchange giant was blindsided by such a threat without any clarification. During the hearing, the company’s head in the US, Alesia Haas, argued that they were willing to work within a proper regulatory framework. The problem is that no such framework exists.
Perhaps proper regulation would actually facilitate the growth of the legal cryptocurrency business in the US. While Brannen Sage Mehaffey’s actions were outright criminal, some other companies in the industry may be in trouble precisely because of the uncertainty of existing regulations.
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