LBC Trader ‘Bitcoin Maven’ Gets 1-Year Sentence
In what is being described as a unique case involving Bitcoin trading and the Government of Southern California.
A woman who was previously arraigned for illegally trading Bitcoin has been handed a one-year prison sentence.
The woman in question, Theresa Lynn Tetley is a LocalBitcoins (LBC) who operates under the username ‘Bitcoin Maven’.
What is LocalBitcoins (LBC)?
As Bitcoin grew in popularity, a lot of people wanted to invest, and trade with the digital asset without linking their bank account to the operations.
LocalBitcoins has created an eBay-like marketplace where users can post ads and buy directly from each other, rather than an exchange.
LocalBitcoins allows users who to post adverts either to buy or sell Bitcoins. Another user on the platform sees the advert and reaches out. When both parties agree on a price, the digital asset is locked into an escrow until the seller acknowledges that the payments have been made.
Buyers are provided with alternative methods of payments, including paying with cash, bank transfers, gift cards, and others.
Theresa or ‘Bitcoin Maven’ has been operating on this platform from the last three years, from where she has performed illegal transactions, although not through the entire time she operated as a LocalBitcoins trader.
Theresa was arraigned by the U.S Department of Justice on accounts of operating an illegal, unregistered money service business (MSB) in the state.
It was reported that Theresa had traded Bitcoin for between $6 million and $9.5 million within the three years of operating the business.
Illegal Bitcoin trade is not all Theresa was accused of. According to the federal prosecutor’s court papers, Bitcoin Maven fueled a black-market financial system in the Central District of California that purposely and deliberately existed outside of the regulated bank industry.
Puneet V. Kakkar, the Assistant U.S attorney explained that the business operated by Theresa was used for nefarious activities.
It was also revealed that Theresa made at least one transaction with an undercover agent where she was told her deal was to hide narcotics-related cash.
Although convicted of unlicensed Bitcoin trading, and hiding proceeds from a narcotics-related activity, Tetley through her guilty plea revealed she never had the intention of going illegal with her trade.
For her, it all started as a hobby. The Bitcoin Maven explained;
“But I screwed up epically. It quickly became a business and I broke all sorts of laws. I have learned my lesson”
Tetley’s case is just a demonstration of what can be achieved when cryptocurrencies are used wrongly.
The prosecutor in charge of her case said jailing Tetley is important to send a signal to others using Bitcoin and other digital assets for criminal operations and schemes.
Appeal from Federal Prosecutors
In addition to a 30-month sentence, the government requested that possession of Tetley that were confiscated at the time of her arrest also be fortified.
The confiscated possessions include; 40 Bitcoin (BTC), $292,264 in hard currency and 25 gold bars.
However, after pleading guilty to the charges, the defense lawyer appealed that the prison time of Tetley is reduced to just 12 months.
On Monday, the U.S Department of Justice announced the prison sentence to be served by Tetley. The official announcement reads;
“’Bitcoin Maven’, who admitted to operating an unlicensed Bitcoin-for-cash exchange business and laundering Bitcoin that was represented to be proceeds of narcotics activity, was sentenced today to 12 months and one day in federal prison, three years of supervised release, and a fine of $20,000”
The U.S District Judge, Manuel Real, granted an order for the forfeiture of the confiscated possessions of Theresa Lynn Tetley. Tetley is expected to serve the three years of supervised release handed to her, after serving her time in the federal prison.
The court concluded that operating an unlicensed Bitcoin trading business, Tetley had facilitated laundering from one individual who is suspected of receiving Bitcoin from unlawful activities, such as sales of drugs on the dark web.
The U.S government has been actively trying to crack down the unlicensed use of cryptocurrencies because of the anonymous nature of the assets.
Last month, the Bill H.R 6069 was passed by the U.S House of Assembly in order to prevent illicit use of cryptocurrencies in the country.