Crypto trader sentenced to prison for money laundering

An Arizona crypto trader was sentenced to 41 months in federal prison after being convicted of money laundering, the Department of Justice announced Thursday.

Tomas Mario Costanzo, 54, known online as Morpheus Titania, will receive a shortened sentence because he has been in custody since April 2017.

In late March, Costanzo was found guilty of five counts of money laundering by a federal jury in Phoenix. Federal agents began investigating Costanzo in 2014 after he posted an ad on an exchange website that he was willing to engage in cash transactions of up to $50,000.

When he was approached by agents posing as drug dealers, Costanzo “provided them with bitcoins and told them it was a great way to hide his activities from law enforcement.”

“The jury trial found that Costanzo had received $164 over two years. 700 from agents (whom he believed to be drug dealers) in exchange for Bitcoin, which was supposed to help them hide their illegal activities,” the statement states.

Last year, federal agents raided Costanzo’s home on suspicion of illegal possession of ammunition and money laundering using cryptocurrencies. The raid resulted in his arrest. The judge also found him guilty of using Bitcoin to buy drugs and providing assistance to people who wanted to buy them. In addition, the court ruled that the 80 BTC (currently more than $600,000) that Costanzo gave to the agents should be forfeited.

A March Justice Department report found that Bitcoin is often used for illegal purposes because anyone can buy it on a commercial exchange for about a 1.5% fee. By comparison, Costanzo charged between 7% and 10% for his services.

The use of cryptocurrencies for illegal purposes has enormous potential, as critics of digital assets never tire of pointing out. Many people call Bitcoin a means of crime.  True, statistics are never provided - what percentage of cash dollars do cryptocurrencies have in the process of trafficking drugs and weapons.

According to justice.gov