Crypto Crime Doesn’t Pay: US Operator Gets 6 Years, Loses $1.5M in Bitcoin Bust

Another day, another crypto cautionary tale—this time with a side of handcuffs and asset forfeiture. A US man just learned the hard way that mixing Bitcoin with illicit activity tends to end badly. The feds don’t care how decentralized your operation is when they come knocking.

The sentence? Six years behind bars. The cost? A cool $1.5 million surrendered to authorities—because crime might be ‘peer-to-peer,’ but prison is decidedly not.

And here’s the kicker: while regulators love to harp about crypto’s ‘wild west’ reputation, traditional finance still launders more money before breakfast. But sure, focus on the blockchain guys.

Image Source: DoJ

Fake Business Masked $1M Bitcoin Laundering Operation

Prosecutors said Nguyen ran his scheme through a company called National Vending, LLC, which he presented as a vending machine business.

In reality, it served as a front for a bitcoin exchange service that bypassed federal anti-money laundering requirements. Between 2017 and 2020, Nguyen converted over $1m in cash to Bitcoin, including $250,000 for someone who told him they were a meth dealer.

Under federal law, VIRTUAL currency exchangers are classified as money transmitters and must register with the Financial Crimes Enforcement Network, or FinCEN.

They are also required to maintain anti-money laundering programs and file reports on large or suspicious transactions. Nguyen did neither, despite handling multiple six-figure sums for clients involved in criminal activity and scams.

Federal Jury Found Nguyen Knowingly Bypassed Laws Protecting Fraud Victims

The Justice Department revealed that Nguyen processed hundreds of thousands of dollars for romance scam victims. These victims had been tricked into sending Bitcoin to fraudsters overseas. In addition, Nguyen used encrypted messaging to communicate with clients.

He also avoided reporting thresholds by breaking up large deposits. Further, he took a course that advised him to create a cover story and never mention Bitcoin.

Nguyen was indicted in May 2023 and convicted more than a year later after a federal jury found he deliberately flouted laws designed to prevent financial crimes. Authorities said his actions not only helped criminals hide their tracks, but also put vulnerable victims at further risk.

Separately this week, a federal jury in the Eastern District of New York convicted former SafeMoon CEO Braden Karony of conspiracy to commit securities fraud, wire fraud and money laundering.

The 12-day trial began on May 5. Karony now faces up to 45 years in prison and the forfeiture of illicit gains.