DOJ indicts California man linked to BTC money laundering for dark web drug trafficking ring

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The United States Justice Department (DOJ) has indicted a Californian man linked in the alleged laundering of over $5 million through BTC for a dark web drug trafficking ring.

John Khuu was indicted by a federal grand jury in the Eastern District of Texas, charged with conspiracy to commit money laundering. He was recently arraigned in federal court by U.S. Magistrate Judge John D. Love.

According to the indictment, which U.S. Attorney Brit Featherston announced, Khuu conspired with others to launder the proceeds of his drug trafficking ring. He allegedly distributed counterfeit pills and other controlled substances on an unnamed dark web marketplace, targeting U.S. clients.

Khuu’s customers paid him in BTC, and together with his colleagues, he’d trade the BTC for U.S. dollars and launder it through hundreds of transactions to obfuscate the money’s blockchain path, authorities said. Over the time he operated the dark web ring, Khuu allegedly laundered over $5.3 million.

It all came crashing down in May when the Eastern District of Texas indicted him with conspiracy to commit money laundering. In August, the Northern District of California returned an indictment charging him with unlawful importation of controlled substances. He was arrested shortly after in Garden Grove, California.

If convicted, Khuu faces up to 20 years behind bars.

Khuu is one of many who have found out the hard way that digital assets aren’t a crime haven. For the longest time, Bitcoin was sold as a private network facilitating anonymous transactions. This led to the quick adoption of BTC in the dark web in its early days. It didn’t help that top BTC thought leaders continued to align themselves with the anti-establishment movement.

However, in the recent past, the world has woken up to the reality that blockchain technology is even worse for criminals than conventional financial platforms. With the transactions being immutable and the network public, it has become easy for authorities to pursue criminals who turned to BTC to conceal their activities.

The advancement of blockchain analytics with companies like Elliptic and Chainalysis has further exposed these criminals, and dozens are behind bars already.

Dr. Craig Wright has, on several occasions, hammered home that he didn’t create Bitcoin to be anonymous. What some confuse for anonymity is, in fact, privacy. 

Watch: The BSV Global Blockchain Convention panel, Law & Order: Regulatory Compliance for Blockchain & Digital Assets