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Unlicensed Crypto Transfer Platform Users Could Risk Financial Loss, the FBI Warns


April 26, 2024

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Unlicensed Crypto Transfer Platform Users Could Risk Financial Loss, the FBI Warns

The FBI warns that users of unlicensed cryptocurrency transfer platforms may face significant losses if law enforcement seizes or takes them down.

Unregistered crypto transfer services, especially those that don’t comply with anti-money-laundering requirements mandated by US federal laws, could be taken down by authorities at any time, and associated funds may be seized during the operation.

Using Shady Crypto Platforms Could Spell Disaster

“The FBI has recently conducted law enforcement operations against cryptocurrency services which were not licensed in accordance with federal law,” reads the FBI’s announcement. “People who use unlicensed cryptocurrency money transmitting services may encounter financial disruptions during law enforcement actions, especially if their cryptocurrency is intermingled with funds obtained through illegal means.”

Unlicensed crypto platforms are often a cesspool of criminal activity, considering that criminals often rely on their promise of anonymity to cover their traces.

Criminals Often Resort to Unlicensed Crypto Services

Their frequent association with the criminal underground paints a target on their back, and police often crack down on them.

“Using a service that does not comply with its legal obligations may put you at risk of losing access to funds after law enforcement operations target those businesses,” the announcement reads.

Keeping Your Crypto Assets Safe

The FBI posted a list of recommendations for crypto enthusiasts to protect their funds while performing transactions on online platforms, including:

  • Checking if the crypto platform is registered as a Money Services Business (MSB) with the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN)
  • Avoiding services that don’t engage in KYC (know your customer) operations before letting you perform transactions
  • Dodging services that advertise themselves for illegal purposes
  • Understanding that even if an app can be found in an app store, it does not guarantee its legality and compliance with federal requirements
  • Being cautious when using crypto platforms known to be used by threat actors for money laundering

The Announcement Follows the Recent Takedown of a Crypto Mixer

The FBI’s announcement comes on the heels of a recent law enforcement operation that led to the arrest of two suspects accused of laundering substantial amounts of crypto funds.

Keonne Rodriguez and William Lonergan Hill, founders of the Samourai cryptomixer service, were charged for allegedly laundering over $100 million.




Vlad's love for technology and writing created rich soil for his interest in cybersecurity to sprout into a full-on passion. Before becoming a Security Analyst, he covered tech and security topics.

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