Bitcoin Exchange Operator from Bulgaria Faces Extradition to the US – Novinite.com

RGCoins, a small-scale Bitcoin exchange service based in Bulgaria, is under an investigation. The exchange’s founder, Rossen Yossifov, is facing extradition to the US and a trial, as the firm was seen to be instrumental in helping a money-laundering group, reported Bulgarian media.

Currently, RGCoins states that its activity has been suspended indefinitely, as of January 25. It was one of the numerous small-scale exchange services that required no screening and were anonymous. Yossifov’s family claimed he had no knowledge of the criminal group and their money-laundering activities. The demand for extradition caused repercussions among Bulgarian social media, commenting on the capabilities of the US judicial system to apprehend foreign nationals. The forceful arrest, search and seizure of computers and assets were outlined in a statement posted on the RGCoin news page, reports Cryptovest. 

Yossifov has not faced extradition yet, although the latest verdict has allowed the procedure to move to the next step.

The case of RGCoins was related to the earlier arrest of Vlad Nistor, the founder and executive of the Romanian-based exchange service CoinFlux. Nistor was connected to the same group of 14 named Romanian nationals, who allegedly also used RGCoins to launder funds.

According to the Kentucky court indiction, Nistor was helping a group of 14 cybercriminals, performing phishing attacks in the US between 2014 and 2015. Later, the group also used Bitcoin to launder funds. Nistor also faced extradition to the US in December.

The accusations against Yossifov are based on the fact that one of the Romanians related to Nistor also used RGCoins to launder some of the illegally acquired funds. According to Bulgarian media, Yossifov may face up to 20 years in prison for financial crimes and money laundering. However, the firm denies knowing explicitly the aim of the transaction by the Romanian client, stating that an order of Bitcoin was exchanged just like for multiple regional or international clients. RGCoins has a limitation of 5 BTC for anonymous orders, and anything above that amount is exchanged through an additional email appointment.

The issue puts a big question mark on centralized exchange services. There are multiple exchanges that have worked without a customer screening process in the early years of Bitcoin and digital currencies, and it is difficult to estimate which small-scale exchanges were used for money laundering. So far, the US has not targeted foreign nationals for Bitcoin-related financial crimes.

Owning and moving Bitcoin (BTC) is still completely anonymous, borderless and no one’s funds can be seized without access to private keys. However, exchanges are capable of monitoring users and freezing funds, and may also cooperate with law enforcement. But the outreach of US authorities also shows that Bitcoin usage is still seen as potentially criminal.

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