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March 12, 2020

Washington Man Faces 8 Counts and 20 Years for Allegedly Running Bitcoin (BTC) Money Laundering Operation

By Daily Hodl Staff

Kenneth Warren Rhule from Bothell, Washington is charged with an eight-count complaint after law enforcement officers allegedly caught him running a Bitcoin money-laundering operation. 

Homeland Security Investigations agents say they discovered Rhule using the alias Gimacut93 and advertising his unlicensed cryptocurrency trading business on the peer-to-peer Bitcoin trading platform LocalBitcoins.

From April of 2018 to November of 2018, law enforcement officers met with the suspect in various Starbucks coffee shops in Western Washington posing as criminals who needed to launder funds from money trafficking activities. 

The 26-year-old allegedly agreed to exchange the agents’ Bitcoin for cash despite the impression that the funds were from illicit activities. He also gave advice on how to hide the source of the funds and disregarded the know-your-customer (KYC) requirements for money transmitters.

According to a release from the U.S. Attorney’s Office for the Western District of Washington, Rhule now faces multiple charges for operating an unlicensed money transmitting business and laundering of money instruments. He also faces a charge for operating an illegal marijuana products business. 

“Operating an unlicensed money transmitting business is punishable by up to five years in prison.  Laundering monetary instruments is punishable by up to 20 years in prison.

Conspiracy to manufacture and distribute the amount of marijuana involved in this case is punishable by a mandatory five years in prison and up to 40 years in prison.”

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