Homeland Security Agents Lure LocalBitcoin Trader Into Arrest for Money Laundering

Mar 13, 2020 at 10:12 // News
Coin Idol
Homeland Security arrests man for money laundering

Washington DC resident Kenneth Warren Rhule is facing charges of money laundering for trading more than $140,000 on Local Bitcoin. The 26-year-old got into Homeland security agents’ radar and was tricked to exchange his cryptocurrency into cash in the hands of undercover Homeland security agents.

US Citizen Started Unregistered  Business on LocalBitcoin.com 

Gone are the days when Bitcoin was truly a currency of complete freedom and users could transact anonymously. Recently Homeland Security agents targeted and arrested a trader for running his bitcoin exchange business on localBitcoi.com. The trader who go by the name Rhules was decieved by government agents who clearly told him they wanted to buy bitcoin to aid their human trafficking business.

According to HomeLand security Rhule settled up eight transactions with undercover agents posing as human traffickers. The eight deals are said to be worth about $140,000 in cash the undercover agents paid to him. HomeLand security additionally charged the Localbitcoin trader of conspiring to produce and distribute Narcotics.

These HomeLand security undercover agents asked the traders numerous questions regarding the cryptocurrency Monero, an untraceable coin. According to the defendant, the agents asked him for tips and tricks to avoid their transaction from being tracked by government agents for which he said he gladly offered an explanation thinking they were legitimate clients. DHS further said Rhule offered to convert the purchased Bitcoin into Monero for the agents for complete anonymity.

Shady Undercover Operations on Young Entrepreneur

During the court session today March 12 the undercover agents declared that Rhule never asked them any KYC questions as per the stipulated regulations. The agents also expressed surprise that the defendant continued with the transaction even after they had informed him that the coin were meant for Human trafficking deals.

Rhule came as the second LocalBitcoin user being charged for offering an unlicensed money transmission business. Recently LocalBitcoin changed their terms and conditions several times forcing out many traders from the platform. The P2P exchange also no longer offers cash for cryptocurrency trading option due to regulatory Hiccups.

Recently CoinIdol.com, a world blockchain news outlet, shared an article explaining the hardship LocalBitcoin traders face. In February 2020, EU Commission thrust a verification procedure upon traders making it difficult for them to withdraw their funds. 

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