U.S. prosecutors charge prisoner over alleged crypto laundering from seized Kraken account

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Prosecutors charge over crypto laundering

Highlights

U.S. prosecutors charged Rossen Iossifov with conspiring to launder about $290,000 in cryptocurrency withdrawn from his restrained Kraken account in January 2024 after a court forfeiture order.
Iossifov, previously convicted for online auction fraud and laundering nearly $5 million via exchange RG Coins, faces additional charges that could result in up to 25 years in prison.
Authorities are increasing global enforcement against crypto-related money laundering, with Interpol reporting $122 million laundered via cross-chain swaps and $293 million in fraud-linked assets intercepted across 97 countries.

Forfeiture case and alleged account transfers

As reported by Cointelegraph, citing the U.S. Department of Justice, prosecutors have charged Bulgarian national Rossen Iossifov with conspiring to remove and launder cryptocurrency that a federal court had ordered forfeited after his 2021 conviction.

The Department of Justice said on Thursday that the assets, worth about $290,000, were held in a Kraken account registered to Iossifov and had been restrained during the investigation. Prosecutors allege the cryptocurrency was withdrawn and transferred in January 2024, then routed through mixing services and crypto exchanges before U.S. authorities could take possession.

The DOJ announcement does not say how the account was accessed or whether the funds were recovered. Iossifov now faces charges of removing property to prevent seizure, aiding and abetting, and conspiracy to commit money laundering, with a maximum penalty of 25 years if convicted.

An indictment is an allegation, and Iossifov is presumed innocent unless proven guilty.

Broader pressure on crypto laundering networks

Iossifov was previously convicted of racketeering conspiracy and money laundering conspiracy for his role in an online auction fraud network that prosecutors said victimized at least 900 Americans. Authorities have said he owned and operated crypto exchange RG Coins, which converted criminal proceeds into cryptocurrency and cash for the network, and earlier evidence showed he laundered nearly $5 million in crypto in less than three years.

The court had also ordered him to pay more than $2.6 million in restitution and to forfeit crypto assets. The latest charges indicate that efforts to move digital assets after a forfeiture order can generate additional criminal exposure even after an underlying conviction.

The case comes as authorities intensify scrutiny of crypto infrastructure used to obscure illicit flows. Interpol said on Thursday that a wallet tied to a suspected romance-scam money launderer processed more than $122 million in 10 months using cross-chain swaps, as part of an operation across 97 countries and territories that led to 5,811 arrests and the interception of $293 million in assets linked to fraud and money laundering.

In our earlier article on HSBC joining Swift’s blockchain-ledger pilot for cross-border payments, we noted the bank’s push toward 24/7 settlement infrastructure and greater efficiency in global fund management. We also highlighted that the move aligned with a broader trend of traditional financial institutions adopting blockchain rails while investors tracked HSBA’s technical setup and potential breakout levels.

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