Backpage comes under the investigators cloud for using Crypto to Launder Money

Backpage comes under the investigators cloud for using Crypto to Launder Money

Backpage founders have come under the clouds of investigators for using crypto in money laundering activities. This is one of the major concerns expressed by countries for discouraging the digital currency in their country and for tightening the regulations. The site gained popularity for different reasons, and the long arm of the Justice Department has taken a drastic step of seizing the websites last Friday. About seven individuals were also arrested and face charges on 93 counts.

Started Fourteen Years Ago

About fourteen years ago in 2004, was started by a group of coders and entrepreneurs. Their objective was to give a run for the money on Craigslist. Though the site was different, its categories were identical in nature in both the sites. The site was allowed to be used for a number of items. This included selling off unwanted items, work opportunities, and finding of employees. However, the biggest attraction of the site was the sex. That has precisely drawn into the legal issues now.

The DOJ has charged seven individuals with a number of things. This included facilitating child pornography, conspiracy to facilitate prostitution and money laundering. While announcing the seizure and arrests, Attorney General, Jeff Sessions, indicated, “For far too long, existed as the dominant marketplace for illicit commercial sex, a place where sex traffickers frequently advertised children and adults alike. But this illegality stops right now.”

Coingeek reported that Backpage was charged with earning approximately $500 million from illicit activities. This included prostitution and ads since its introduction in 2004. Both the credit card firms like Visa and MasterCard have come to know about the nature of the company’s working and stopped themselves from offering authorization for payments to the site. This has driven the company to start a variety of money-laundering activities. Their objective was to convert customer funds.

This kind of activities could only get a bad name for the crypto community and strengthen the pessimists’ arguments in terming the virtual currencies as nothing but betting. A lot of financial experts were not convinced about the potentials of the digital currencies and believed that the cryptocurrencies market could go in the way tech firms of 1998 – 2000. Countries like South Korea have come out with fresh regulations focusing on curbing money laundering through virtual currencies.

Financial Crimes Committed

Internal Revenue Service’s (IRS) Criminal Investigation unit’s Don Fort, thinks that the people responsible for Backpage has “committed egregious amounts of financial crimes.” This included money laundering and did so at the cost of genuine children and women. In any case, the latest action had only brought a bad name to backpage.

However, the latest is not the only incident to have happened in its history. For instance, the company found itself in the thick of attack when its CEO was arrested in 2016. Following this, the site was also shut down, albeit temporarily. However, the charges were dropped following a court opinion that the site was under First Amendment protection in respect of speech. It remains to be seen whether the charges would be dropped again in the current instance too.

About Justin Danneman 1222 Articles
Justin has built his career around digital marketing, online gaming and finance. He currently oversees all the content published on Bitcoin Chaser, in particular the news and analysis. To know more about Justin, follow him on Facebook.