$7 000 000 USD
DESCRIPTION OF EVENTS
"In 2015, 53-year-old Bulgarian national Rossen Yosifov launched RG coins, a Bulgarian cryptocurrency exchange with a focus on Eastern-European markets. At the time, the original idea was to integrate new technology in Bulgaria and to create a community of people who exchange ideas and help promote the new asset class." "The exchange was considerably small compared to the major ones of the market."
"As Bulgaria has not regulated cryptos, RGCoins was a fully legal company in the country up until it was shut down after the arrest." "The site rgcoins.com is owned by RG Coin EOOD with UIC 203519397, registered by the Registry Agency with number 20150527100227, address: Sofia, 53 Todor Kableshkov Str., MALL: Rosen Yosifov. RG Coin Ltd. is registered as a personal data administrator. rgcoins.com uses an SSL security certificate issued by RapidSSL." "Bulgarian authorities are not known for being very friendly with crypto companies, though."
"The minimum amount that [could] be traded by bank transfer [was] 0.1 BTC. Smaller amounts [we]re paid in cash at the company's office. The minimum quantities for trading DRK and PPC [we]re 1.00." "As of April 1, 2015, RG Coins stop[ped] trading with DASH and PPC." "Transactions for quantities over 5 BTC [we]re executed only after prior agreement with the office. For transactions (when selling) with a method of payment "cash" a fee of 1% [wa]s charged."
"Iossifov’s exchange was in Sofia, Bulgaria, and was favorable to at least five members of the Alexandria Online Auction Fraud network who would receive positive exchange rates for clients in the criminal ring. The exchange also did not require any ID or proof of source for the funds, leaving no evidence or ties to the fraudulent money." "Iossifov laundered about $5 million in cryptocurrency over three years for several of the cybercriminals, who were part of the crime group Alexandria (Romania) Online Auction Fraud (AOAF) Network, the release stated. He received over $184,000 in payment."
"[T]he Romanian citizens defrauded US citizens with fake ads and the Americans complained, which took the case to the authorities of the US. The people who participated in the audience were never able to get any of the products, it seems, so buyers believe that they were robbed." "Iossifov and his co-conspirators ran advertisements online, targeting U.S. consumers, for nonexistent, high-end goods, such as cars, according to the release." "The DOJ says the gang posed as military looking to sell their cars on Craigslist and eBay before deployment. They made their profiles look legitimate by stealing images and names from real people in order to convince buyers to pay them first before delivery, and their profiles looked convincing enough to scam at least 900 Americans." "After receiving payments, the conspirators would convert them to cryptocurrency and send that to money launderers abroad, like Iossifov." "More than $7 million in total was defrauded from U.S. victims via the scheme."
"Yosifov was arrested on the morning of December 11. The police searched the premises and confiscated computers, cash and mobile devices at the time, but the family of the man complained that the cops did not have a search warrant when they arrested him." "RG coins cryptocurrency exchange announced its closing Immediately after the news of his extradition broke," "Dear clients, The company ceases to operate indefinitely. Read more information here. Petition to stop the extradition of Rosen Yosifov."
"Rossen Iossifov was found guilty of money laundering and conspiracy to commit racketeering." “According to the evidence at trial, Iossifov knowingly and intentionally engaged in business practices designed to both assist fraudsters in laundering the proceeds of their fraud and to shield himself from criminal liability.” "Iossifov was also said to have allowed the scammers to avoid identification protocols, and failed on a number of basic anti-money laundering requirements."
"On January 12, the owner of RG Coins was sentenced by a federal jury in Kentucky to ten years’ imprisonment." "The investigation was conducted by the U.S. Secret Service, Kentucky State Police, Lexington Police Department, IRS Criminal Investigation and U.S. Postal Inspection Service, and supported by the Justice Department’s Organized Crime Drug Enforcement Task Force (OCDETF) and the International Organized Crime Intelligence and Operations Center (IOC-2)." "Assistance was provided by the Romanian National Police (Service for Combating Cybercrime), the Romanian Directorate for Investigating Organized Crime and Terrorism (Agency for Prosecuting Organized Crime), and the Supreme Prosecutor’s Office of Cassation of the Republic of Bulgaria. The Justice Department’s Office of International Affairs and Money Laundering and Asset Recovery Section of the Criminal Division provided significant support."
"[T]he U.S. Department of Justice (DOJ) sentenced the owner of Bulgarian crypto exchange RG Coins to 121 months in prison for money laundering." "U.S. District Court Judge Robert Weir sentenced Rossen Iossifov to a 10-year sentence, 85% of which must be served behind bars under U.S. federal law." "17 of the 20 principal actors in the scheme have been arrested, charged, and found guilty to date." "Seven [of the] others [that] have been sentenced includ[e] Livui-Sorin Nedelcu to 82 months in prison, Marius Dorin Cernat to 50 months in prison, Stefan Alexandru Paiusi to 31 months in prison, Eugen Alin Badea to 40 months in prison, Florin Arvat to 30 months in prison, Alin Ionut Dobric to 37 months in prison, and Austin Edward Nedved to 96 months in prison. Three members are said to be fugitives."
Bulgaria has no plan for crypto-asset trading platforms, and this left the market wide open. Rossen Yosifov launched RG Coins, making a large portion of his profit from participation in a scheme to defraud Americans. This scheme encouraged Americans to pay upfront for vehicles and other valuables from people they'd never even met in person or had any past dealings with. It doesn't appear that the platform custodied any funds for clients, so the amount lost is that of the defrauded Americans.
HOW COULD THIS HAVE BEEN PREVENTED?
When no regulation is applied at all, firms can freely support criminal activity, and no official registry of platforms means that the investing public cannot tell the difference.
Cryptocurrency Crime and Anti-Money Laundering Report, May 2021 - CipherTrace (May 23)
Owner of Crypto Exchange RG Coins Gets 10 Years in Prison for Laundering $5M - CoinDesk (Jun 30)
RG Coins cryptocurrency exchange owner lands 10 years behind bars for money laundering | ZDNet (Jun 30)
RG Coins Owner Arrested Money Laundering (Jun 30)
Bitstamp Compliance Privacy AML Cybersecurity Authentication (Jun 30)
Owner of Crypto Exchange RG Coins Gets 10 Years in Prison for Laundering $5M (Jun 30)
DOJ: Cryptocurrency Exchange Owner Sentenced to Prison for Money Laundering (Jun 30)
RG Coins Cryptocurrency Exchange Owner Lands 10 Years Behind Bars For Money Laundering (Jun 30)
Начало - RgCoins (Jun 30)
Начало - RgCoins (Jun 30)
Начало - RgCoins (Jun 30)
Founder And CEO Of Bitcoin Exchange Startup RG Coins Found Guilty Of Crypto Ponzi Scheme, Money Laundering, And Millions Of Dollars In International Cyber Fraud Scheme To Defraud Americans | Tech News | Startups News - WorldNewsEra (Jun 30)
Bulgaria’s RGCoins Crypto Exchange Owner Gets Extracted to the US for ‘Organized Crime’ (Jun 30)