Not too long ago, the Backpage.com platform was seized by the US government. This particular development also had some repercussions for cryptocurrencies, as the site’s CEO was charged with laundering money using Bitcoin and other cryptocurrencies. It now seems he has pled guilty to these charges and intends to flip on other website officials.
Backpage Money Laundering and Cryptocurrency
The entire story involving Backpage.com and its officials has been quite interesting to keep an eye on. Not only did the platform legitimize prostitution and even child abuse, but it also seems a lot of money laundering has taken place over the years. Although the latter claims seemed rather outlandish at first, there may have been some truth to those allegations after all.
To be more specific, there were allegations that Backpage.com CEO Carl Ferrer was involved in laundering money generated through this platform using various cryptocurrencies. Ferrer has since pleaded guilty to these charges in state courts in California and Texas, as well as in a federal court in Arizona. He will also testify against the people who co-founded Backpage.com. The latter development is not entirely surprising at this stage, although it is evident there is a lot more to this investigation than meets the eye.
It seems Ferrer is ready to come clean regarding his role with Backpage.com. He’s even admitted to have conspired with other principals to find ways to “knowingly facilitate the state-law prostitution crimes committed by the site’s customers”. That in itself clearly confirms malicious intent on behalf of the CEO and his conspirators, although no one will bat an eye at these developments either.
The money laundering charges will be of the most interest to people involved in cryptocurrency. Considering that there are so many allegations regarding the use of Bitcoin and similar currencies in reference to laundering money, this recent development helps validate such claims. It is still an isolated incident at this stage, but it is evident that people still consider Bitcoin “anonymous enough” to hide their wrongdoings.
Although further specifics regarding these money laundering efforts remain unclear, this new development is not the outcome cryptocurrency enthusiasts were looking for. It brings even more negative attention to this industry, even though the “bad elements” will have to be weeded out sooner or later. Ending the connection between cryptocurrencies and crime will be an uphill battle, though.
It remains unclear what will happen to the undisclosed amount of cryptocurrency currently under the control of the US government. If previous similar arrests are any indication, the seized bitcoins will be auctioned off at some point in the future. For now, we’ll have to wait and see how that situation evolves, as there are still a lot of unknown factors.