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US Officials Charge California Resident With Using Bitcoin to Launder $5.3M in Drug Proceeds
Federal officials alleged that John Khuu sold fake drugs for cryptocurrency, making over $5 million in the process.
In this article
U.S. officials charged California resident John Khuu with conspiracy to commit money laundering and the unlawful importation of a controlled substance on Friday, alleging he sold counterfeit drugs for bitcoin.
Khuu was arrested in August 2022, after grand juries in Texas and California returned the indictments in May and August, respectively, a press release said.
STORY CONTINUES BELOW
According to one of the indictments, Khuu allegedly created vendor accounts on different dark web marketplaces to sell the fake pills and other controlled substances beginning in January 2020. Customers "usually" used bitcoin
to purchase these drugs, though the indictment suggested other cryptocurrencies may also have been used.Khuu also allegedly used a network of financial institutions to launder the funds, including Bank of America, Citibank, JPMorgan Chase and Wells Fargo. The indictment alleged he created a number of fake accounts at these banks.
The indictment went on to describe several transactions Khuu allegedly conducted as part of his efforts to convert bitcoin into cash. All told, he allegedly conducted just under 500 transactions tied to the sale of about 620 BTC.
Khuu waived his right to a detention hearing, according to another court filing released on Oct. 6.
Nikhilesh De
Nikhilesh De is CoinDesk's managing editor for global policy and regulation, covering regulators, lawmakers and institutions. He owns < $50 in BTC and < $20 in ETH. He won a Gerald Loeb award in the beat reporting category as part of CoinDesk's blockbuster FTX coverage in 2023, and was named the Association of Cryptocurrency Journalists and Researchers' Journalist of the Year in 2020.
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Crypto Industry Asks President Trump to Stop JPMorgan’s 'Punitive Tax' on Data Access
A coalition of fintech and crypto trade groups is urging the White House to defend open banking and stop JPMorgan from charging fees to access customer data.
What to know:
- Ten major fintech and crypto trade associations have urged President Trump to stop big banks from imposing fees that could hinder innovation and competition.
- JPMorgan's plan to charge for access to consumer banking data may debank millions and threaten the adoption of stablecoins and self-custody wallets.
- The CFPB's open banking rule, which mandates free consumer access to bank data, is under threat as banks have sued to block it, and the CFPB has requested its vacatur.
