State v. Mr. K (DMC No. 15277) – Federal Felony Money Laundering ($3,100,000 in Bitcoin), and Federal Felony Possession of Dangerous Drugs For Sale – Not Charged – Department of Homeland Security Investigated
Mr. K had purchased 160 Bitcoins in 2013 at an average price of $100 per coin, for a total of $16,000 spent. By 2017, that investment had grown to over $3.1 million dollars. Mr. K was also on Bitcoin forums online, and was engaged in buying and selling of Bitcoin during this time. One day, Investigators from the Department of Homeland Security showed up at his door, and began questioning him about people on the forums, and whether there was any transactions on Silk Road regarding the Drug Trade. They also questioned his roommate. It was at this time Mr. K secured the services of DM Cantor.
It was during this time that the Department of Homeland Security was investigating the founder of Silk Road, and the aftermath of the Arrest and Prosecution of that individual. Various Informants had indicated to the Investigators at Homeland Security that Mr. K had made this money while being involved in the Drug Trade. We immediately asked who these Informants were, and the DHS would not provide the information. In addition, we provided information that his original Bitcoin holdings were all purchased from money from a legal source back in 2013. Given the meteoric rise, Mr. K’s Bitcoin wallet had risen exponentially. Ultimately, the Department of Homeland Security did not have enough information to move forward with any Charges against Mr. K. Had Mr. K been Charged and implicated in the Silk Road Drug Trade, he could have spent the Rest of his Life in Prison. Instead, he is a Free Man with No Record whatsoever.
