DOJ Hits Crypto-Friendly Money Company Payza with Laundering Accusations

The money transfer provider Payza has been sued by the US Department of Justice for allegedly committing acts of money laundering totaling around $250 million. The lawsuit hit the cryptocurrency-friendly payment portal Payza with allegations of conducting illicit activities such as pyramid schemes, Ponzi schemes, and even child pornography.

A court document was filed almost two years ago on November 3, 2016; nonetheless, it was not until this week that it was finally released.

The lawsuit targets the co-founders of the service, Canadian brothers Ferhan and Firoz Patel, both of whom are now facing charges for operating a money transfer business without having the necessary license.

It is believed that the illicit activities began in 2012, when the Canadian brothers laundered $250 million with the cooperation of a wide spectrum of criminal companies.

Consequently, Ferhan Patel has been under arrest in Detroit since March 18, but his brother remains free.

Jessie K. Liu, United States Attorney for the District of Columbia, stated:

The arrest and indictments, in this case, demonstrate that we will vigorously enforce laws meant to protect the American consumer. Money transmitting businesses are required to be registered federally and licensed in most states and jurisdictions, including the District of Columbia. Consumers should beware of those that do not follow these laws because they could be acting as a cover for other illegal activity.

The indictment doesn’t specify if any of these illicit activities involved the cryptocurrency markets. They very well may have, since Payza’s platform has been serving as a cryptocurrency trading service for at least three years now.

Moreover, the platform recently communicated its intention to expand its cryptocurrency trading service by adding altcoins. As a matter of fact, just one day after Ferhan Patel’s arrest, the money transfer service company announced to the press that Dash payments could soon be accepted.

The DOJ decided to seize the website domain to prohibit the company from offering services while the lawsuit remained active. Even so, Payza found a way to circumvent that action by providing its users an .eu domain through which the company’s services could be accessed.

Subsequently, the company acknowledged on its Twitter account the legal process it’s going through, but guaranteed users that all their funds and transactions were safe and encouraged them to continue using the service via the new domain.

The company stated:

As some of you may be aware of already, Payza is currently dealing with some legal matters in the United States. We cannot give any specific details at this time, but please be aware that this is an accusation and it is NOT evidence of guilt.

Payza stated that it is actively working on a resolution to the accusations and that users should not worry about the ongoing legal action.