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The First of a Kind: Man Pleads Guilty to Drug and to Money Laundering Charges for Running Unlicensed Bitcoin Exchange and ATM

Posted by Fay Arfa | Aug 23, 2019 | 0 Comments

             Kunal Kalra, 25, aka “Kumar,” “shecklemayne” and “coinman” Kalra agreed to plead guilty to four felonies: distribution of methamphetamine, operating an unlicensed money transmitting business, laundering of monetary instruments, and failure to maintain an effective anti-money laundering program.

            From May 2015 through October 2017, Kalra operated a virtual currency exchange business where he exchanged U.S. dollars for Bitcoin and vice versa. Kalra charged commissions for exchanging dollars for Bitcoin, and he only dealt with customers willing to exchange at least $5,000 per transaction. Kalra exchanged Bitcoin for cash from criminals, including those who received Bitcoin from selling narcotics on the Darknet.

            Kalra set up bank accounts in the names of others, including fake businesses, which allowed him to conceal his illicit business activities. Kalra operated an ATM kiosk where his customers could exchange Bitcoin for cash and vice versa. Kalra profited from every ATM transaction. Customers who wanted to do an exchange using the ATM did not need to provide their identities and Kalra did not install a camera or implement any features requiring customers to identify themselves. 

            Kalra admitted that in 2017 he exchanged approximately $400,000 in cash for Bitcoin for an undercover agent who contacted him online and later met him in person several times in a coffee shop in Los Angeles. The undercover agent told Kalra that his virtual currency were proceeds of drug trafficking, and Kalra continued with various transactions. 

            In June 2017, Kalra sold two pounds of methamphetamine to an undercover law enforcement official in exchange for $6,000. Kalra and the undercover agent later met at a coffee shop to exchange $50,000 in Bitcoin for cash, which the undercover agent told Kalra the money was from selling the methamphetamine that Kalra had sold to the agent. 

            Law enforcement seized nearly $889,000 in cash from Kalra's bank accounts and vehicle, as well as approximately 54.3 Bitcoin and other cryptocurrencies.

Kalra could get life in federal prison.

Kalra also pleaded guilty to federal criminal charges that arose in San Antonio, Texas.  Kalra admitted he conspired to launder money for a drug trafficking network that sold fraudulent prescription tablets, including some laced with methamphetamine and fentanyl.

About the Author

Fay Arfa

Fay Arfa has the distinction of being Certified as a Specialist in two separate areas of law – Criminal Law as well as Appellate Law – by the California State Bar, Board of Specialization. The National Board of Trial Advocacy has also awarded her a board Certification in Criminal Trial Advocacy. ...


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