A Massachusetts man who operated what authorities described as a “no questions asked” Bitcoin laundering service has been sentenced to six years in federal prison. The sentencing follows a years-long investigation that revealed his role in converting over $1 million in cash into Bitcoin while evading financial regulations.

On May 22, the U.S. Attorney’s Office for the District of Massachusetts confirmed that Trung Nguyen, a resident of Danvers, received a six-year prison term and an additional three years of supervised release. He was also ordered to forfeit $1.5 million in connection with the unlicensed money-transmitting business he operated under the name “National Vending.”

Disguised as a Vending Business

Nguyen’s scheme ran between September 2017 and October 2020. Prosecutors detailed how he disguised his cash-to-Bitcoin service as a vending machine business, allegedly learning the tactics from an online course that taught users how to avoid detection by banks and federal regulators. To obscure the true nature of the business, Nguyen fabricated a list of fictional suppliers, avoided any mention of “Bitcoin” in documentation, and opened accounts that portrayed his business as vending-related.

His actual operation, however, involved meeting clients face-to-face and accepting large amounts of cash—sometimes over $10,000 per transaction—without ever reporting the activity as required by law. Authorities noted that Nguyen deliberately avoided registration with the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN), which is mandatory for money transmitters under anti-money laundering (AML) laws.

Clientele Included Scammers and Drug Dealers

According to the Department of Justice, Nguyen’s customers included individuals involved in various criminal schemes. Some were fraud victims coerced into sending money overseas via Bitcoin, while others included a drug dealer who made ten cash deposits totaling $250,000 in 2018. By converting the cash into Bitcoin, Nguyen helped facilitate these illicit financial activities, bypassing critical safeguards intended to prevent money laundering.

Nguyen also failed to file Suspicious Activity Reports (SARs) and Currency Transaction Reports (CTRs), which are legal requirements for financial institutions and money services businesses dealing with large cash transactions. His deliberate omissions enabled transactions that may have otherwise triggered law enforcement scrutiny.

Caught in an Undercover Sting

Nguyen’s arrest followed multiple sting operations carried out by undercover law enforcement officers. Prosecutors revealed that Nguyen met with undercover agents in person, accepted cash, and transferred Bitcoin to their digital wallets—taking a commission of just over 5%. These meetings provided authorities with clear evidence of his involvement in unauthorized and unregulated cryptocurrency transactions.

To avoid detection, Nguyen used encrypted messaging apps and broke up cash deposits into smaller sums deposited across different days and banking branches, a tactic commonly referred to as “structuring.” These steps were designed to evade thresholds that would have flagged the deposits for further examination by financial institutions.

In June 2023, Nguyen pleaded not guilty to three federal charges: operating an unlicensed money transmitting business and two counts of money laundering. However, in November 2023, a jury found him guilty on the unlicensed transmission charge and one money laundering count. He was acquitted on the second money laundering charge.

A Wake-Up Call for Regulators

The case highlights the growing challenge law enforcement faces in monitoring and regulating digital asset transactions, particularly when individuals use cryptocurrencies to skirt AML laws. While the volume of cryptocurrency used in money laundering remains low compared to cash, the anonymity and decentralization of digital assets continue to pose significant regulatory hurdles.

The conviction also reflects broader efforts by U.S. authorities to crack down on illegal crypto activities and enforce existing financial laws within the digital economy. It sends a clear message that crypto transactions, even when conducted privately, are subject to the same federal oversight and regulations as traditional financial services.

Legal and Financial Consequences

In addition to the six-year prison term, Nguyen’s financial penalty of $1.5 million in forfeiture demonstrates the government’s commitment to recovering illicit profits made through unregulated cryptocurrency services. The forfeited amount represents the scale of profits Nguyen is believed to have made during the three-year operation.

The three years of supervised release following his prison term are also designed to monitor Nguyen’s financial activities and prevent recidivism.

Final Thoughts

Trung Nguyen’s conviction underscores the legal risks of engaging in unregulated cryptocurrency services, even under the guise of legitimate business operations. It also serves as a reminder that federal authorities are increasingly scrutinizing cash-to-crypto transactions, especially those that bypass anti-money laundering compliance.

As the crypto market matures and more institutional capital flows into the space, regulatory clarity and enforcement will likely become even more central to the digital asset landscape. This case could mark the beginning of more aggressive actions against unlicensed crypto operators across the United States.