Florida Man faces trial for cryptomixing

10/06/2022Cybercrime, Darknet News, USA

Ethan Thomas Trainor admitted using “sophisticated online techniques” aka “cryptomixing” to conceal more than $1 million in cryptocurrency from the IRS.

Trainor used sophisticated on-line techniques to conceal from the IRS over $1 million in cryptocurrency he earned through illegal dark web transactions.

Trainor acknowledged using bitcoin to acquire and sell compromised internet account logins (usernames and passwords) during a hearing in Ft. Lauderdale before U.S. District Judge Rodney Smith. The compromised logins were linked to ride-share service accounts, pornographic websites, educational websites, paid streaming services for music and movies, and other online services.

Cryptocurrency traders are obligated to disclose their virtual revenue to the IRS and pay federal taxes on it. Trainor attempted to evade taxes on almost $1 million in bitcoin earnings made through dark web transactions from 2014 to 2017 by employing services and strategies intended to hide the fact that the money was his. For instance, Trainor used online services called “mixers” to conduct his cryptocurrency transactions. These services pool and mix the cryptocurrency transactions of several users before distributing “clean” cryptocurrency to the consumers’ virtual wallets. Identification of cryptocurrency traders is made more difficult by the mixing.

In December, Trainor is due to get a sentence. Federal prison time may be up to five years for him.