Seized $290K crypto moved from jailed exchange owner

About $290,000 in cryptocurrency that a court forfeited to the United States was transferred in January 2024 from wallets tied to jailed Bulgarian exchange owner Rossen Iossifov to unknown addresses before federal agents secured the wallets’ private keys, the Justice Department wrote in filings dated July 9.

Prosecutors allege Iossifov, owner of Bulgaria-based exchange RG Coins, conspired to move the funds after a court ordered them forfeited. The new indictment charges removal of property to prevent seizure and conspiracy to commit money laundering. The counts carry a combined maximum sentence of 25 years if he is convicted.

Court records show Iossifov was sentenced in January 2021 to 121 months in prison; that term was reduced to 111 months in May 2024. He was ordered to pay about $2.64 million in restitution to victims of an earlier fraud scheme that prosecutors say involved Romanian scammers posting fake listings, taking payments from at least 900 Americans and converting the proceeds to cryptocurrency.

DOJ filings state the assets were routed in January 2024 through multiple exchanges and illicit mixing services, which prevented the United States from obtaining possession. “The defendant routed the cryptocurrency through multiple exchanges and illicit mixing services, preventing the United States from obtaining possession,” prosecutors wrote.

The filings do not identify where the cryptocurrency was held, which platforms or services were used to move it, who controlled the private keys at the time of transfer, or how Iossifov allegedly coordinated the transfers from prison. The specific point at which the government lost the ability to take control of the assets is not stated in the court papers.

The Justice Department’s Asset Forfeiture Policy Manual calls for seizing agencies to transfer seized cryptocurrency immediately into an agency-controlled, unhosted wallet, store it in cold storage, and then hand custody to the U.S. Marshals Service or its contractor. A forfeiture order grants legal title to the United States, but exclusive control over cryptocurrency requires that usable private keys or account credentials be out of reach of others.

The indictment was filed to address the alleged removal of property to prevent seizure and related laundering counts. Court proceedings and investigative filings in the case remain pending, and prosecutors have not publicly identified additional individuals or services linked to the January 2024 transfers.