Federal Prisoner Charged Over Alleged Laundering Of Seized Crypto From Kraken Account

US prosecutors have charged Rossen Iossifov, a Bulgarian national already serving a federal prison sentence, with laundering about $290,000 in crypto that had been ordered forfeited by a court. The Department of Justice said Iossifov conspired in January 2024 to withdraw and move the assets from a Kraken account that was under a forfeiture order tied to his earlier conviction.

How The Alleged Scheme Worked

Prosecutors allege the funds were routed through illicit mixing services and crypto exchanges in an attempt to move them before the government could take possession. The account was registered to Iossifov at Kraken and had been restrained during the investigation. The Justice Department has not disclosed how the account was accessed or whether the funds were ultimately recovered.

A History Of Crypto Crime

Iossifov was previously convicted of racketeering and money laundering conspiracy for running RG Coins, a crypto exchange used to convert proceeds from an online auction fraud scheme that targeted at least 900 Americans. He was ordered to pay more than $2.6 million in restitution and forfeit crypto assets tied to the case. He now faces new charges including removing property to prevent seizure and conspiracy to commit money laundering, carrying a maximum penalty of 25 years if convicted.

Broader Crackdown On Illicit Crypto Flows

The case comes as authorities step up scrutiny of crypto used to hide criminal proceeds. Interpol recently reported that a wallet linked to a suspected romance scam operation processed more than $122 million over ten months using cross-chain swaps. That investigation spanned 97 countries and led to nearly 5,800 arrests along with the seizure of $293 million in assets.