Why it matters: A 61-year-old from Ohio pled guilty this week to money laundering charges stemming from his participation in moving narcotics on the dark web. He claimed he earned the Bitcoins from mining and trading but police didn't buy it.

Authorities in July announced the arrest of Hugh Brian Haney and charged him with money laundering. The complaint alleges that Haney was a high-ranking member of Pharmville, a prominent vendor on the dark web marketplace Silk Road. He allegedly generated more than $19 million in proceeds from selling illegal drugs online.

The FBI in late 2013 seized the online black market and arrested its operator, Ross Ulbricht, who was later sentenced to a double life sentence plus 40 years without the possibility of parole. Ulbricht has appealed the decision twice over but was unsuccessful both times.

Haney told the currency exchange that he had legitimately earned the Bitcoins through mining and trading.

Investigators used blockchain analytics to uncover and seize Haney’s haul and bring him to justice.

Haney, who has been in custody since July, pled guilty to one count of concealment money laundering and one count of engaging in a financial transaction in criminally derived property. The charges carry a maximum sentence of 20 years and 10 years in prison, respectively.

Haney is scheduled to be sentenced by US District Judge Jed S. Rakoff on February 12, 2020.

Masthead credit: Bitcoin by SeeSaw GmbH