An Arizona district court found the indictment against the founders of the classifieds site Backpage for aiding child trafficking for sexual exploitation to be improper, as Decrypt reports.
The proceedings in the case began back in 2018. Then-Backpage CEO Carl Ferrer pleaded guilty to conspiracy to facilitate prostitution and money laundering.
The authorities confiscated the domain, and prosecutors charged site founders Michael Lacey and James Larkin and five others with charges of receiving more than $500 million in proceeds linked to prostitution.
According to authorities, after credit-card issuers ceased processing the site due to its alleged illicit activity, Backpage laundered funds by accepting checks and money transfers under fictitious names. They wired assets to accounts in foreign banks and swapped fiat for cryptocurrency through Coinbase and Kraken.
Authorities also allege that the site founders used the services of the Panama-based processor Crypto Capital, the founder of which in 2019 was accused of shadow banking.
The prosecution focused on the claim that the site allegedly facilitated child trafficking for sexual exploitation. However, Judge Susan Brnovich, after reviewing the victims’ testimonies, found no corroboration. She deemed the indictment’s wording an overreach by the government.
Now the founders face charges of facilitating prostitution in several states and money laundering with Bitcoin.
ForkLog previously reported that an American received 11 years in prison for legitimising funds through cryptocurrency exchanges for North Korea.
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