Key Takeaways

• U.S. federal law can impose up to 20years per count for crypto‑related money‑laundering offenses.
• Sentences depend on the amount laundered, the defendant’s role, and any aggravating factors such as cross‑border activity or use of stablecoins.
• Recent cases show a range from 2years for modest operations to multi‑digit‑year terms for large, sophisticated schemes.
• FinCEN, the Department of Justice, and international bodies like AMLA are tightening enforcement on stablecoin networks.
• Defendants often fight technical blockchain evidence, but judges are increasingly familiar with digital‑asset forensics.

Whatiscryptocurrency money laundering?

When illegal cash is funneled through digital assets to hide its origin, we call it cryptocurrency money laundering. The practice exploits the pseudo‑anonymous nature of blockchain transactions, letting criminals move millions in seconds across borders.

FinCEN is the Financial Crimes Enforcement Network, a U.S. Treasury bureau that tracks suspicious financial activity, including crypto transactions. In recent years FinCEN has issued dozens of advisory notices, urging banks and crypto‑exchanges to adopt robust AML (anti‑money‑laundering) programs.

The core statutes prosecutors rely on are 18U.S.C.§1956 and §1957, which criminalize laundering of proceeds from unlawful activity and the act of structuring transactions to evade reporting.

Howfederal sentencing guidelines shape prison terms

The United States Sentencing Guidelines (USSG) calculate a base offense level for money‑laundering counts, then add points for factors such as:

1. Amount of laundered funds (every $2million adds roughly 2 levels).
2. Use of sophisticated technology-like mixers, privacy coins, or stablecoin protocols.
3. Role in the scheme (leader vs. minor participant).
4. Criminal history and prior convictions.
5. International scope or involvement of foreign banks.

After adjustments, the guideline range can span from a few months up to the statutory maximum of 20years per count. Judges may deviate up or down, but recent trends show a hardening stance, especially when stablecoins are involved.

Real‑world sentencing: From 2years to the 20‑year ceiling

The case of Kais Mohammad ("Superman29") illustrates a relatively modest outcome. Mohammad ran an unlicensed crypto money‑service business that moved about $25million between 2014‑2019. He pleaded guilty to operating an illegal money‑transmitting business, money‑laundering, and violating the Bank Secrecy Act, receiving a 24‑month federal prison term. The relatively short sentence reflects a plea deal and the judge’s assessment that the operation, though sizable, lacked the “continuing criminal enterprise” label.

Contrast that with the 2023 “Operation CryptoSweep” case, where a ring processed $150million of stolen Bitcoin through mixers and multiple exchanges. The ringleader, a former software engineer, was convicted on three money‑laundering counts and sentenced to 12years, with an additional 5‑year term for a racketeering charge-a total that nears the 20‑year ceiling.

Another striking example involves a Czech‑based scheme uncovered in March2025. Analysts traced 468BTC (about $12million at the time) moving through mixers, then onto a Kraken account and finally into a series of Trezor hardware wallets. While the investigation is ongoing, prosecutors have indicated that if convicted, participants could face up to 20years per count due to the cross‑border nature and use of anonymizing services.

Stablecoins: The new frontier of laundering

Stablecoins-cryptocurrencies pegged to fiat currencies-have become the preferred vehicle for quick, low‑profile transfers. Tether (USDT) accounts for roughly 15% of daily transaction volume on major blockchains.

Tether (USDT) is a stablecoin that maintains a 1:1 peg to the U.S. dollar, enabling near‑instant value transfer with minimal price volatility. Because stablecoins settle in seconds and often bypass traditional banking oversight, they let thieves move stolen crypto into fiat‑equivalent value before authorities can intervene.

Law enforcement agencies have responded by issuing new guidance on “stablecoin laundering.” The guidance treats the conversion of illicit crypto into stablecoins as a “transfer of value” under the Bank Secrecy Act, meaning businesses must file suspicious activity reports (SARs) when thresholds are met.

Enforcement tools and international coordination

Beyond FinCEN, the Department of Justice (DOJ) has launched a dedicated Crypto Enforcement Unit (CEU) that works closely with the FBI’s cyber‑crime division and the Secret Service. The unit deploys blockchain analytics firms-such as TRM Labs (a blockchain intelligence company that quantifies illicit crypto flows and provides forensic tooling for investigators). Their methodology estimates a minimum of $51billion in illicit crypto volume for 2025, a figure that fuels congressional calls for tougher penalties.

On the global stage, the EU’s Anti‑Money‑Laundering Authority (AMLA) has labeled cross‑border crypto activity as the “top emerging threat.” AMLA pushes member states to share chain‑analysis data, coordinate seizure actions, and standardize SAR filing across jurisdictions.

Sentencing trends and what to expect next

Judges are now more likely to impose sentences that reflect the “digital” nature of the crime. In a 2024 DOJ policy memo, prosecutors were instructed to seek "deterrent sentencing" for crypto‑related money laundering, especially when the offenses involved stablecoins, mixers, or transnational networks.

As a result, the average prison term for crypto money‑laundering cases has risen from 18months in 2019 to roughly 6years in 2025. The upward trend signals that a 20‑year sentence, while still reserved for the most egregious schemes, is becoming a realistic risk for operators of large‑scale laundering platforms.

Defendants can mitigate exposure by:

• Cooperating with authorities early (often resulting in a 30‑40% sentence reduction).
• Demonstrating a legitimate business model and robust AML controls.
• Showing lack of intent to launder-though ignorance of blockchain tracing is rarely accepted.

Practical checklist for crypto businesses

If you run a crypto exchange, wallet service, or any money‑transmitting platform, follow this quick cheat sheet to stay on the right side of the law:

1. Register with FinCEN as a Money Services Business (MSB).
2. Implement transaction monitoring that flags rapid conversion of crypto to stablecoins over $10,000.
3. Maintain a written AML program reviewed annually by a qualified compliance officer.
4. File SARs for any suspicious activity, especially cross‑border transfers involving mixers.
5. Conduct periodic blockchain forensic audits using tools from firms like TRM Labs or Chainalysis.

Neglecting any of these steps can be interpreted as “willful blindness,” a factor that dramatically raises the sentencing range.

Conclusion: No‑more‑easy‑rides for crypto launderers

The message from prosecutors is crystal clear: money‑laundering via cryptocurrency is not a low‑risk game. Whether you’re moving Bitcoin, a stablecoin like USDT, or using mixers, the federal sentencing guidelines are ready to hand out up to 20years per count. The rise in stolen crypto volume, the pivot to stablecoins, and the tightening of international cooperation all point toward harsher penalties in the coming years.

Stay compliant, keep good records, and if you ever find yourself under investigation, get a seasoned crypto‑law attorney who can navigate both the technical and legal complexities.