Topic: CEO OF BITCOIN EXCHANGE ARRESTED - page 10. (Read 23718 times)
Seems the moral of the story is anyone involved in bitcoin business, legit or not, really ought to bug out of the USA, and find a free country to do business in.
Well actually there is a law. It is the BSA (or more correctly "The Currency and Foreign Transactions Reporting Act of 1970"). The BSA gives FinCEN rather wide latitude in determining which institutions fall within its scope, and what regulatory requirements they must meet.
Which has nothing to do with bitcoins.
@jballs - awesome name
Did BitInstant only deal in bitcoins?
""The Currency and Foreign Transactions Reporting Act of 1970"" doesn't apply to selling bitcoins. Of course Feds will say anything since they have the most guns (for now).
Does "The Currency and Foreign Transactions Reporting Act of 1970" apply to fiat transactions. Did BitInstant make fiat transactions?
The position of the US Government when it comes to money laundering is that to all intensive purposes it make little or no difference if the funds being laundered are USD or BTC. Start with the FINCEN guidance http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html and follow the press releases of government officials. So the pirateat40 "funny money" defence will get you a jail cell.
This news is actually good.
IT seems this is just an extension of the SR investigation. And we all agree that SR was detrimental to btc at this stage. This has nothing to do with the actual btc platform. In fact, in the statement released, there is more evidence that bitcoin as an entity will be left alone. :
"Truly innovative business models don't need to resort to old-fashioned law-breaking, and when Bitcoins, like any traditional currency, are laundered and used to fuel criminal activity, law enforcement has no choice but to act."
http://www.marketwatch.com/story/ceo-of-winklevoss-backed-bitcoin-company-arrested-2014-01-27?link=MW_latest_news
all in all, its a fascinating development, but in a blazay kind of way.
IT seems this is just an extension of the SR investigation. And we all agree that SR was detrimental to btc at this stage. This has nothing to do with the actual btc platform. In fact, in the statement released, there is more evidence that bitcoin as an entity will be left alone. :
"Truly innovative business models don't need to resort to old-fashioned law-breaking, and when Bitcoins, like any traditional currency, are laundered and used to fuel criminal activity, law enforcement has no choice but to act."
http://www.marketwatch.com/story/ceo-of-winklevoss-backed-bitcoin-company-arrested-2014-01-27?link=MW_latest_news
all in all, its a fascinating development, but in a blazay kind of way.
THIS..
If they knew about the fact they breack the law, and they do.. And Law enforcment have been able to track this and act, this is good for Bitcoin. This prove that Bitcoin is'nt more "anonymous" than fiat, afaik, unless super0precautions are taken.
Then, Law Enforcment can't hate Bitcoin at a point they want to destroy it, because they seems able to look and act in case of a criminal action... This makes Bitcoin more interesting to everyone, including law inforcments agencies.
IMO : overall, it's good news if all true !
i hope fbi take down half of bitcoin foundation member next.
Wow. What do you wish upon your enemies?
i hope fbi take down half of bitcoin foundation member next.
Well actually there is a law. It is the BSA (or more correctly "The Currency and Foreign Transactions Reporting Act of 1970"). The BSA gives FinCEN rather wide latitude in determining which institutions fall within its scope, and what regulatory requirements they must meet.
Which has nothing to do with bitcoins.
@jballs - awesome name
Did BitInstant only deal in bitcoins?
""The Currency and Foreign Transactions Reporting Act of 1970"" doesn't apply to selling bitcoins. Of course Feds will say anything since they have the most guns (for now).
Does "The Currency and Foreign Transactions Reporting Act of 1970" apply to fiat transactions. Did BitInstant make fiat transactions?
huh? I bought Jack n the Box today transacting with fiat...am I subject to "The Currency and Foreign Transactions Reporting Act of 1970"
?No...derp
Oh, come on. Were other people paying for your sandwich by depositing fiat into your bank account?
Well actually there is a law. It is the BSA (or more correctly "The Currency and Foreign Transactions Reporting Act of 1970"). The BSA gives FinCEN rather wide latitude in determining which institutions fall within its scope, and what regulatory requirements they must meet.
Which has nothing to do with bitcoins.
@jballs - awesome name
Did BitInstant only deal in bitcoins?
""The Currency and Foreign Transactions Reporting Act of 1970"" doesn't apply to selling bitcoins. Of course Feds will say anything since they have the most guns (for now).
Does "The Currency and Foreign Transactions Reporting Act of 1970" apply to fiat transactions. Did BitInstant make fiat transactions?
huh? I bought Jack n the Box today transacting with fiat...am I subject to "The Currency and Foreign Transactions Reporting Act of 1970"
?No...derp
Shrem made the fatal mistake of not encrypting any emails, and using his company email to organize shady side deals with this guy "BTCKing", who after reading the criminal complaint seems unbelievably retarded and totally inept at money laundering. If you go through the complaint he used the same email address to pay $13,000k in various cash deposits in one day through their payment processor who immediately flagged him. He does this again and again with Shrem having to clean up the mess everytime and even teach him how to avoid detection which the guy still failed to do.
Well actually there is a law. It is the BSA (or more correctly "The Currency and Foreign Transactions Reporting Act of 1970"). The BSA gives FinCEN rather wide latitude in determining which institutions fall within its scope, and what regulatory requirements they must meet.
Which has nothing to do with bitcoins.
@jballs - awesome name
Did BitInstant only deal in bitcoins?
""The Currency and Foreign Transactions Reporting Act of 1970"" doesn't apply to selling bitcoins. Of course Feds will say anything since they have the most guns (for now).
Does "The Currency and Foreign Transactions Reporting Act of 1970" apply to fiat transactions. Did BitInstant make fiat transactions?
Well actually there is a law. It is the BSA (or more correctly "The Currency and Foreign Transactions Reporting Act of 1970"). The BSA gives FinCEN rather wide latitude in determining which institutions fall within its scope, and what regulatory requirements they must meet.
Which has nothing to do with bitcoins.
@jballs - awesome name
Did BitInstant only deal in bitcoins?
""The Currency and Foreign Transactions Reporting Act of 1970"" doesn't apply to selling bitcoins. Of course Feds will say anything since they have the most guns (for now).
This is all theater to scare people.
Shrem is in the good-ole-boy-secret-handshake-club himself, and the charges are completely ridiculous.
Not following FINCEN "guidelines" is not a crime, as there is no law. Even if there was a law, there is no jurisdiction.
Hopefully, some stupid people will sell and give me some cheap buy prices.
Shrem is in the good-ole-boy-secret-handshake-club himself, and the charges are completely ridiculous.
Not following FINCEN "guidelines" is not a crime, as there is no law. Even if there was a law, there is no jurisdiction.
Hopefully, some stupid people will sell and give me some cheap buy prices.
Actually not following FINCEN guidelines is one of the criminal charges against him.
Specifically 'failure to report suspicious activity" which can land you in a federal prison for 5 years.
Since he was arrested in New York, there is plenty of jurisdiction.
~BCX~
Actually, guidelines aren't laws, which is why they're called..."GUIDELINES", which is why there can be no real charges. It's either total bullshit theater to scare people (my guess), or the feds are just doing whatever they want with no respect for even their own laws (also plausible).
Jurisdiction has several elements. Merely being in a geographic area doesn't grant jurisdiction.
Well actually there is a law. It is the BSA (or more correctly "The Currency and Foreign Transactions Reporting Act of 1970"). The BSA gives FinCEN rather wide latitude in determining which institutions fall within its scope, and what regulatory requirements they must meet.
Which has nothing to do with bitcoins.
@jballs - awesome name
Did BitInstant only deal in bitcoins?
This is all theater to scare people.
Shrem is in the good-ole-boy-secret-handshake-club himself, and the charges are completely ridiculous.
Not following FINCEN "guidelines" is not a crime, as there is no law. Even if there was a law, there is no jurisdiction.
Hopefully, some stupid people will sell and give me some cheap buy prices.
Shrem is in the good-ole-boy-secret-handshake-club himself, and the charges are completely ridiculous.
Not following FINCEN "guidelines" is not a crime, as there is no law. Even if there was a law, there is no jurisdiction.
Hopefully, some stupid people will sell and give me some cheap buy prices.
Actually not following FINCEN guidelines is one of the criminal charges against him.
Specifically 'failure to report suspicious activity" which can land you in a federal prison for 5 years.
Since he was arrested in New York, there is plenty of jurisdiction.
~BCX~
Actually, guidelines aren't laws, which is why they're called..."GUIDELINES", which is why there can be no real charges. It's either total bullshit theater to scare people (my guess), or the feds are just doing whatever they want with no respect for even their own laws (also plausible).
Jurisdiction has several elements. Merely being in a geographic area doesn't grant jurisdiction.
Well actually there is a law. It is the BSA (or more correctly "The Currency and Foreign Transactions Reporting Act of 1970"). The BSA gives FinCEN rather wide latitude in determining which institutions fall within its scope, and what regulatory requirements they must meet.
Which has nothing to do with bitcoins.
@jballs - awesome name
I'm sure HSBC spent a lot of time, money and effort to cover their ass, and Shrem will probably cooperate and facilitate a further investigation and get out with hefty fines
I don't think so.
It's easy to misunderstand what happened with HSBC.
The majority of what HSBC was accused of was about not doing enough to detect and block Mexican drug cartels laundering money. Note "not doing enough".
Shrem is accused of something entirely different - not just doing an insufficient amount of work, but knowingly co-operating with someone he knew was a Silk Road dealer explicitly to help him launder money. It's the "knowingly" part that makes the huge difference.
The US DoJ did not seem to have large piles of emails from the head of compliance at HSBC showing him buying drugs and helping known dealers to evade his own controls. With BitInstant they do.
It is actually quite unlikely that there does not exist evicence of wrongdoing at many levels given the scale of HSBC's malfeascence (though I'll agree that it may not have reached their chief complience officer mainly because he/she is likely a careful and clued in person else they would not have gotten the job.)
It is also quite likely that the US DoJ does not have large piles of it, but that is probably mostly because they don't want it. An artifact of the lobbying money spent at various levels of our government.
The trouble with secret evidence and 'parallel construction' is that it makes decisions and actions of the authorities non-believable to the clued in segment of the public. When the likes of Shrem get busted and his counterparts at HSBC simply get an even bigger bonus at the end of the year, all of the otherwise valuable work in trying legitimately fight crime is severely depreciated.
The issue boils down to a few factors and 'transparancy' is one of the most important of these.
It's really no wonder Bitcoin businesses can't get bank accounts, when guys like Shrem were putting on a respectable face and doing that kind of thing behind the scenes. Silk Road and those involved with it are by far the most damaging thing that could ever have happened to Bitcoin, especially so early on.
Maybe, and maybe not. It could be that Bitcoin has actually been surprisingly unmolested so far in part because there are so many mice who seem to have almost a compulsion to stick their heads into the mousetrap. As they rapidly exit the ecosystem, that utility might vanish.
please watch the interview
http://www.activistpost.com/2013/09/whistleblower-hsbc-still-laundering.html
Please understand that the drug war is a racket, controlled by those who are above the law, at the expense of the people of the world, and make no further excuses for this abuse of power. Stand up for your rights before they are entirely gone.
This is all theater to scare people.
Shrem is in the good-ole-boy-secret-handshake-club himself, and the charges are completely ridiculous.
Not following FINCEN "guidelines" is not a crime, as there is no law. Even if there was a law, there is no jurisdiction.
Hopefully, some stupid people will sell and give me some cheap buy prices.
Shrem is in the good-ole-boy-secret-handshake-club himself, and the charges are completely ridiculous.
Not following FINCEN "guidelines" is not a crime, as there is no law. Even if there was a law, there is no jurisdiction.
Hopefully, some stupid people will sell and give me some cheap buy prices.
Actually not following FINCEN guidelines is one of the criminal charges against him.
Specifically 'failure to report suspicious activity" which can land you in a federal prison for 5 years.
Since he was arrested in New York, there is plenty of jurisdiction.
~BCX~
Actually, guidelines aren't laws, which is why they're called..."GUIDELINES", which is why there can be no real charges. It's either total bullshit theater to scare people (my guess), or the feds are just doing whatever they want with no respect for even their own laws (also plausible).
Jurisdiction has several elements. Merely being in a geographic area doesn't grant jurisdiction.
Well actually there is a law. It is the BSA (or more correctly "The Currency and Foreign Transactions Reporting Act of 1970"). The BSA gives FinCEN rather wide latitude in determining which institutions fall within its scope, and what regulatory requirements they must meet.
...
It's just a game, I guess. I guess this is my Super Bowl and the whatever-the-fucks just lost, so they're going to prison. Tough luck, bros - good luck with keeping your asshole covered.
It's just a game, I guess. I guess this is my Super Bowl and the whatever-the-fucks just lost, so they're going to prison. Tough luck, bros - good luck with keeping your asshole covered.
I'll be surprised if Charles spends any time real time in jail. His position and history within the ecosystem has probably resulted in a pretty strong hand. I sure would not want to be one of his 'friends' right about now though.
---
@Bugpower: Oh! Magical Tux would totally make my day. I used to have a lot of sympathy and respect for Mark, but since he fucked me for $5k that has mostly vanished. If he rolls back the transactions and returns my 50 BTC like I asked, I'll put the voodoo doll back in it's box
Indeed - there should be a tick box at the top of this thread that makes people read the actual complaint before posting here! The whole thing seems pretty clear cut to me, if you knowingly launder money, knowingly flaunt AML restrictions, and knowingly assist people in criminal acts, then you should expect this type of thing to happen to you.
Especially when you are the AML Officer for your company!
If you are going to play by their rules, what can you say when they come down on you for breaking them?
Quote from: BadBear
You should try actually reading the article, your analogy would only be valid if all he did was run the exchange, apparently he did more than that.
Indeed - there should be a tick box at the top of this thread that makes people read the actual complaint before posting here! The whole thing seems pretty clear cut to me, if you knowingly launder money, knowingly flaunt AML restrictions, and knowingly assist people in criminal acts, then you should expect this type of thing to happen to you.
At least Lawsky, who is running the NY hearings later this week seems pretty circumspect about it:
"There are always going to be bad apples in any industry."
http://www.bbc.co.uk/news/technology-25918733
Will
...
Shrem needs to be dumped asap.
Shrem needs to be dumped asap.
Probably best to wait and see who he rats out. Maybe some other house-cleaning will be in order and it could be taken care of in a batch.
The obvious choice is Magical Tux. Mt Gox is next big target. There were 9.5M BTC in Silk Road revenue recycled SOMEWHERE in 2012 and 2013, and Mt.Gox was the leading exchange, one whose US accounts have ALREADY been frozen in the process of the SR investigation. The feds are going to do everything they can to cuff Tux. Now they have the leverage to extract the testimony from Shrem. I will be shocked if Gox survives 2014.
Jump to: