Topic: How to NOT be a victim of a sting operation - page 2. (Read 7545 times)

The news piece has been all over the place and actually mentions three people arrested.  Reading the court docs will be more telling.  The smart thing for large seller would be to switch accounts at certain intervals on localbitcoins to not attract the label of selling XBT "as a business"  Also in communications with buyers make it clear that it's a personal sale / hobby activity and not a for profit business reselling XBT.  localbitcoins if they care enough about this could also change the history logs to stop showing past XBT volumes as the news story made it seem that it was a factor in the arrests as well.

Yes, I know, I read his site regularly.  But even smart people get false information "leaked" through them now and then.  For the record I am definitely not accusing Krebs of perpetrating a hoax.  But I do suspect that somebody (law enforcement? fincen?) might be using him as an outlet.

The major red flag for me is that he mentions "court documents" three times in the article but doesn't link to them.  He lives almost 1,000 miles from Miami and this went down less than 12 hours before he posted the article, so if they're not in electronic form I don't understand how he could have seen them.

He's also active in his articles' comments, including this one, but is strangely ignoring peoples questions about the "court documents".

Another intermediate possibility is that some mid-level law enforcement officer jumped the gun on this, running a sting and grabbing these guys without discussing it thoroughly with senior enough prosecutors.  End result these guys get set loose with no charges in a few days and we never know the difference.  Since this was a sting there were clearly "operations" people involved; maybe it was all operations people and no lawyers, and right now those operations people are sitting down with a bunch of state attorneys who are explaining to them that "yes, that law is on the books" but their time is not well spent (nor their careers advanced) by chasing kids for trading baseball cards.  Even if baseball cards are "trendy" right now and all over the news.

I highly doubt it.  Krebs is a pretty smart and connected guy. He said a press release was issued.

However the Miami State Attorneys' office has not yet published that press release.

http://news.miamisao.com/

Call them and ask for a copy of the press release. I'd like to read it too.  They only unseal portions of indictments if and when they will not interfere with the ongoing investigation so it may be a while before we see the legal documents.

EDIT: which means more arrests could be pending...

I think the Krebs article might be a (law enforcement originated?) hoax.

Krebs' website does not have links to any court documents, despite referring to "court documents" -- and he's ignoring the commenters (see comments on that page) asking for them.

The story seems to have been picked up by only three other sites, all of them small local news outlets.

I'm starting to wonder if law enforcement didn't "leak" a phony story to try to scare people.

It's a dirty trick and borders entrapment. I'm sure they'll have proof to show that this happened. They'll need it to secure a conviction.

It's even worse than that. The cops could also be lying about mentioning stolen goods, and it hardly matters.

The US is really a third world police state. In most of the civilized world it's just illegal for the police to incite to commit a crime.

Plus, is all this a joke? So they arrested two guys because the cops told them "I will use this money to buy stolen goods"? An US judge will accept that BS? Really? Again, in a civilized country the judge would tell to those cops to gtfo and to stop harassing citizens.

Basically dont do anything stupid or grossly illegal and im pretty confident that you will not be a victim of a sting operation...

What is significant about this is that actual victims that have had bitcoins stolen by actual thieves in felonious quantity have been given the complete brush-off by law enforcement, but here they are buying currency from a single individual who is not defrauding anyone, where there is and would be no victim, just to indict.

They can tack on any story that they want to the Bitcoin exchange "he said he got the bitcoins from selling drugs...", "we said we wanted to buy drugs and he sold to us anyway", even if such verbal exchange never happened, and can still harrass people through the plea-bargain or bankrupt you + 20 years jeopardy game. Why did these lawkeys decide that bitcoin currency exchangers were going to be their quota-makers?

Bullshit! The spirit of bitcoin is personal freedom and capitalism. That is the embodiment of the free market.

Yes it does and yes it is.  Sad but true

I went to the teller at the bank and withdrew some money and told the teller, "ya, I need this to buy drugs". Just a chuckle and a "good luck" as she handed me my money.

Should I report Chase bank?

I agree, there is definitely a non-compliance by the federal government. And that disruption is one of the strongest things that we have.

This is the thing. We need to recognize our legal footing. We are in the right. It's the feds that are out of compliance with the U.S. Constitution.

Gambling is largely considered illegal in the U.S., but it absolutely thrives in Nevada. That's because that state asserted its constitutional authority, feds be damned. This is also starting to happen with states pushing back against federal drug laws, especially regarding marijuana. Even Obama said he will back off states that push back in that way.

Most of us here have no illusion about how disruptive Bitcoin is and how much the feds have incentive to push against it. We need to know about and use every legal and political weapon we have.

"powers not granted to the federal government"


We may need preemption at the federal level before we see any clarity in this issue.

Damn you 10th Amendment!

On a serious note, there is so much muddiness with this. On one hand, this forces the conversation again about what is "money" in this new age (I recall this being discussed during the .com boom and then later on with game currencies being exchanged and bartered for real money, but I can't remember if anything substantive came of it).

Even the current definition about "virtual currency" is too loose especially when referring to Bitcoins. And the fact that you can be charged if you supply someone who is going to use Bitcoin for nefarious/illegal purposes is quite murky in and of itself. I mean, I don't think the same kind of ruse would be used with USD per se in the sense. Although, the amounts and that sort of thing kinda hinted at quite the egregiousness.

Again, that's FinCEN. That's federal. What happened in Florida pertains to Florida state case law. I don't have to be a lawyer (and neither should you) to know there is a difference between federal and state. That's why, for instance, registering with FinCEN as a money transmitter, which is actually pretty easy, does NOT mean you can operate in all 50 states. It only clears you federally. You must also fit within the legal box of each state separately (which is where it gets expensive/complex). State and federal are separate legal jurisdictions.

I am not a lawyer either but I believe this is where you are incorrect.

virtual currency is "other value that substitutes for currency." 

- at least according to FinCEN.

so unless you or someone can take that to court and challenge it, so that is pretty much the law in the US.

Yes. That's my point. That can't possibly apply to Bitcoin in its entirety. It's one judge.


It doesn't allow Texas to regulate it as either currency exchange or money transmission. Don't you see? You're thinking exactly like they want you to, which is they can interpret law as they see fit. They cannot unless people allow it. To be involved in money transmission you must be transmitting money. The question then becomes what is money? That has to be defined somehow. Otherwise, like I say what happens with wheelbarrows full of grass cases?

The government will be reluctant to legally write that Bitcoin is money, because when they do it causes an avalanche effect of all sorts of things to apply, legitimacy being just the start. Yet until it is specifically defined as money any charge of money laundering can be successfully challenged. This is what I believe anyway. I'm not a lawyer.

This was a very specific ruling with regards to a very specific case:

****
It is clear that Bitcoin can be used as money. It can be used to purchase goods or services, and as Shavers stated, used to pay for individual living expenses. The only limitation of Bitcoin is that it is limited to those places that accept it as currency. However, it can also be exchanged for conventional currencies, such as the U.S. dollar, Euro, Yen, and Yuan. Therefore, Bitcoin is a currency or form of money, and investors wishing to invest in BTCST provided an investment of money.
****

This ruling does not, however, allow the Texas Department of Banking to declare bitcoin a "currency" and regulate it as "currency exchange" instead of "money transmission."