How to NOT be a victim of a sting operation - page 4.

BCB

vip

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BCJ

Quote from: BTCLuke on February 07, 2014, 04:05:36 PM

Of course bitcoin isn't money by law and therefore this can't be considered "Money laundering"

This is patently NOT true.

Bitcoin according to FinCEN is "other value that substitutes for currency" as per FinCEN's FINAL RULE: Bank Secrecy Act Regulations; Definitions and Other Regulations Relating to Money Services Businesses
76 C.F.R. 43585

***
The regulatory definition of ‘‘money transmission services’’ includes the phrase ‘‘or other value that substitutes for currency’’ to state that businesses that accept stored value or currency equivalents as a funding source and transmit that value are providing money transmission services.
***

http://www.gpo.gov/fdsys/pkg/FR-2011-07-21/pdf/2011-18309.pdf

BruceFenton

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Yep.

The complaint against the guy who was arrested a couple weeks ago (not Shrem) said that an undercover informant attempted to buy some Bitcoin and said "I need these Bitcoin because I've got my eye on a sweet bag of cocaine on Silk Road" or some similarly ridiculously stupid thing.

The seller ignored the request and never sold him coins (but they still mention it in the complaint which is interesting)

bitcool

legendary

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Live and enjoy experiments

It seems like greed clouded their judgement, or Is it possible that the sellers may interpreted this as a lighthearted joke? after all, only really dumb criminals would say something like that. The way how they said it makes big difference.

IMO it's a blurry boundary and a dangerous trend, the law enforcement is trying to build their cased based on the concept straight from the "Minority Report".

bitpop

legendary

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Greedy fucks should rot in jail. Making tons of money with huge markups is not in the spirit of Bitcoin.

BTCLuke

hero member

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My other Avatar is also Scrooge McDuck

Quote from: rat on February 07, 2014, 04:29:00 PM

pretty much makes LocalBitcoins transactions illegal in Florida.

BULLSHIT.

Laundry may be a charge they attempt to tack on, but they never would have made the sting without the accessory to a crime part... They know better than we do that bitcoin isn't a currency so it can't be laundered.

My whole point was that they were busted because they were selling BTC to criminals. STOP SPREADING FUD, it scares the noobs.

CryptoPanda

sr. member

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Unfortunately a lot of this will happen, everything that disruptive usually has love/hate relationship with the press.

Sovereign_Curtis

newbie

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Quote from: keithers on February 07, 2014, 04:13:57 PM

Great

another idiotic move. We need adopters of bitcoin to behave themselves. A few are setting a very poor example which reflects on all of us, and most importantly hurts our bottom line.

Unfortunately it takes a hell of a lot more good examples to make a headline.

rat

sr. member

Activity: 253

Merit: 250

"Both of the men are being charged under two laws. The first is Florida’s anti-money laundering law, which targets money exchanges above $10,000.

The second is running an unlicensed money transmission business. Statute 560.125 forbids people from engaging in frequent unlicensed money transmission-type transactions of more than $300 but less than $20,000 in any 12-month period in the state."

pretty much makes LocalBitcoins transactions illegal in Florida.

keithers

legendary

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This is the land of wolves now & you're not a wolf

Great

another idiotic move. We need adopters of bitcoin to behave themselves. A few are setting a very poor example which reflects on all of us, and most importantly hurts our bottom line.

BTCLuke

hero member

Activity: 526

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My other Avatar is also Scrooge McDuck

By now you're starting to hear of the Florida sting of 2 ordinary LocalBitcoins sellers.

http://krebsonsecurity.com/2014/02/florida-targets-high-dollar-bitcoin-exchangers/

Before anyone runs around shouting that the sky is falling; they screwed up; it's their own fault:

Quote

According to court documents, the agent told Michelhack that he wanted to use the BTCs to purchase stolen credit cards online.

Quote

...documents show that the undercover agent told Reid he wanted to use the BTCs to buy credit cards stolen in the Target breach.

Of course bitcoin isn't money by law and therefore this can't be considered "Money laundering" - But they'll probably try to convict Michelhack & Reid for being accomplices to crimes.

Therefore, if you sell on Localbitcoins; DO NOT EVER sell to someone who tells you that they are going to commit a crime with your coins!

This should be really obvious, but it must be said... A real criminal doesn't want you to know what he's going to do with your BTCs, so you can COUNT ON it being a sting operation if they tell you they're up to no good. 100% of the time.

This is how they are going to hurt bitcoin as a whole; picking off less-than-brilliant people like they did Michelhack & Reid here and I have no doubt the press is going to run with headlines of the moneylaundering to scare more newbies away from BTC.

Please tell everyone you know on Localbitcoins to be ready for a jail cell if they ever sell a millibit to anyone that says they're going to use it for a crime of some kind. This "successful" sting operation is only going to embolden the authorities.

Topic: How to NOT be a victim of a sting operation - page 4. (Read 7545 times)