man sentenced to 4 years for illegal bitcoin operation - page 3.

TKeenan

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Quote from: Gavin Andresen on December 10, 2014, 03:03:02 PM

I am not a lawyer, but...

We need to hear from Marco on this one. Marco? Can you please comment? This is crazy BS if true. OK - if the guy was actually doing a heavy money laundering scheme - throw him away for a few years. But if this is a simple crackdown on a bitcoin exchange for no other reason than failure to get money transmitter license then "Holy shit!". I have to believe his deals were with some bad actors and he knew it. Something like that.

commandrix

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Gee whiz, that's not far from where I live (and am moving away from in a couple of weeks). I don't know the guy, though. I want to give him the benefit of the doubt and say that maybe he wasn't aware of that particular law.

leopard2

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Activity: 1372

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So the fascist beasts have incarcerated a human being for doing no harm at all, just exchanging perfectly innocent money for perfectly innocent cryptocurrency? Cry

He is clearly a political prisoner.

It is the sort of thing that makes me wonder if another civil war would be desirable or not.

DannyHamilton

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Quote from: RodeoX on December 10, 2014, 03:30:50 PM

Quote from: DannyHamilton on December 10, 2014, 03:29:13 PM

Quote from: RodeoX on December 10, 2014, 03:25:22 PM

OMG, I wonder if it's you? Danny, I'm going to PM you initials of the person I'm thinking of. If it's you, ...well hey bud!

No. It's not me. I know who you're talking about though.

I thought I knew who most of the bigger players are here in the northern Illinois area, but I didn't know this John D Powell.

By the way, my initials (in case it isn't obvious) are D.H.

Ah, well in that case; are you Satoshi Nakamoto? Cheesy

Who me? Nah. Grin

RodeoX

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The revolution will be monetized!

Quote from: DannyHamilton on December 10, 2014, 03:29:13 PM

Quote from: RodeoX on December 10, 2014, 03:25:22 PM

Quote from: DannyHamilton on December 10, 2014, 02:15:54 PM

Quote from: RodeoX on December 10, 2014, 02:01:35 PM

It's not the guy I thought. He did not run an exchange, he had a few buyers to work with directly. But his mine was impressive when I saw it a few years back.

I'm in northern Illinois (quite a bit north of the Bloomington-Normal area where this guy was from)...

OMG, I wonder if it's you? Danny, I'm going to PM you initials of the person I'm thinking of. If it's you, ...well hey bud!

No. It's not me. I know who you're talking about though.

I thought I knew who most of the bigger players are here in the northern Illinois area, but I didn't know this John D Powell.

By the way, my initials (in case it isn't obvious) are D.H.

Ah, well in that case; are you Satoshi Nakamoto? Cheesy

DannyHamilton

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Activity: 3528

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Quote from: RodeoX on December 10, 2014, 03:25:22 PM

Quote from: DannyHamilton on December 10, 2014, 02:15:54 PM

Quote from: RodeoX on December 10, 2014, 02:01:35 PM

It's not the guy I thought. He did not run an exchange, he had a few buyers to work with directly. But his mine was impressive when I saw it a few years back.

I'm in northern Illinois (quite a bit north of the Bloomington-Normal area where this guy was from)...

OMG, I wonder if it's you? Danny, I'm going to PM you initials of the person I'm thinking of. If it's you, ...well hey bud!

No. It's not me. I know who you're talking about though.

I thought I knew who most of the bigger players are here in the northern Illinois area, but I didn't know this John D Powell.

By the way, my initials (in case it isn't obvious) are D.H.

DannyHamilton

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Quote from: Gavin Andresen on December 10, 2014, 03:03:02 PM

... the money transmission laws and regulations are written very broadly.

Agreed. And I've been working with my State Representative to try and clarify this a bit.

Quote from: Gavin Andresen on December 10, 2014, 03:03:02 PM

They almost certainly apply even if you are exchanging one crypto-currency for another, and no "real money" is involved.

Absolutely.

It just annoys me when people try to say "but it's not real money" when they know very well that the other half of the transaction was the very thing that they like to call "real money".

Quote from: Gavin Andresen on December 10, 2014, 03:03:02 PM

The only saving grace is that the laws only apply if you are operating "a business" -- so occasional lowish-value person-to-person exchanges done as a favor to friends at no markup from the current exchange rate is probably perfectly legal.

Perhaps, but that's a very arbitrary line, and it is impossible to know just how much volume you have to move or how much profit you have to take for the jury to decide that you are a business after all.

If I am doing a person-to-person exchange with my father and I charge him a 10% markup, is it a business?

If I am charging no markup according to the BitStamp rate, but compared to other exchanges it is marked up, and I'm selling to a Facebook friend of a Facebook friend, is it a business?

The net result is to discourage those that are trying to behave from doing anything at all, so that the only people that remain are those that don't care if they are engaging in illegal activity or not.

RodeoX

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The revolution will be monetized!

Quote from: DannyHamilton on December 10, 2014, 02:15:54 PM

Quote from: RodeoX on December 10, 2014, 02:01:35 PM

Quote from: Blazr on December 10, 2014, 01:50:41 PM

Quote from: RodeoX on December 10, 2014, 01:49:14 PM

Oh $#!T, I think I know who that is. Undecided

I'm certain he would not want me to name him, but I know a guy in that area with a sick mine. If it is who I think, there could be more to this story than a mine.

It says he was running an exchange.

It's not the guy I thought. He did not run an exchange, he had a few buyers to work with directly. But his mine was impressive when I saw it a few years back.

I'm in northern Illinois (quite a bit north of the Bloomington-Normal area where this guy was from)...

OMG, I wonder if it's you? Danny, I'm going to PM you initials of the person I'm thinking of. If it's you, ...well hey bud!

ChuckBuck

hero member

Activity: 1372

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better everyday ♥

^^^^^^^ @Gavin Andresen

Wow, I feel like I'm in the presence of royalty for some reason! Cheesy

Guy that basically created our favorite Crypto (along with Satoshi) posting amongst the peeps.

Now I know how Lebron, Jay Z, and Beyonce felt when they met with the Royals at the Nets game.

galiano_tiramani

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I would really like some details on this case to understand if this really was just a bitcoin exchanger or if their is more to the story... he was also charged with marijuana, that could have been the motivator in the prosecution or just a coincidence.

Gavin Andresen

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Chief Scientist

Quote from: DannyHamilton on December 10, 2014, 02:47:29 PM

Quote from: elephantas1 on December 10, 2014, 02:45:31 PM

why is that illegal to run bitcoin exchange? its not real money

It's being exchanged for real money. Therefore, according to the law in Illinois, you have to have a Money Service Business license or face felony charges.

I am not a lawyer, but...
... the money transmission laws and regulations are written very broadly. They almost certainly apply even if you are exchanging one crypto-currency for another, and no "real money" is involved.

The only saving grace is that the laws only apply if you are operating "a business" -- so occasional lowish-value person-to-person exchanges done as a favor to friends at no markup from the current exchange rate is probably perfectly legal.

ChuckBuck

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Activity: 1372

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better everyday ♥

Quote from: redsn0w on December 10, 2014, 02:55:19 PM

Quote from: DannyHamilton on December 10, 2014, 02:47:29 PM

Quote from: elephantas1 on December 10, 2014, 02:45:31 PM

why is that illegal to run bitcoin exchange? its not real money

It's being exchanged for real money. Therefore, according to the law in Illinois, you have to have a Money Service Business license or face felony charges.

This is insane , really insane Roll Eyes

. So without it can you sell bitcoin face-to-face privately or not ?

This guy was exchanging Bitcoin for fiat in the multi millions, so I'm sure you'll be okay if it's a few hundred/thousands etc.

People sell stuff on Ebay and marketplaces for thousands all the time. I think it was just the huge amount of dollar signs without the proper paperwork and licensing that did this man in.

galiano_tiramani

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barely any info in this indictment https://www.scribd.com/doc/249786589/show-temp-pdf

redsn0w

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#Free market

Quote from: DannyHamilton on December 10, 2014, 02:47:29 PM

Quote from: elephantas1 on December 10, 2014, 02:45:31 PM

why is that illegal to run bitcoin exchange? its not real money

It's being exchanged for real money. Therefore, according to the law in Illinois, you have to have a Money Service Business license or face felony charges.

This is insane , really insane Roll Eyes

. So without it can you sell bitcoin face-to-face privately or not ?

ChuckBuck

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Activity: 1372

Merit: 783

better everyday ♥

I'm guessing dude didn't have one of these:

http://moneytransmitterlaw.com/state-laws/illinois/

Hey, if it you want to run a business, you have to abide by the state or government's laws. His fuck up alone, not Bitcoin's.

odolvlobo

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Quote from: galiano_tiramani on December 10, 2014, 02:41:05 PM

Robert A Alvarado
FEDERAL PUBLIC DEFENDER
Suite 1500
401 Main St
Peoria, IL 61602
309-671-7891
309-671-7898 (fax)
[email protected]
  Assigned: 06/20/2014
  LEAD ATTORNEY
  ATTORNEY TO BE NOTICED   representing   John D Powell (1)
TERMINATED: 12/05/2014
(Defendant)

Bradley W Murphy
US ATTY
One Technology Plaza
Suite 400
211 Fulton St
Peoria, IL 61602
309-671-7050
309-671-7259 (fax)
[email protected]
  Assigned: 06/17/2014
  LEAD ATTORNEY
  ATTORNEY TO BE NOTICED   representing USA (Plaintiff)

It seems like there should be an indictment that gives all the details.

DannyHamilton

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Quote from: elephantas1 on December 10, 2014, 02:45:31 PM

why is that illegal to run bitcoin exchange? its not real money

It's being exchanged for real money. Therefore, according to the law in Illinois, you have to have a Money Service Business license or face felony charges.

elephantas1

sr. member

Activity: 378

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why is that illegal to run bitcoin exchange? its not real money

galiano_tiramani

newbie

Activity: 6

Merit: 0

Robert A Alvarado
FEDERAL PUBLIC DEFENDER
Suite 1500
401 Main St
Peoria, IL 61602
309-671-7891
309-671-7898 (fax)
[email protected]
  Assigned: 06/20/2014
  LEAD ATTORNEY
  ATTORNEY TO BE NOTICED   representing   John D Powell (1)
TERMINATED: 12/05/2014
(Defendant)

Bradley W Murphy
US ATTY
One Technology Plaza
Suite 400
211 Fulton St
Peoria, IL 61602
309-671-7050
309-671-7259 (fax)
[email protected]
  Assigned: 06/17/2014
  LEAD ATTORNEY
  ATTORNEY TO BE NOTICED   representing USA (Plaintiff)

DannyHamilton

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Activity: 3528

Merit: 4945

Quote from: Blazr on December 10, 2014, 02:26:39 PM

You'll likely need to get a license in every state you do business in, so if you buy/sell bitcoins with someone in California, you need a license there too.

I'm aware of this. To start with, I was just going to limit my activities to Illinois.

Quote from: Blazr on December 10, 2014, 02:26:39 PM

Typically costs in excess of $100k

I'm hoping you're wrong, but I suspect you're right.

Quote from: Blazr on December 10, 2014, 02:26:39 PM

and you should definitely see a lawyer about it.

Wanted to do as much leg-work as I could on this on my own first. Certainly I'd consult a lawyer before I started any business, but there aren't many lawyers in Illinois that understand bitcoin.

Quote from: Blazr on December 10, 2014, 02:26:39 PM

PayPal operated as an unlicensed money transmitter in a couple of states for many years and were never charged, regulators know that the system is broken. Thats why I'm pretty shocked at how bad this guy got it, there must be more to this case.

I agree that there must be more to this case, but I'm having difficulty finding out much more about it. The article doesn't even state who the prosecuting attorney was, let alone what the evidence was against him.

Topic: man sentenced to 4 years for illegal bitcoin operation - page 3. (Read 13184 times)