Topic: Shrem to jail for two years!!! Holy shit! - page 5. (Read 8191 times)

Under current Federal mandatory minimum sentencing rules, Ross will most likely be serving life in prison as a drug kingpin if he's convicted.


Corrected that for you. This sentence is due to Shrem's involvement in laundering money for drug dealers, not what "kind" of money he helped them launder. I'm honestly surprised he didn't get more than 2 years since he supposedly knew what he was doing. While I'm personally against the war on drugs and I don't think the government has any business protecting us from our own choices, unfortunately that's the law as it stands now.


Agreed. If we're going to enforce these idiotic laws that punish victimless "crimes" then someone at HSBC should be in prison right now. There is a difference, though, since a corporation like HSBC can't technically be arrested and it's difficult to find the individuals actually responsible for the money laundering, it makes sense that they were punished with a fine instead. But personally, I think if we're going to enforce drug and money laundering laws, their fine should have been a lot bigger (at least in the hundreds of millions for the almost 1 billion dollars they admitted to laundering) and their banking license should have been suspended or revoked. Especially considering that they laundered money for violent drug cartels who are responsible for thousands of murders.

Then again, part of the reason we continue to enforce pointless drug laws and waste taxpayer money putting people in prison for victimless crimes is to protect those murderous cartels who have backroom deals with the DEA to keep themselves in business.


Maybe if he were serving his time in a state prison, depending on the state. There is no "good behavior" time, probation or parole for Federal prisons. There is a clemency program, but these days that's more for show than anything else.


More likely it's because it was an individual who could be easily prosecuted and not a major multinational corporation who can afford to buy politicians, prosecutors and judges. It could also have something to do with the fact that the major multinational corporation was working for a cartel who can afford tanks and fighter jets and has beckroom deals with the DEA to keep itself in business.

While I do disagree with the law, as it stands, 2 years is a pretty light sentence for someone in Shrem's position and if he had taken it to trial and been convicted he'd probably be facing a lot more time.

or ... do bitcoin business in paradise island.
well ... like all "wall street bonus"  

even though he is a "felon", it is my understanding that he still has a job lined up (or is currently working - not sure which). With few exceptions, companies are not barred from hiring felons and Charlie has a lot of experience managing a business and a lot of experience in bitcoin that he should not have trouble finding work

the government is sending a message to bitcoiners; stay out of the game unless you're backed by silicon valley

This is nuts. another political prisoner.

With the exact same logic, every bank employee, credit card company employee, or anyone working for an institution operating an ATM - in short, everyone exchanging cash for balance, could be put into prison.

Because their customers could use the cash or the balance for something illegal.

Shrem was not even doing it directly: BTCKing was like an operator of an ATM, and Shrem the armored car company that fills/empties the ATM. Some customers drawing cash from the ATM were breaking the law, and the guy driving the armored car gets fucked.

Blatant abuse of power by the government!  

"Rakoff said Shrem, 25, was not "some kid making a one-time mistake," but someone who "excitedly" participated in a novel crime involving bitcoins that contributed to drugs sales."

Bah, back then he was 'just a kid', this is sad to see.

yeah, saw that.  Judge gave him a break and let him get his shit together before reporting. 

I doubt we'll see guys taking it casually when they decide to ignore money laundering laws in the future.  Two years in the Fed Pen is not a cakewalk. Felon for life.  Not a good place to get for a few bucks.

You got it right.  Since it is not 'real', you are allow to use it for murder, drugs, rape, extortion.  All those laws are out the door because they only count for 'real' money.  Awesome!: a world with no laws, simply because someone declared bitcoin is not 'real'. 

Good thinking buddy. 

I don't think people will be discouraged from starting a bitcoin related business because of this. It was mentioned previously that Charlie agreed to follow the AML rules and ended up not doing so.

I think it is pretty clear that Charlie broke the law....the real question is should the law be in it's place in the first place, and is the punishment (according to the law) an appropriate punishment?

2 years, could have been worse. He's still rich as fugg, right?

He has 90 days to surrender. Still tweeting.

I thought stuff with btc cant be illegal cuz its not real currency

This is very sad, not only because Charlie is in Jail, but because it discourages people from wanting to create businesses with Bitcoin.

1. He will get out early.

2. While prison sucks, if you are rich, it isn't completely terrible.  Yes it sucks, but a year is doable.

3. I don't think he did anything wrong, but he knew very well that what he was doing might land him in jail. He even talks a little about it in "The Rise and Rise of Bitcoin". He knew it was wrong in the eyes of the government  even if what he was doing wasn't wrong in our eyes.  He rolled the dice.  He lost. 

The government alleged that he made more then he really did. I am not 100% sure on their logic, but it may potentially be that all of his proceeds is "profit" even though he needed to give his customers bitcoin. It is my understanding that the total trade volume was ~$1 million.

It is my understanding that he had to pay most of the fine from his own personal funds

If Shrem made only $20k from his BitInstant shenanigans he made a lot more elsewhere or is some sort of a trust-fundy or something.  $20k doesn't get one half a nightclub and cigars to chomp on while calling the female groupies 'toots' or whatever.  (What a child!)  He probably made a bundle just stacking Bitcoin.  Doesn't mean that it would be appropriate ethically for the govt to snake it, but I think everyone recognizes that he willingly stuck his head into the alligator's mouth.  Nobody knows what the govt left him with so it's hard to infer anything one way or another about how cooperative he was.  It seems possible at this point that the govt didn't really need his info after all except as a nicety to cross-check other results.  Besides, Shrem was not the only guy with good access to info from BitInstant.

If he didn't cooperate with the government and didn't give the silkroader's id's, he deserves this kinda punishment.
If something is illegal and you do it then you got busted; you've to pay the price...

I think he was essentially betting that law enforcement would not be able to take down silk road as this was where the majority of the evidence against him was found (I think there was also some evidence found on freedom hosting (?) servers that was hosting some kind of tor email service).

He was also putting a good amount of trust in DPR (n/k/a Ross - most likely) to periodically purge potentially incrementation information about SR's users (which Ross did not do - he actually backed it up in the US).

In theory, Charlie could have fought the collection of the evidence against him as being unconstitutional, however this would be somewhat of a long shot plus he was facing decades in jail if found guilty of all counts against him

there are NO bitcoin licences as of 2013-2014.. so that statement is incorrect. the problem is a bitcoin exchange that happens to touch FIAT.. by the act of swapping dollars for bitcoins means a fiat licence is required. and which then comes with rules of use for fiat. its not a fault of bitcoin that shrem now has 2 years.. its a fault of agreeing to FIAT regulations.. and then secretly avoiding them

I think it's very easy to get into trouble being an exchange or money transmitter when you're dealing with bitcoins. So many regulations and hoops you've got to jump through.


And the banks get away scott free.

Wow, he's a very lucky kid with an obviously great legal team. His charges and sentence could have been much worse. It's too bad he couldn't have just listened to his inner voice and not done it. If you watch The Rise and Rise of Bitcoin you will see several times that he looks nervous and says something like, I need to make sure we're not breaking any laws, that we're compliant. Watch that movie with the knowledge of what he did and you will spot the fear in his behavior.

Franklin Jurado got 90 months for that crime. Willie Whitehurst was sentenced to 151 months. Anthony Foster was sentenced to 121 months. Brandon Royce Taylor was sentenced to 180 months. Thamous Eugene Taylor - 60 months. Cynthia Marquez - 120 months. One after another conspirators to money laundering get long sentences. 24 months is like a walk in the park compared to what could have been a healthy chunk of his life.