US makes Bitcoin exchange arrests

BBC ^ | 27 January 2014 | Dave Lee

[Errant]

The operators of two exchanges for the virtual currency Bitcoin have been arrested in the US.

The Department of Justice said Robert Faiella, known as BTCKing, and Charlie Shrem from BitInstant.com have both been charged with money laundering.

The authorities said the pair were engaged in a scheme to sell more than $1m (£603,000) in bitcoins to users of online drug marketplace the Silk Road.

The site was shut down last year and its alleged owner was arrested.

Mr Shrem was arrested on Sunday at New York's JFK airport. He was expected to appear in court on Monday, prosecutors said.

Mr Faiella was arrested on Monday at his home in Cape Coral, Florida.

[Foundahardheadedwoman]

Methodists and hornswogglers and con men seems you are being redundant, but you forgot boondogglers. If the government don’t like I need to get a bucket of them Bitcoins.

[Errant]

Oops, Working link: BitInstant CEO Charlie Shrem Arrested in Silk Road Bitcoin Bust

[TexasGator]

Not exactly.

[Yo-Yo]

How can it be money laundering if Bitcoin is not a currency (or U.S. dollars) according to the federal government?

Any cash transaction over $10,000 must be reported to the gubbnet.

If you buy a car for $30,000 cash, the dealership has to report it to the IRS.

[marron]

They probably shouldn’t physically be in US territory. I don’t know where, maybe Dubai or Singapore or Hong Kong. But not the US.

[Errant]

Looks to me like the danger of messing up (i.e., breaking the law), isn't so much with Bitcoin transactions, but FRN transactions?

Of course real banksters just pay billions in fines using their customers money and get to stay out of jail even when caught directly laundering billions for the drug cartels.

Justice may be blind but her feel for money is excellent.

[2001convSVT]

You have that right, their real crime was in challenging the dollar.

[Errant]

"Perhaps. However, in retrospect Charlie's biggest crime was not being CEO of JPM or, at worst, HSBC, where money laundering and other criminal activity is not only encouraged but rewarded with soaring bonuses. The good news is that one can once and for all confirm that when it comes to "Justice" in the US, some - those who deal with legacy status quo mandated and enforced ponzi scheme fiat - are far more equal than anyone who dares to think outside the Fed's printer."

DOJ Finally Going After The Criminal Materminds With Arrest Of 24 Year-Old Bitcoin Exchange Founder [Zero Hedge]

[cizinec]

Yep. They'll just go offshore. Innovation is no longer tolerated in the Regulated States of Americae

[B4Ranch]

[B4Ranch]

Your bank will report any cash transaction over $3000. Deposits or withdrawls.

[M Kehoe]

Hi.

Maybe I'm missing something in your post...

Any cash transaction over $10,000 must be reported to the gubbnet.

If Bitcoin is not "cash," or currency (i.e. U.S. dollar, or the Euro), according to the federal government, how can the transaction be money laundering?

The only thing I can see is that some individual, or a company purchased a product (i.e. Bitcoin, or steel or corn...) with cash.

I know, I'm missing the point.

5.56mm

[Yo-Yo]

The only thing I can see is that some individual, or a company purchased a product (i.e. Bitcoin, or steel or corn...) with cash.

Yup, and therein lies the rub. Did you read the IRS FAQs I linked to? Here it is again: IRS FAQs Regarding Reporting Cash Payments of Over $10,000 (Form 8300)

Whoever sold the Bitcoins failed to fill out the proper IRS form, and got arrested for it.

[M Kehoe]

Thanks.

5.56mm