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Bitcoin Exchange CEO Charlie Shrem Arrested On Money Laundering Charge
An anonymous reader writes "Charlie Shrem, the chief executive officer of bitcoin exchange BitInstant, has been arrested and charged with money laundering. 'In the federal criminal complaint, the Southern District of New York charges Shrem, the 24-year-old CEO of BitInstant, with three counts, including one count operating an unlicensed money transmitting business, one count of money laundering conspiracy and one count willful failure to file suspicious activity report. Robert Faiella, a Silk Road user who operated under the name “BTCKing,” was charged with one count of operating an unlicensed money transmitting business and one count money laundering conspiracy.'"
Not really. he allegedly did some shady deals which he failed to report. So business as usual in financial circles except he got caught.
Cute, but did HSBC: Conspire to launder money? Willfully fail to file Suspicious Activity Reports(SAR)?
Yes, actually, they did; and further, they actively conspired with Iran to circumvent international sanctions.
And yet, we don't see any of their executives behind bars as a result...
It actually does let you do stuff cheaper, faster, and safer. Cheaper because you don't have to pay money transfer fees. It is WAY faster than most forms of sending payment. It is also much safer insofar as a business cannot arbitrarily reverse the transfer.
Crypto currency is clearly better. The problem is that bitcoin is abstract. Most people don't realize that the money system they are using has no underlying foundation. Those pieces have paper are valuable because people agree they are, not because they are backed by any product or valuable ore. Bitcoin is no different in that respect. Only, it is very clearly abstract while people are able to lie to themselves (or just be ignorant) about the US dollar. People are uncomfortable with bartering using stuff they thing is "worthless" (not backed by anything). Bitcoin hasn't hit the threshold of adoption which most people require to believe something is safe.
This is entirely separate from all the other problems such as volatility, the 51% exploit, and etc.
I'm not sure this is an attack on bitcoin itself, it looks like this is related to the Silk Road dragnet. We can expect to see more arrests related to Silk Road as the FBI goes through documents they've confiscated.
All the same, if I were operating an exchange, right now I would be looking through and making sure I'm complying with the law exactly. Just like bankers do.
"First they came for the slanderers and i said nothing."
Mod parent up. A U.S. Senate commitee held a hearing on Bitcoin a few months ago. All the regulatory agencies were there.
FinCen: We're watching it, no big deal.
DEA: the big cartels aren't using it, the street dealers aren't using it.
FBI: We took down Silk Road, which was using Bitcoin, and Bitcoin didn't make it harder to do that.
Secret Service: No big deal.
Homeland Security: terrorists don't seem to be using it.
IRS: Taxable income is taxable income; we'll deal with it.
SEC: Trading Bitcoin is just like trading anything else. We busted one guy running a Ponzi scheme with Bitcoins and the judge agreed that using Bitcoins didn't make it special.
Conclusion of the Senate committee: no need for special Bitcoin legislation.
All the US law enforcement action involving Bitcoins has been for doing routine crook stuff. Now, China is cracking down on Bitcoins, but they have exchange controls; you have to get permission to swap yuan for dollars or euros. The US has an open market in foreign currencies; you can swap dollars for yen without asking anyone's permission. There are reports to make to FinCen, but they just log the info.