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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.'"
I'm sure that the HSBC executives will also be arrested for their money laundering soon. Any time now.
It's a competing currency. The marketplace says "we have no faith in your dollars." Government says "so?" The marketplace says "we will replace the dollar." Government says "no."
I just wonder how it took so long.
Indeed.
When BofA and HSBC, etc. screw you over, they do it by the book.
The book they helped to write.
Never answer an anonymous letter. - Yogi Berra
What you need to understand is very simple: financial privacy is illegal in the United States. If you run a bank, or any other form of money-transmission service, then you are legally required to report all transactions over a certain amount (I think it might be $10,000, but I'm not sure) to the U.S. government. You are also required to obtain and keep personally-identifiable information on all of your customers, and to report if someone is "structuring" transactions to get in under the limit.
If you don't do these things, you can get arrested even if you knew nothing about the illegal activity your customers were involved in.
Bitcoin can not be stopped
Bitcoin doesn't have to be stopped. It just has to be ignored which is what most people are doing. For 99%+ of people out here in the real world, bitcoin does not solve any real world problems for them. Bitcoin does not allow me (or anyone I know) to do any transactions I currently do easier, cheaper, faster or safer. Most people who use it are either doing so for ideological reasons (hate the Fed, etc) or because they are looking to avoid legal scrutiny of their transactions (money laundering). It's probably of some minor interest to economic academics.
If you don't do these things, you can get arrested even if you knew nothing about the illegal activity your customers were involved in.
Unless you are HSBC. Laws only apply to peasants trying to get out of poverty by seizing new business opportunity that challenge established monopolies held by rich noblemen.
Exactly - bitcoin is always talking about how it is anonymous blah blah blah - well, what do you think happens when people can start moving money around, across international borders, with anonymity? It doesn't take a rocket scientist to predict who is going to flock to it. And since when is it a good idea to put ones money into completely anonymous 'banks' (read - 'bitcoin exchanges') which are who knows where, run by who knows whom with no oversight or recourse for fraud? When the sheep decide to go sleep in a wolf den because they are afraid the trees may drop acorns on them, how surprised can you be when they become dinner?
You completely bypassed the point I was making.
The money supply has almost nothing to do with the amount of physical currency, because of fractional-reserve banking (and other games without handy names). Do you think inflation in America has anything to do with the umber of printed dollar bills in circulation?
For bitcoin to be mainstream, used by ordinary people for shopping, there will need to be BTC-denominated savings accounts, CDs, and credit cards (and likely insurance policies as well). In other words: fractional-reserve banking.
Socialism: a lie told by totalitarians and believed by fools.
Our big challenge isn't to get the 1st and 4th amendments applied to the internet. The problem we have to resolve is how to expand our 1st and 4th amendment protections to cover all the information that can now be collected without making it illegal to walk down the street.
What the NSA is doing for the most part is collecting all the information that sits outside of what is actually protected by law, most of it has always been legal because it wasn't possible to use that mass of information to actually determine anything, now it is.
It's always been perfectly legal for the police to follow you everywhere you go on public property and write it down, it just wasn't cost effective to do it and the cops stuck out like a sore thumb, today we've all quite happily placed GPS tracking devices in our pockets so the police can get all that information without having to actually do any work and with modern computers they can actually process it.