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Bitcoin Exchange CEO Charlie Shrem Arrested On Money Laundering Charge

Posted by samzenpus on from the paying-the-price dept.

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.'"

10 of 330 comments (clear)

  1. HSBC by The+Atog+Lord · · Score: 5, Insightful

    I'm sure that the HSBC executives will also be arrested for their money laundering soon. Any time now.

    1. Re:HSBC by lgw · · Score: 5, Insightful

      You were sarcastic, but that is the whole freaking point of the rule of law: a list of rules such that, if you follow those rules, you won't be arrested. It makes for a far better society than one where you can be arrested whenever you annoy someone important, regardless of the rules.

      --
      Socialism: a lie told by totalitarians and believed by fools.
    2. Re:HSBC by viperidaenz · · Score: 5, Insightful

      You are under arrest on suspicion of treason!
      What did I do that amounts to treason?
      What ever the king decides!

    3. Re:HSBC by pla · · Score: 5, Insightful

      "Sorry, matter of national security. No, you can't see the evidence against you. No, we don't have to physically present you to the court to stand trial".

      And if you disagree with that... Better stay out of sight of the sky 24/7 or we might spot you "associating" with a terrorist leader and you know how that collateral drone damage works on you and your whole village... Er, neighborhood.

    4. Re:HSBC by pla · · Score: 5, Informative

      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...

    5. Re:HSBC by Dahamma · · Score: 5, Insightful

      Stop trying to pretend this is a used car deal ("don't worry about the total, it's just $179 a month!"), let's just put the actual numbers out there - they were fined $1.9B for laundering $680B. The government isn't punishing them by "taking their future profits", it's giving them a massive break by forcing them to give up a small fraction of the profits they already made on illegal activities.

      If you were fined 5 weeks of income (and no jail time) after having made a shit-ton of money in the last 4 years doing something illegal, it wouldn't sting at all. In fact, you'd almost be motivated to try it again...

  2. Re:I was wondering when that would happen by jratcliffe · · Score: 5, Interesting

    If they were doing what they are alleged to have been doing using Yen, or Dollars, or Pounds, or whatever, it would still have been money laundering. Bitcoin doesn't change that.

  3. Re:And so it begins... by lxs · · Score: 5, Informative

    Not really. he allegedly did some shady deals which he failed to report. So business as usual in financial circles except he got caught.

  4. Re:And so it begins... by tripleevenfall · · Score: 5, Interesting

    since bitcoin isn't a currency so much as it is a ledger where everything is tracked and traceable, it does not seem like the ideal venue for illegal transactions. The "paper trail" is going to be out there.

    One article I recently read described Bitcoins as "prosecution futures". I think they might have been right.

  5. Re:Not one single action... by Animats · · Score: 5, Informative

    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.