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Florida Arrests High-Dollar Bitcoin Exchangers For Money Laundering
tsu doh nimh writes "State authorities in Florida on Thursday announced criminal charges targeting three men who allegedly ran illegal businesses moving large amounts of cash in and out of the Bitcoin virtual currency. Experts say this is likely the first case in which Bitcoin vendors have been prosecuted under state anti-money laundering laws, and that prosecutions like these could shut down one of the last remaining avenues for purchasing Bitcoins anonymously."
If someone comes up to your business and says "hey i'm going to use this for illegal purposes", and then you agree to accept the money, you're in violation of several laws. RICO is one, and so is money laundering in some cases. His biggest mistake was at the point when they said what they were going to use the money for, in this case to buy stolen credit cards online, he accepted the deal and continued working with them. He should have said that he doesn't do anything illegal and not dealt with the potential customer at that point. That would have shielded him from liability.
The entire 'barter system' scares governments as they cant track and tax it. Things like bitcoin will be crushed, one way or another.
They also are not keen on regular currency, for similar reasons.
---- Booth was a patriot ----
As to the topic itself, of-course the gov't sees Bitcoins and thinks 'money laundering'. Don't you know? All money belongs to the government,
All money is regulated by the democratically elected government, yes.
they can't stand the thought of people figuring out this whole freedom thing,
No, people with a dictator complex like the thought of creating something unaccountable to government, i.e. unaccountable to the people.
what if the people realise they don't actually have to pay taxes en mass and simply don't pay.
"What if Somalia?"
What happens when everybody simply stops paying?
What if everyone just starts raping and shooting everyone? What if the real world was like one dimensional fiction? Nerds, tell us.
It depends on how law enforcement first came into contact with those that were arrested. The article is somewhat ambiguous about how these guys came to the attention of law enforcement. It does appear that the only real crime these guys committed was being "unlawful money transmitters", which seems like a crime that should not exist to me. When the undercover agent told them that they wanted the bitcoins in order to do something illegal, they should have told them, "Sorry, I will not do business with you." Not because I think that they should legally have to care, but because people who genuinely want bitcoins to do something illegal are not likely to tell you that. This suggests that the person who is telling you his reasons is something other than someone who wants to conduct a transaction. It also seems likely that the reason they presented that they wanted to use the bitcoins for something illegal was because they doubted a jury would have convicted the men on the "unlawful money transmitters" charge.
Ultimately, I do not know if this was entrapment by the legal definition, but it does seem like a waste of law enforcement resources.
The truth is that all men having power ought to be mistrusted. James Madison
This is a sincere question... not a challenge to the usefulness or benefits of bitcoin, but just a question that, if bitcoin is to really have any kind of future, I think that people who *are* law abiding and might want to use it someday really need to understand.
File under 'M' for 'Manic ranting'
I would make a case for entrapment.
If you step into trap willingly, it ain't entrapment.
Still, law enforcement is breaking the law when they create crimes to arrest people for.
This is beyond stupid.
Money laundering has been practiced for over 6000 years, but the term itself comes from the prohibition era of American history.
money laundering
I see a lot of the comments so far are about how stupid it was to go through with the transaction after it was mentioned that the buyer was going purchase illicit material with it.
However, as I understand it from Krebs' post - and the Florida law in question - that doesn't necessarily factor into it. The law seems to state that as soon as you act as a money transmitter, and the exchange is between $300 and $20k within a 12 month period, without being licensed to do so makes you liable for a third degree felony.
Some questions I would have for a lawyer that actually knows the ins&outs of Florida state law in this field:
1. Is the above, in fact, the case? I.e. are the charges on those accounts completely unrelated to the disclosure of what the purchased material (in this case, Bitcoin) would be used for?
2a. Does that mean that the state of Florida sees Bitcoin as a currency?
2b. If it does not, then how would this same law be applied to e.g. physical goods if used as a material for exchange (e.g. gold nuggets, diamonds, etc.)
3. Would similar apply to a travelers going in opposite directions exchanging their currencies when the value exceeds $300 (something easily possible if you forget to empty out your wallet), rather than going through the official exchange bureaus at the airport (and incurring the rather hefty exchange fees)?
If anyone comes to you and says something along the lines of, "I've got some drug money to launder, I need $30,000 in bitcoins..." don't say yes. I mean, Jesus Christ, how fantastically stupid do you have to be to go for that?!
On the other hand, one has to be fantastically naive to expect a similar magnitude of business from people who only want to buy a cup of coffee at Starbucks. BTC attracts criminal proceeds like honey attracts flies. In essence, there is hardly any legal use of BTC (outside of pure speculation and experiments.)
One would be better off buying that TV or that subscription with an inflating currency than with a deflating one. Credit cards also give you insurance, and protection, and a small kickback, and a grace month during which you own the item but haven't paid for it yet.
The new Slashdot design is based on Windows 8. That fact alone, even aside from the numerous usability issues, indicates that the new owners have no fucking idea in the world what they've acquired.
Slashdot is a technology site, a geek site, an open source site, a programming site, an Internet / Web advocacy site. But more than that, it is a Linux community site. It lives and dies by its community. That community, by and large, is made up of passionate Linux advocates who can be whipped into a frenzy at the mention of Microsoft, who think Bill Gates is the Great Satan, who sincerely believe in free and open source software, and who implement that passion in their lives, hobbies, and jobs. Sure, not everyone here fits the mold. But that's the core of the community.
As one single data point, I work on simulators in the aerospace segment. We develop and integrate specialized, whole-system, software-only simulators, supporting software development when the hardware has limited availability or hasn't been built yet. Our user community is not large, but includes key technical people at well known organizations. Like others we interface with, our work has gone from Windows and Linux in the beginning, to mostly Linux, plus Windows if we have to. That's how we like it. Linux works for us - it's developer friendly, it's rock solid, it's quite deployable, and it lets us do what we need to do. And a bunch of us come to Slashdot to catch the news on Linux and other geek-worthy subjects, and discuss it with others.
And now the owners, having acquired this rather unique and valuable site, want to make it into Windows fucking 8 - the friendly, cuddly, but unusable Fisher-Price operating system that represents everything we despise? The mind reels. You might as well just make it a SEO parking page for Microsoft.
Seriously, DICE, do not do this thing. I know you don't care about the history, community, or shared values of this site, but this move will destroy them, and take the site with it. It will become a ghost town, abandoned by its residents, only visited by tourists and people that got lost on their way somewhere else.
There is a distinct lack of video, and for a website to really pop these days it should begin playing any streaming content the instant you load a page
I can't think of a better example of what I DON'T want slashdot to ever do.
"really pop" - WTF, are you fucking serious?
My ism, it's full of beliefs.
Still, law enforcement is breaking the law when they create crimes to arrest people for.
It happens all the time, the best example being the "To Catch a Predator" type stings. Law Enforcement create a situation, a honeypot if you will, and waits for the flies. Fake pawn shops for fencing stolen goods is another example. Cops have also been known to encourage murder-for-hire in domestic situations like messy divorces.
But like this Bitcoin thing, "entrapment" is not legally defined the way most people suppose it is... In criminal law, entrapment is when a law enforcement agent induces a person to commit an offense that the person would have otherwise been unlikely to commit. They seem to get around it by supposedly providing opportunities to walk away. But like a fat person in front of a table piled high with Little Debbie's, it usually works out for the cops...
If you want news from today, you have to come back tomorrow.
Beta isn't evolution, it's chlorination. It will completely sterilize slashdot of all reasons to come here.
I'm not quite sure what this is meant to achieve.
Does it hide the source of your funds?
No - if you pay 10 bitcoins in and get 10 bitcoins out, the fact that they may not be the same bitcoins isn't going to confuse anyone. If you've logged everything, as you suggest, this is going to be transparent.
Does it avoid anti money laundering ("AML") legislation?
No - AML legislation makes it an offence to attempt to hide the source, ownership or control of funds. Running this scheme would be an offence in itself.
Will it allow you to bring the money into regular circulation?
No - this isn't going to provide any response to the question "what is the ultimate source of your funds", which is the key question that banks, lawyers and other regulated bodies are required to ask as part of their AML procedure. (In fact, in my jurisdiction, the suspicious Bitcoin transaction would be enough to require them to make a report to the police).
It seems to me that your suggestion takes a very literal interpretation of "money laundering", and assumes that it means breaking the link between the exact money that you obtained illegally and the exact money that you have now. That's part of it, but there's a lot more involved and, crucially, breaking that link is not enough on its own either (i) to pass AML checks, or (ii) to avoid conviction for the AML or handling the proceeds of crime offences.