US makes Bitcoin exchange arrests

Mr Badger

Mr Badger

Mr Badger

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Joined
27 Dec 2009
Posts
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It's described as "breaking News" although apparently the site was shut down last year.

http://www.bbc.co.uk/news/technology-25919482

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 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.
 
The news story isn't very specific, but what I've read is that they are charged with supplying bitcoins which people used to buy stuff on Silk Road? That seems ridiculous unless I'm reading it wrong? In that case, please arrest the chairman of the Bank of Scotland, I've went straight from one of their bank machines to some shady characters.
 
yer, the bbc story is a little loose on detail, it seems (from time here) that its about not complying with money laundering rules around trying to identify buyers of large volumes of currency (virtual / real) and being actively involved with silk road or at least knowingly taking orders of bitcoins that were to be used on silkroad.

That time article has the full legal submission, not the most interesting, but point 22 is pretty damning (if true) - essentially it would seem they were running an exchange on silk road and advertising through silkroad

So less of a cashpoint down the road from a dealers, rather a cashpoint in said dealers flat with "buy from dodgey dave's " advertising on it :)
 
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Siliconslave said:
yer, the bbc story is a little loose on detail, it seems (from time here) that its about not complying with money laundering rules around trying to identify buyers of large volumes of currency (virtual / real) and being actively involved with silk road or at least knowingly taking orders of bitcoins that were to be used on silkroad.
Click to expand...

Funny, banks launder billions of cartel money yet no arrests are made. People supply bitcoins to silk road users, who just happen to buy drugs with it = they are arrested.
 
They didn't do anything wrong as far as I'm concerned. People should be given privacy, thus it is impertinent to report such activity.
 
From the article:

"The authorities said Mr Shrem was aware that the bitcoins were being used for such purchases, and therefore he was in violation of the Bank Secrecy Act.

The Act requires financial institutions in the US to alert authorities to any suspicious activity that may suggest money laundering is taking place."

So much for the liberatarian pipe dream of freedom and deregulation.
 
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