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Link Posted: 1/27/2014 11:15:29 AM EDT
Govt Hates Compition.
Link Posted: 1/27/2014 11:16:25 AM EDT
Link Posted: 1/27/2014 11:16:28 AM EDT
Not like they're going to let this kind of threat to the tax base slide.  Examples shall be made.
Link Posted: 1/27/2014 11:17:45 AM EDT
Link Posted: 1/27/2014 11:19:03 AM EDT
by definition, not a big donor to dem causes.
Link Posted: 1/27/2014 11:28:04 AM EDT
By that logic, the US government should be brought up on drug charges since US Currency is used to purchase illegal drugs.




The Founders and all who fought for Freedom from England are rolling over in their graves.

Link Posted: 1/27/2014 11:29:11 AM EDT
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Originally Posted By LoBrau:
Not like they're going to let this kind of threat to the tax base slide.  Examples shall be made.
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That's the bottom line! Bitcoin will be outlawed if it becomes too popular.
Link Posted: 1/27/2014 11:37:47 AM EDT
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Originally Posted By LoBrau:
Not like they're going to let this kind of threat to the tax base slide.  Examples shall be made.
View Quote


Yup.

Besides, laundering charge is only a placeholder while they turn his life upside down find more charges to pile on with.
If nothing really good is found, child porn will appear on his computer.

Examples must be made.  Too many people are trying to copy BCs success.
Link Posted: 1/27/2014 12:05:54 PM EDT
I don't get how the government can force people to become de facto government agents.
Link Posted: 1/27/2014 12:31:48 PM EDT
gee, couldn't see that coming........
Link Posted: 1/27/2014 12:33:36 PM EDT
ya the guy sold more then whats allowed by law. gave a discount and knew the guy was going to resell the BTC in the grey area..

He screwed the pooch all the way around on this one..
Link Posted: 1/27/2014 12:35:37 PM EDT
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Originally Posted By Bullet_:


Yup.

Besides, laundering charge is only a placeholder while they turn his life upside down find more charges to pile on with.
If nothing really good is found, child porn will appear on his computer.

Examples must be made.  Too many people are trying to copy BCs success.
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Originally Posted By Bullet_:
Originally Posted By LoBrau:
Not like they're going to let this kind of threat to the tax base slide.  Examples shall be made.


Yup.

Besides, laundering charge is only a placeholder while they turn his life upside down find more charges to pile on with.
If nothing really good is found, child porn will appear on his computer.

Examples must be made.  Too many people are trying to copy BCs success.



Everything in the above posts is correct.
Link Posted: 1/27/2014 12:39:07 PM EDT
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Originally Posted By Fat_McNasty:
ya the guy sold more then whats allowed by law. gave a discount and knew the guy was going to resell the BTC in the grey area..

He screwed the pooch all the way around on this one..
View Quote


How?

At the time, the government rules did not classify BC as money.
That was the brilliance of it all.
Only recently were the rules changed once BC and others took off.
Mostly for tax purposes.
Now they want to prosecute him for things that weren't illegal at the time.
Link Posted: 1/27/2014 12:40:22 PM EDT
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Originally Posted By AlvinYork:
gee, couldn't see that coming........
View Quote

Link Posted: 1/27/2014 12:42:06 PM EDT
And this surprises you in what sense?
This has been coming since the start.
Link Posted: 1/27/2014 12:42:11 PM EDT
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Originally Posted By EasTexan:

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Originally Posted By EasTexan:
Originally Posted By AlvinYork:
gee, couldn't see that coming........



Again, ..........
How do you launder something that wasn't classified as money at the  time?
Link Posted: 1/27/2014 12:49:04 PM EDT
[Last Edit: 1/27/2014 12:55:14 PM EDT by Fat_McNasty]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Bullet_:


How?

At the time, the government rules did not classify BC as money.
That was the brilliance of it all.
Only recently were the rules changed once BC and others took off.
Mostly for tax purposes.
Now they want to prosecute him for things that weren't illegal at the time.
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Originally Posted By Bullet_:
Originally Posted By Fat_McNasty:
ya the guy sold more then whats allowed by law. gave a discount and knew the guy was going to resell the BTC in the grey area..

He screwed the pooch all the way around on this one..


How?

At the time, the government rules did not classify BC as money.
That was the brilliance of it all.
Only recently were the rules changed once BC and others took off.
Mostly for tax purposes.
Now they want to prosecute him for things that weren't illegal at the time.


Anti money laundering Max'es have been in place long before BTC. He was running a US exchange so he had to go by the maxes. Whats dammin for him is they have e-mail conversations stating that he know what the max is and he will go over for this customer and even give him a discount because the purchase is so large. Also stated is the large amount of BTC will be used for a silk road exchange.




SHREM, who personally bought drugs on Silk Road, was fully aware that Silk Road was a drug-trafficking website, and through his communications with FAIELLA, SHREM also knew that FAIELLA was operating a Bitcoin exchange service for Silk Road users. Nevertheless, SHREM knowingly facilitated FAIELLA’s business with the Company in order to maintain FAIELLA’s business as a lucrative source of Company revenue. SHREM knowingly allowed FAIELLA to use the Company’s services to buy Bitcoins for his Silk Road customers; personally processed FAIELLA’s orders; gave FAIELLA discounts on his high-volume transactions; failed to file a single suspicious activity report with the United States Treasury Department about FAIELLA’s illicit activity, as he was otherwise required to do in his role as the Company’s Compliance Officer; and deliberately helped FAIELLA circumvent the Company’s AML restrictions, even though it was SHREM’s job to enforce them and even though the Company had registered with the Treasury Department as a money services business.
Source - http://www.justice.gov/usao/nys/pressreleases/January14/SchremFaiellaChargesPR.php
Link Posted: 1/27/2014 12:54:53 PM EDT
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Originally Posted By AlvinYork:
gee, couldn't see that coming........
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Originally Posted By AlvinYork:
gee, couldn't see that coming........


You saw it coming?  I'm guessing you and others think this is actually about Bitcoin.

The devil is in the details and I doubt few will actually read them.  This has less to do with Bitcoin and more to do with the fact that he was facilitating the exchange of cash to Bitcoins for use on the drug website, Silk Road.  It wouldn't really matter what medium of exchange he was converting the cash to from the governments perspective.  

The tricky part is that the government is claiming that his company had an obligation to collect customer information but that obligation all depends on the legal classification of a Bitcoin, which as far as I know, is still a huge grey area.  I would not be surprised if their case falls a part because Bitcoin has very little in the way of a legal status at the moment.

"Upon receiving orders for Bitcoins from Silk Road users," the government said, Faiella filled the orders through BitInstant, which "was designed to enable customers to exchange cash for Bitcoins anonymously, that is, without providing any personal identifying information, and it charged a fee for its service."

According to the government, that runs afoul of U.S. money laundering laws, which require payment companies like BitInstant to collect information about their customers, monitor their transactions, and report "suspicious" transactions to the government. Shrem failed to do this, the government says. Faiella is also facing charges.


My guess is that the big question will be whether these laws applied to Bitcoin transactions at the time or not.
Link Posted: 1/27/2014 1:01:20 PM EDT
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Fat_McNasty:


Anti money laundering Max'es have been in place long before BTC. He was running a US exchange so he had to go by the maxes. Whats dammin for him is they have e-mail conversations stating that he know what the max is and he will go over for this customer and even give him a discount because the purchase is so large. Also stated is the large amount of BTC will be used for a silk road exchange.



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Originally Posted By Fat_McNasty:
Originally Posted By Bullet_:
Originally Posted By Fat_McNasty:
ya the guy sold more then whats allowed by law. gave a discount and knew the guy was going to resell the BTC in the grey area..

He screwed the pooch all the way around on this one..


How?

At the time, the government rules did not classify BC as money.
That was the brilliance of it all.
Only recently were the rules changed once BC and others took off.
Mostly for tax purposes.
Now they want to prosecute him for things that weren't illegal at the time.


Anti money laundering Max'es have been in place long before BTC. He was running a US exchange so he had to go by the maxes. Whats dammin for him is they have e-mail conversations stating that he know what the max is and he will go over for this customer and even give him a discount because the purchase is so large. Also stated is the large amount of BTC will be used for a silk road exchange.




SHREM, who personally bought drugs on Silk Road, was fully aware that Silk Road was a drug-trafficking website, and through his communications with FAIELLA, SHREM also knew that FAIELLA was operating a Bitcoin exchange service for Silk Road users. Nevertheless, SHREM knowingly facilitated FAIELLA’s business with the Company in order to maintain FAIELLA’s business as a lucrative source of Company revenue. SHREM knowingly allowed FAIELLA to use the Company’s services to buy Bitcoins for his Silk Road customers; personally processed FAIELLA’s orders; gave FAIELLA discounts on his high-volume transactions; failed to file a single suspicious activity report with the United States Treasury Department about FAIELLA’s illicit activity, as he was otherwise required to do in his role as the Company’s Compliance Officer; and deliberately helped FAIELLA circumvent the Company’s AML restrictions, even though it was SHREM’s job to enforce them and even though the Company had registered with the Treasury Department as a money services business.
Source - http://www.justice.gov/usao/nys/pressreleases/January14/SchremFaiellaChargesPR.php

Can you be charged for laundering coffee cups if someone buys too many from you?

No?  Because it's not money?  Bitcoin wasn't either.
Link Posted: 1/27/2014 1:03:15 PM EDT
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Fat_McNasty:


Anti money laundering Max'es have been in place long before BTC. He was running a US exchange so he had to go by the maxes. Whats dammin for him is they have e-mail conversations stating that he know what the max is and he will go over for this customer and even give him a discount because the purchase is so large. Also stated is the large amount of BTC will be used for a silk road exchange.



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Originally Posted By Fat_McNasty:
Originally Posted By Bullet_:
Originally Posted By Fat_McNasty:
ya the guy sold more then whats allowed by law. gave a discount and knew the guy was going to resell the BTC in the grey area..

He screwed the pooch all the way around on this one..


How?

At the time, the government rules did not classify BC as money.
That was the brilliance of it all.
Only recently were the rules changed once BC and others took off.
Mostly for tax purposes.
Now they want to prosecute him for things that weren't illegal at the time.


Anti money laundering Max'es have been in place long before BTC. He was running a US exchange so he had to go by the maxes. Whats dammin for him is they have e-mail conversations stating that he know what the max is and he will go over for this customer and even give him a discount because the purchase is so large. Also stated is the large amount of BTC will be used for a silk road exchange.




SHREM, who personally bought drugs on Silk Road, was fully aware that Silk Road was a drug-trafficking website, and through his communications with FAIELLA, SHREM also knew that FAIELLA was operating a Bitcoin exchange service for Silk Road users. Nevertheless, SHREM knowingly facilitated FAIELLA’s business with the Company in order to maintain FAIELLA’s business as a lucrative source of Company revenue. SHREM knowingly allowed FAIELLA to use the Company’s services to buy Bitcoins for his Silk Road customers; personally processed FAIELLA’s orders; gave FAIELLA discounts on his high-volume transactions; failed to file a single suspicious activity report with the United States Treasury Department about FAIELLA’s illicit activity, as he was otherwise required to do in his role as the Company’s Compliance Officer; and deliberately helped FAIELLA circumvent the Company’s AML restrictions, even though it was SHREM’s job to enforce them and even though the Company had registered with the Treasury Department as a money services business.
Source - http://www.justice.gov/usao/nys/pressreleases/January14/SchremFaiellaChargesPR.php


you're missing the point.

BC wasn't classified as money at the time.

What's next? Prosecuting the WoW bankers because players benefit from the transactions?


Link Posted: 1/27/2014 1:03:22 PM EDT
Link Posted: 1/27/2014 1:05:46 PM EDT
[Last Edit: 1/27/2014 1:06:54 PM EDT by Koji]
They said Coinbase was good to go in the article.





This is just about BitInstant's actions before the FINRA release statements regarding the way it planned to handle bitcoins.





If the allegation are true, then Shrem should have known what he was getting into by selling bitcoins to Silk Road people, especially since he had securities and corporate attorneys examining the law.





This is really to be expected, since BitInstant has been having problems dealing with the regulatory environment for a while now.




The laws are written in such as way that one can pretty much assume bitcoin would be included under the scope of the regulations. When it comes to following the laws, it's always better to follow them anyway before you find out it's okay not to.
 
Link Posted: 1/27/2014 1:06:31 PM EDT
I'm not a big fan of bitcoin as an investment, but compare todays news to the following story.

HSBC wins OK of record $1.92 billion money-laundering settlement

HSBC gets caught laundering drug money for the Mexican cartels.

No one goes to jail.

The "bank", pays a fine of nearly 2 billion of it's shareholders dollars, and certain individuals at the bank have to forfeit a certain percentage of future bonuses.

Eric Holder himself admitted that the banking system is so corrupt it is impossible to prosecute without endangering the entire economy.



Maybe the bitcoin founders are shady, I don't know, but what is the fucking point? Fraud and corruption has penetrated every level of the government and banking, and TPTB have no ability or even desire to fight it.
Link Posted: 1/27/2014 1:07:31 PM EDT
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Originally Posted By LoBrau:
Not like they're going to let this kind of threat to the tax base slide.  Examples shall be made.
View Quote

You're goddamned right.
Link Posted: 1/27/2014 1:08:45 PM EDT
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By OCD-617:
I'm not a big fan of bitcoin as an investment, but compare todays news to the following story.

HSBC wins OK of record $1.92 billion money-laundering settlement

HSBC gets caught laundering drug money for the Mexican cartels.

No one goes to jail.

The "bank", pays a fine of nearly 2 billion of it's shareholders dollars, and certain individuals at the bank have to forfeit a certain percentage of future bonuses.

Eric Holder himself admitted that the banking system is so corrupt it is impossible to prosecute without endangering the entire economy.



Maybe the bitcoin founders are shady, I don't know, but what is the fucking point? Fraud and corruption has penetrated every level of the government and banking, and TPTB have no ability or even desire to fight it.
View Quote


The same reason gangsters shoot other gangsters. They're stepping on the other guy's turf.


Link Posted: 1/27/2014 1:09:39 PM EDT
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Originally Posted By underdogII:
Govt Hates Compition.
View Quote

And spell check.
Link Posted: 1/27/2014 1:21:59 PM EDT
[Last Edit: 1/27/2014 1:22:15 PM EDT by nobodyg17]
Bharara's statement suggests that Bitcoin exchange services that color within the lines of U.S. law — collecting information about their customers and reporting evidence of illegal transactions to the authorities — don't need to worry about running afoul of money laundering laws.
View Quote


Why would one want to use a crytpo  currency unless it's completely anonymous?  

I wish I had the cash flow to buy more silver and gold at their current prices.   At least the gov. has to work really hard to find out about that.
Link Posted: 1/27/2014 1:22:19 PM EDT
While dissimilar, I can't help but to think of Liberty Dollar when I read something like this happened.

Liberty Dollar
Link Posted: 1/27/2014 1:26:37 PM EDT
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By woodsie:


You saw it coming?  I'm guessing you and others think this is actually about Bitcoin.

The devil is in the details and I doubt few will actually read them.  This has less to do with Bitcoin and more to do with the fact that he was facilitating the exchange of cash to Bitcoins for use on the drug website, Silk Road.  It wouldn't really matter what medium of exchange he was converting the cash to from the governments perspective.  

The tricky part is that the government is claiming that his company had an obligation to collect customer information but that obligation all depends on the legal classification of a Bitcoin, which as far as I know, is still a huge grey area.  I would not be surprised if their case falls a part because Bitcoin has very little in the way of a legal status at the moment.



My guess is that the big question will be whether these laws applied to Bitcoin transactions at the time or not.
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Originally Posted By woodsie:
Originally Posted By AlvinYork:
gee, couldn't see that coming........


You saw it coming?  I'm guessing you and others think this is actually about Bitcoin.

The devil is in the details and I doubt few will actually read them.  This has less to do with Bitcoin and more to do with the fact that he was facilitating the exchange of cash to Bitcoins for use on the drug website, Silk Road.  It wouldn't really matter what medium of exchange he was converting the cash to from the governments perspective.  

The tricky part is that the government is claiming that his company had an obligation to collect customer information but that obligation all depends on the legal classification of a Bitcoin, which as far as I know, is still a huge grey area.  I would not be surprised if their case falls a part because Bitcoin has very little in the way of a legal status at the moment.

"Upon receiving orders for Bitcoins from Silk Road users," the government said, Faiella filled the orders through BitInstant, which "was designed to enable customers to exchange cash for Bitcoins anonymously, that is, without providing any personal identifying information, and it charged a fee for its service."

According to the government, that runs afoul of U.S. money laundering laws, which require payment companies like BitInstant to collect information about their customers, monitor their transactions, and report "suspicious" transactions to the government. Shrem failed to do this, the government says. Faiella is also facing charges.


My guess is that the big question will be whether these laws applied to Bitcoin transactions at the time or not.

If not this, then something else.......government hates it when others try to sneak into their monopoly.......government is very jealous of it's control over everything. The government will find that the laws apply to BitCoin no matter what.
Link Posted: 1/27/2014 1:30:46 PM EDT

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Originally Posted By nobodyg17:




Why would one want to use a crytpo  currency unless it's completely anonymous?  



I wish I had the cash flow to buy more silver and gold at their current prices.   At least the gov. has to work really hard to find out about that.
View Quote


Well for one because it's nearly instantaneous. Another is because of the lack of (or severely reduced) fees.



Let's say you are in some far away state, and I shop at your online website. I add a bunch of stuff to my cart and hit checkout. Instead of having to deal with the dog that is paypal or messing with a credit card, I can just send bitcoins to your Coinbase account (or other account) as payment. The transaction is irreversible once I press the send button, so you know you've been paid and there will be no charge backs. Furthermore, it takes place within seconds and is almost instantaneous, so you know you've got your money within about 30 seconds or so. Finally, the fees that you would have to pay for accepting bitcoin as a seller would be up to (but not more than) 1%. This is a screaming deal compared to the 3-5% charged by Paypal and major credit card processors.



So, there's no worrying about charge-backs on the seller's end. The buyer doesn't have to fool around with credit if they don't want to. The payment is almost instant, which means no waiting around for a couple of days for a transaction to clear through one's bank account. And finally the reduced fees are much lower than any other payment method (except cash of course).



You can send hundreds of millions of dollars from the US to anywhere in the world almost instantly, and none of it has go to through the banking system, which takes days to clear.



That's why I want to use it.
 
Link Posted: 1/27/2014 1:35:20 PM EDT
[Last Edit: 1/27/2014 1:36:15 PM EDT by woodsie]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By nobodyg17:


Why would one want to use a crytpo  currency unless it's completely anonymous?  

I wish I had the cash flow to buy more silver and gold at their current prices.   At least the gov. has to work really hard to find out about that.
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Originally Posted By nobodyg17:
Bharara's statement suggests that Bitcoin exchange services that color within the lines of U.S. law — collecting information about their customers and reporting evidence of illegal transactions to the authorities — don't need to worry about running afoul of money laundering laws.


Why would one want to use a crytpo  currency unless it's completely anonymous?  

I wish I had the cash flow to buy more silver and gold at their current prices.   At least the gov. has to work really hard to find out about that.


Low friction.  Bitcoins are very well suited for micro-transactions, hence the reason that Zynga is getting into it for casual gaming.  They also don't show up on credit card statements which is why the Porn industry is getting into them as well.

While nothing is perfect, the paper trail of Bitcoins can be obfuscated significantly in the same way that FTF purchases of firearms obfuscate the paper trail beyond the point of initial purchase at a gun store.  The only transaction which can be confidently identified to you is the initial USD to BTC purchase.  Once those Bitcoins are moved off the exchange and on to paper or digital wallets, they are basically out in the wilderness with very little way of proving who actually owns them.
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