Bitcoin Forum

CEO OF BITCOIN EXCHANGE ARRESTED

The CEO of BitInstant, a Bitcoin exchange, has been arrested at JFK airport and charged with money laundering.

Charlie Shrem, along with a co-conspirator, is accused of selling over $1 million in Bitcoin to Silk Road users, who would then use them to buy drugs and other illicit items.

"Hiding behind their computers, both defendants are charged with knowingly contributing to and facilitating anonymous drug sales, earning substantial profits along the way," DEA agent James Hunt said in a release.

Shrem is a vice chairman at the Bitcoin Foundation. He is listed as a speaker at a Bitcoin conference in Miami that ended Sunday.

Shrem is believed to own a substantial amount of Bitcoin.

Read more: http://www.businessinsider.com/report-ceo-of-major-bitcoin-exchange-arrested-2014-1#ixzz2rcQNGOtj

Having drugs is NOT the problem. Even using drugs is not the problem. The problem is harming other people or damaging their property.

Laws like drug laws are in place to give authorities excuses to attack people legally. Drug laws don't stop anybody. Rather, they take away peoples' rights to use both drugs and Bitcoin.

If the laws only had to do with judging harm and damage done by the accused, we would be free, and the real bad guys would be behind bars.

As it is, it appears that lawmakers and law enforcement are the real criminals by arresting and persecuting people who haven't harmed anyone.

:)

That just does not make sense to me. What makes bitcoin so special it deserves arrests? Why not a bank cashing a persons check and then that person buys drugs with the fiat? Or some type of comparison like that?

If that is the case, then are they going to arrest everyone that has $100 bills with coke residue on them (which is more than 50% of bills in circulation) if i'm not mistaken

I dont condone any of this but there's a double standard.  Not a single person at HSBC was arrested for laundering mexican drug cartel money.  Why is there this double standard?

I was thinking the same thing. Maybe there was an agreement to send and receive (i.e. launder) coins. ???

If you read the press release by the DEA, it says they have emails between shrem and BTCKing and that BitInstant KNEW that BTCKing was acting as a conduit for people to buy drugs on SilkRoad.

I highly doubt Jamie Dimon ever emails some customer that says "hey I need to withdraw some of this drug money from a chase branch, ok?"

Wonder how they got all those emails? 

;)

Now its the time for USA agents to revenge,

All Bitcoin Business is in fact less/more relating to SilkRoad, SilkRoad makes Bitcoin's sucess today

It's just about the timing to investigate this fact and get a reason to destroy Bitcoin, then arrest Mtgox/TradeHill/Bitinstant etc..

well, thats big news.... I wonder what's next...

That wasn't expected "at least for me" though Everyone knew BitInstant wasn't coming back at least now after there long shutdown I wasn't expecting an arrest for it's owner since it's already closed.

Silk road was a farce from the very beginning. Who would ever join a website whose first online advertisement is this:

http://antilop.cc/sr/img/2011_01_23_silkroad420.wordpress.com.png

What a horrible idea... I really doubt this was started by a guy in Texas.

Next stop all the illegal gambling sites and unregistered securities issuers.........

HOLY FUCKIN' SHIT!!!


You're not goin' to believe who the co-conspirator is. I know!

Wouldn't surprise me if there was some dirty tricks involved like there was with Silk Road.

I have to admit I panicked at first, but when I read the criminal complaint from the DoJ I saw that they are alleging that Shrem KNEW what Faiella was doing.

if the feds come after you for unknowingly selling coins to someone who then uses them for something illegal, that is really, really bad for us. If they come after you for knowingly helping someone break the law, well, that should be expected.

The big problem is that the Bitcoin Foundation is about to get a HUGE black eye from this.

Yep there was obviously some shady dealings going on there, that Shrem had a responsibility to report and this is what they will nail him on.

Also it's quite possible they will use cases like this to lay the groundwork so that if you ignore regulations or exempt people from them (like Shrem is accused of doing with Faeilla) that you will be assumed to be participating with illicit activity as they follow the breadcrumbs back to your exchange. In this case it looks like they have proof that he knew.

Is it pirateat40? Please tell me it is pirateat40!

Did I say the c-c was male? <hint>

Governments and banks should be closed and owners arrested too.

FIAT money is getting used for illegal traffics.

wow. Charlie  70 million dollar finger chopped off?

I was wrong! I was thinking it was his lady friend.

http://www.marketwatch.com/story/ceo-of-winklevoss-backed-bitcoin-company-arrested-2014-01-27?link=MW_latest_news

THIS.

Because the banksters own Congress.  It's completely fair and neutral treatment.  All you have to do to get the same treatment is buy a few Senators.  There are even pimps called lobbyists who can sell you a few.

FWIW, they aren't saying he's in trouble for using bitcoin. They are saying he's in trouble for KNOWINGLY facilitating those trades.

If you knowingly facilitate the commission of a crime you have to expect that you risk facing consequences as a result...

The key to this is that he allegedly knew that the coins were being used for illegal activities... It makes no difference if it's Bitcoins or Dollars, you can't knowingly break the law without risking your freedom.

It's no big surprise.

This news is actually good.

IT seems this is just an extension of the SR investigation. And we all agree that SR was  detrimental to btc at this stage. This has nothing to do with the actual btc platform. In fact, in the statement released, there is more evidence that bitcoin as an entity will be left alone. :

"Truly innovative business models don't need to resort to old-fashioned law-breaking, and when Bitcoins, like any traditional currency, are laundered and used to fuel criminal activity, law enforcement has no choice but to act."

http://www.marketwatch.com/story/ceo-of-winklevoss-backed-bitcoin-company-arrested-2014-01-27?link=MW_latest_news

all in all, its a fascinating development, but in a blazay kind of way.

http://webcache.googleusercontent.com/search?q=cache:7VA7On91CNsJ:antilop.cc/sr/vendors/16af931d32.htm+&cd=26&hl=en&ct=clnk&gl=us


And don't think for one fuckin' minut they don't know who the King's VIPs are.

That's why all the voters in America are criminals. They constantly vote for crime-lords in Government offices, who don't obey their Oath of Office to uphold the Constitution.

We're getting our freedom taken away as a result. Things like Bitcoin happen to be extending our freedoms a bit, and for a time.

:)

Why would the Winklevosses back a guy like Charlie Shrem?   A simple google search brings up articles that are very questionable and certainly disqualify him from ever being taken seriously as the leader of any business.   Love the one that states "I will never hire someone I have not gotten drunk or stoned with".  A little background check before writing a venture capital check?

yea, that is a weird one...

US government own DPR stash and now own the bitinstant/foundation hoard. i guess their working their way down the list or people with most bitcoins.

Interesting theory but did Shrem have anything to do with the Foundation's Bitcoins?

So much for Bitcoin as money loundering tool. We are talking about a million which is almost nothing and you still get traced.

I wonder if they've invested any time or resources trying to track down Satoshi?

the complaint filed referenced 1mill+

That's the best part. It just proves that the Winkleiidouches have about as much business acumen as a bowl of noodles. They got their money from suing someone with actual business savvy and determination. I hope they "invest" away their entire settlement. lol

Maybe the feds are satoshi lol. /conspiracy theory.

Yeah this is just down to silkroad though, so he was bound for this fait.

I wonder if any of this is true?  http://www.vocativ.com/12-2013/night-bitcoin-millionaire-proud-stoner-charlie-shrem/

http://www.vocativ.com/12-2013/night-bitcoin-millionaire-proud-stoner-charlie-shrem/
What kind of moron would think this is GOOD PR for bitcoin, the foundation, bitinstant or even EVR (his bar)?

Charlie appears to be the assistant prosecutor in the case against himself.
I wonder if Yifu is getting nervous about now.   Since he was posing in all those mags bragging about how smart and wealthy he is, I am sure he reported all those profits and paid the NYC 54% tax rate that the government deserves correct?

I'll bet that the song which Shrem can sing will give a fair number of folks the shivers.  This in particular since pretty much any TCP/IP packet than anyone has sent/received since the first block was mined can be pulled back out of the ether.  And can be used in a court of law if the stream can be sufficiently laundered.

Still less than what cartels or other big criminal organizations needs to launder every hour.

This will not effect bitcoin in the long term.

Personal opinions on the war on drugs aside, he left himself open for this. Allegedly he knowingly facilitated transactions in an effort to launder money, regardless of the currency. During court the evidence will show whether this is a true allegation or just a smear campaign.

There is no surprise that the US government would aim to arrest those who helped facilitate the silk road, none.

As far as the double standard with banking goes, it IS bullshit, but bears no weight on this specific case. I'm sure HSBC spent a lot of time, money and effort to cover their ass, and Shrem will probably cooperate and facilitate a further investigation and get out with hefty fines, a very brief all expensive paid vacation to upstate new york, and a smeared reputation.

But the bright side, if the government holds a decent amount of bitcoin, will they not protect their investment? Maybe that's just the optimist in me.

http://www.forbes.com/sites/andygreenberg/2014/01/27/winklevoss-funded-bitcoin-startup-ceo-arrested-in-silk-road-investigation/


Hate to say it, but I believe this probe is much, much deeper, and expect more arrests by spring, throwing an iconic enterprise into a tailspin.

http://208.93.164.190/images/content/edf55a8a-62c9-44e5-8.jpg

a mill+ ranges from 1mil to 1000000000000~ mill

Just like with that silk road dude. Stupidity did him in. Sorry, Charlie.

+1


on a side note, Antonopoulos will be discussing this and BTC in general on joe rogan today, 3 pm pacific:
http://www.ustream.tv/joerogan

Charlie was no fool, he's just to young!

I agree, Americans have been made criminals by rampant legislation. You have a choice to break the law but you can't expect to be safe in doing it.

I don't believe the votes in America mean anything; who remembers the Florida recount? How far off was the count?

We made our bed and now we sleep in it. I hope this generation and the next can bring us back to the Constitution.

Bitcoiners should take lessons from this guy on how to weave in and out of a crowd conducting bitcoin transactions without being noticed: https://www.youtube.com/watch?v=-FFe_42TpiY&src_vid=qFHbXSnNkXU&feature=iv&annotation_id=annotation_3965703473

Nice tutu, Phinn.

I don't think so.

It's easy to misunderstand what happened with HSBC.

The majority of what HSBC was accused of was about not doing enough to detect and block Mexican drug cartels laundering money. Note "not doing enough".

Shrem is accused of something entirely different - not just doing an insufficient amount of work, but knowingly co-operating with someone he knew was a Silk Road dealer explicitly to help him launder money. It's the "knowingly" part that makes the huge difference.

The US DoJ did not seem to have large piles of emails from the head of compliance at HSBC showing him buying drugs and helping known dealers to evade his own controls. With BitInstant they do.

It's really no wonder Bitcoin businesses can't get bank accounts, when guys like Shrem were putting on a respectable face and doing that kind of thing behind the scenes. Silk Road and those involved with it are by far the most damaging thing that could ever have happened to Bitcoin, especially so early on.

The only problem with youth is the arrogance of invincibility. Old and young alike can be intelligent, well educated and experienced in their field of study. Age brings wisdom only because you begin to understand your limitations and that their may be someone out there in the ether that knows more than you do.

I would like to nominate Charlie for the ambassador of Bitcoin when get gets out.

That's so 2011.  Preet has been there and done that.  Google FullTiltPoker and Pokerstars.

I'm with you, Mike.  The evidence that they claim to have indicates that Charlie knew what he was doing and allowed his own personal pro-drug bias to influence his business decisions. 

The two main sources of my income back in the day, along with being a poker whore chasing deposit bonuses on the various other sites. After its demise, I had to get my hands dirty once again to earn a living, eventually getting back into moving barn wood, of which I truly love, but now conflicts with Bitcoin while back online. I used to live at Sam's Town in Tunica. virtually free with all the food I could eat, for two whole years while playing and propping poker, but tired of that grind on the felt.

Apologies for the aside.

~TMIBTCITW

Hopefully Theymos, BFL, TradeFortress, and the members of the Foundation who are involved with them will be next.

I like to play devils advocate but that seems a little extreme. BFL and TradeFortress scammer would be nice but TBF and the admin of the main forum would probably hurt Bitcoin a little. You do understand that TBF members are most of the businesses that make Bitcoin what it is today, right?

I'm sure he will barter his way out! He will prob just release names and pay his way through the case

It is actually quite unlikely that there does not exist evicence of wrongdoing at many levels given the scale of HSBC's malfeascence (though I'll agree that it may not have reached their chief complience officer mainly because he/she is likely a careful and clued in person else they would not have gotten the job.)

It is also quite likely that the US DoJ does not have large piles of it, but that is probably mostly because they don't want it.  An artifact of the lobbying money spent at various levels of our government.

The trouble with secret evidence and 'parallel construction' is that it makes decisions and actions of the authorities non-believable to the clued in segment of the public.  When the likes of Shrem get busted and his counterparts at HSBC simply get an even bigger bonus at the end of the year, all of the otherwise valuable work in trying legitimately fight crime is severely depreciated.

The issue boils down to a few factors and 'transparancy' is one of the most important of these.


Maybe, and maybe not.  It could be that Bitcoin has actually been surprisingly unmolested so far in part because there are so many mice who seem to have almost a compulsion to stick their heads into the mousetrap.  As they rapidly exit the ecosystem, that utility might vanish.

Yes, the current Foundation should dissolve and the legitimate players can start a new one without being saddled by the historic acceptance of criminals that you see in today's Foundation.  This forum should be abandoned by all legitimate players before the admin get arrested for running an unregistered business, tax evasion, money laundering, conspiracy to commit fraud, etc.  That way the legitimate players can move forwarded and not be saddled by some of the idiots who have been permitted to run wild and cause all this damage.  I would include Alydian/Coinlab in that if you read their latest bankruptcy case.  The judge is accusing them of all sorts of things.  

My money is on Eric Vorhees

This is absolutely by design; the timing is everything.

It's no more than a cut but as a community we're still bleeding from it.

Like I've read somewhere else. We are only at the beginning of the arrests of people associated with SR. There were several big exchangers on Sr, like sugarmama, I bet it wont be too long until we hear about her. Im just surprised that someone so high up in the bitcoin community was involved..

Of course I mean the Bitcoin ones. I'm well aware they dealt with the 'real' ones years ago.

I'm not sure, but they would come out better if they were running some sort of lottery scheme for several years with seniors as their core customer base, for the sentence for such is only a $100 fine and time served while sitting till the case is heard, at least that's what I once read somewhere.

This would actually be nothing more than everyday "he wanted too much, broke the law and now he's payng for that". But the thing that he and many more like him were saying that "bitcoin is different and people invoilved in it not corrupt" (oposite to bankers, banks, goverments and everything else) will probably change life for a lot of people who believed in those lies.

Money is money no matter in what form and evil is lurking everywhere.

Wow. What a load of shit. This is definitely one nail in the coffin for BTC. Enter the next era of crypto - Anoncoin, Stablecoin and Zerocoin. A completely anonymous coin is needed. This puts anyone running a bitcoin related business at risk because of the origin of the coin spent. You can think what you want but this is the beginning of the end.

Goldman Sachs and top US banks launder more money than any cartel would even hope to and they go after a brand new industry.. Shit the US is the largest importer of illegal drugs and guns. The US military in Afghanistan is the largest producer/exporter of opium in the world.

Fast n Furious
Freeway Rick Ross

http://www.lookintoit.org/Troops-Protect-Government-Drug-Dealing.html
http://www.businessinsider.com/the-us-government-and-the-sinaloa-cartel-2014-1
http://en.wikipedia.org/wiki/CIA_and_Contras_cocaine_trafficking_in_the_US
http://www.thenewamerican.com/usnews/crime/item/12247-cia-manages-drug-trade-mexican-official-says

They move slowly, but they do prosecute people and they do not forget.   Anyone who does not believe that should read up on CMKM Diamond Mining stock.   This fraud took place in 2007 and they are still arresting people for their role in it.   They just arrested another guy last week.

Why?

A fair fraction of the people 'higher up' got in early.  There are a number of reasons why someone might have taken an early interest, and many of them would be associated with having a genuine need for a solution such as Bitcoin...or such as Bitcoin was 'marketed' at least.  Many of these are associated with something considered 'bad' by large segments of society.

I actually consider a well off early adopter who is 'squeaky clean' to be something of a novelty though I'm sure that many do exist.  Bitcoin is a interesting technical and social phenomenon in it's own right.  But then so are many other developments which could compete for the attention of persons with a natural interest in such things.

 edit - sp

So when are they going to arrest the rest of us?  By the logic of the feds is not every bitcoin user knowingly contributing to sites like silk road and others that deal with illegal drugs.  If you run a miner you help process transactions that allows this to happen.  Who is next to fall,  pool operators, solo miners?

Didn't a few high profile companies start accepting bitcoin?  Overstock.com for one.  We should arrest their CEO too since they are building demand for bitcoin.

Also there have been a few politicians that have accepted bitcoin donations.  There is our link between politicians and illegal drugs.  Can we arrest congress people now?

Time for the song meme of the day: https://www.youtube.com/watch?v=chcSfTLUQ2s

Mike.  I think you make some good points and you are correct in saying the the "majority" of what HSBC did was not doing enough.  I agree that what Shrem appears to have done is terrible and one could argue that he should be prosecuted.  However I dont think its fair to say what he did is worse than HSBC.  There were other examples of inappropriate conduct in the Mexican Drug Cartel case and the Iranian Transactions case, whcih go beyond not doing enough to detect money laundering.  For example in the opening statement of the Senate investigation hearing into the issue, the Chairman of the Committee, Carl Levin said:
See Page 4 of the following document - http://www.hsgac.senate.gov/download/?id=8b67b18b-c21d-453a-9ccc-56206a70c908

I think what really frustrates some people at the whole affair is that the Assistant Attorney General basically said that HSBC were not prosecuted because otherwise "the entire banking system would have been destabilized".
http://www.rollingstone.com/politics/news/gangster-bankers-too-big-to-jail-20130214

For further details on the matter, please read the Senate's 339 page report.
http://www.hsgac.senate.gov/download/?id=2a76c00f-7c3a-44c8-902e-3d9b5dbd0083

That actually would not surprise me (though the justification would.)  Byrne is despised by Wall Street, their whores in the financial media, and regulators (largely also revolving-door whores) for not letting Overstock go tits-up like he was supposed to when they got naked-shorted to the max.

And when the big fish are fried, they can break in teh baby feds by letting them grep our Securities subforum :)

+1

whichever side of the fence you sit on the issue of drugs matters not. the issue is the hypocrisy of it all.

The Iran issue with HSBC is even more complicated.

HSBC is an international bank. At the time of those events, sanctions against Iran were not international. In particular, the UK did not have US style sanctions.

So what happens when HSBC in London wants to send money to Iran? What if that transaction ends up being routed via a US part of the "same" company? Whose law takes precedence?

The obvious and natural answer is that if the customer is in the UK, then UK law takes precedence (you can replace UK for a lot of other countries). However the US government saw it differently. It thought US law should take precedence, for transactions that for various reasons were being routed via US processing or switching centers.

The "knowing evasion" aspect comes from the fact that the UK parts needed to execute legal transactions for their customers, but the Great Firewall of America would block them. So they worked around it. No laws in the UK broken as there were no sanctions at that time. In the USA, it was seen as money laundering.

The general way the US government is making its law international law via manipulation of the banking system leaves me deeply unhappy. Yes, it's nonsense that banks have become too big to enforce laws upon and nobody will argue that's a good thing. But in the case of HSBC specifically, the laws that were being enforced look more and more questionable the deeper you go.

For drug prohibition the issues are different but just as complicated.

actually i think that what they tryin to do is to link the word :"bitcoin" to the word "crime" in the non-user peples mind (wich is approximativly 98% of the world) so they will think twice about it before get in to it.they want to stop the progression.last time i as talkin about bitcoin with a LAWYER ,i mean these guys are supposed to be smart,and the first word he said is : crime.so yeah us gov is doin a pretty good job

As I finance professional, I find this assessment to be completely spot on.

I'm not necessarily 'hoping' for anything in this regard, but I suspect there's much more to the story than we're aware of (both before, and as information is probably still forthcoming), and it likely involves more people associated with the Bitcoin Foundation.

And good riddance to anything directly related to Silk Road.

This is very shocking developmental

I guess that explains the big dip in prices today. Ah well.

So can they prove that he knowingly sold Bitcoin to users who then went to directly buy drugs from Silk Road with them?

Should be interesting to see what happens. I personally never used Silk Road (got into BTC afterwards) and though I can admire it's rise from nothingness, it still sucks that it's tarnishing Bitcoin's image so much.

I am not saying I agree with the US regulations with respect to Iran and I think your characterization of the events is broadly correct.

However HSBC affliates deceptively and knowingly "stripped out" references to Iran on transactions which went through its US affiliate HBUS; HSBC and HBUS management knew about this.  This was to conceal information from US authorities otherwise these transactions would have been blocked by the Office of Foreign Assets Control filter.  As you say, these transactions did typically relate to instances where both the sender and recipient were outside of the US and therefore not necessarily bound by the sanctions.  HSBC should therefore have not processed these transactions through the US affiliate which is regulated by the US Treasury (and the Federal Reserve during some of the period in question) and subject to US law and OFAC filters.  HBUS management were therefore in breach of US law and could have been prosecuted.  In 2001 HBUS’s head of compliance warned that these transactions could have “involved wilful disregard or evasion” but the HSBC group chairman intervened to continue the information stripping.

I admit the situation was not perfect, but HSBC still deliberately stripped information out of transactions to be deceptive to authorities, although I understand the argument that this may be morally or even legally justified.

Would you mind dumbing dumb your explanation? This is very interesting but I don't understand completely.

Dose banksters knew what dey was doin'!

and now bitcoin crash!|

I'm in shock, Bitstamp looks for me the USA exchange, if it goes down the btc will also go down, we just saw it in the market, but now the price will fall to 850 -800 in gox.  So mad

lol. relax, bitcoin is bigger than 1 man/exchange

Bitstamp is not an american exchange.

This is a complete red herring. This doesn't really change anything... why are people freaking?

edit: I'd think that this is much more deserving of our focus: http://en.ria.ru/business/20140127/186966541/Russias-Central-Bank-Bitcoin-Users-Can-Face-Jail-Time.html

HSBC negotiated from a position of strength that they'd cultivated.  In their case, a credible threat to burn down the house.

Bitcoin should take a lesson from HSBC about what can be achieved from what position, IMO.

Nothing in any of the Bitcoin Foundations roadmap seems to indicate that they have any intention of taking either the high road morally or hardening the solution against the types of attacks that can pose a threat.  They seem to wish only to lay prostrate as quickly as possible and hope that they are allowed a quite corner in the room to exist.  I'll bet (and literally am) that this strategy will result in a lethal bitch-slap.

This is what I think. If the guy sent an email to somebody like "Yo, you sell drugs online and I'll launder the coins out into fiat for you" then the arrest should be expected. No way anybody should be surprised about that. If the guy happened, due to no fault of his own, had a criminal decide to use his service, and he was never aware of this action, and then he was arrested... that would be unexpected.

Pretty sure undercover agent Mike Hearn was involved in the bust. They sent him to infiltrate BF and start the smear campaign.

I think you mean "BitInstant" not "BitSTAMP".

So many "BITS".

He should step down from the foundation ASAP.

The most important aspect to the story is how they managed to read his personal emails and how they can prove that the emails they have are legitimate. They could easily write up some bogus emails and claim that he sent them, they need to be able to prove the emails were written by him.

They just choose a court and a judge that WILL allow these emails.
Maybe they bring in fake or real computer forensic experts that can prove or do review and decide if these emails are legit.

You can be 100% sure even if these emails are fake, they will be used.

More victimless "criminals" having the boot stamping on their face forever. Just a matter of time before every single localbitcoins seller is prosecuted for not harming anyone, because "economic liberty must be destroyed"!

This is all theater to scare people.

Shrem is in the good-ole-boy-secret-handshake-club himself, and the charges are completely ridiculous.

Not following FINCEN "guidelines" is not a crime, as there is no law. Even if there was a law, there is no jurisdiction.

Hopefully, some stupid people will sell and give me some cheap buy prices.

The "suspicious" in "Failure to report suspicious activity" is now defined as "using any currency whatsoever", so now everyone is a criminal. YAY! Boot\Face.

This. Gavin, please have the leaders of The Bitcoin Foundation contact him immediately and ask for his resignation. He must resign guilty or not.

The entire Bitcoin Foundation should resign, before they are inevitably charged with "money laundering" and other anti-economic liberty victimless non-crimes, by the totalitarians.

Malicious prosecution of pro-liberty board members, et al. is not at all unprecedented in the U.S. BF are sitting ducks, and the rest us are to a lesser degree.

Actually, guidelines aren't laws, which is why they're called..."GUIDELINES", which is why there can be no real charges. It's either total bullshit theater to scare people (my guess), or the feds are just doing whatever they want with no respect for even their own laws (also plausible).

Jurisdiction has several elements. Merely being in a geographic area doesn't grant jurisdiction.

Prosecutor can kindly go burn in Hell. Speechless. This is the most blatant anti-Bitcoin rights violation I've seen yet, way worse than the thug letters sent to Caldwell.

Shrem shouldn't step down from anything over this. The Foundation should be supporting him, not throwing him under the bus because they think they can influence the BTC price a couple points higher. Have some fucking integrity.

WHAT?
Did you read the complaint?   
Caldwell did not do anything wrong nor illegal.  How do you compare the two?
Shrem was all over magazines bragging about how rich he was and how much he loves weed and likely (since treasury is involved) NOT paying any taxes.   Then they have emails from him that prove he knew someone was laundering drug money through his company.   More than one law broken here.   And he had the gall to plaster his face everywhere bragging about his wealth -- I fail to see how you think anyone is to blame for this other than shrem.   It is fine to brag and promote yourself but if you are bragging in the papers about how much money you make, you better be paying your taxes.

DEPARTMENT OF COMMON LAW AND COMMON SENSE HAS ISSUED NEW GOVERNMENT GUIDELINES


reuters - Today, John White, Director of the DCLCS issued a statement that people who use the taxation of innocent people to fund their livelihoods must register as scumbags to adhere to new regulations. Scumbags who, in addition to using the extorted funds, then use them to attack people and kidnap people, must register as giant fuckwads by shooting themselves in the face.


***there, that's a "guideline"**

Shrem tried to play ball with the powers that be. He was BitInstant's Compliance Officer, in charge of ensuring its (the company's) compliance with anti-money laundering laws. Then he got caught cheating at their game.

Have you read the complaint?

http://www.justice.gov/usao/nys/pressreleases/January14/SchremFaiellaChargesPR/Faiella,%20Robert%20M.%20and%20Charlie%20Shrem%20Complaint.pdf

If you are going to play ball in the US, don't try to beat them at their own game...

Disclaimer: My personal opinion is that drugs should be decriminalized and money laundering is a fake crime, but my opinion doesn't matter when I'm living in the USA!

I'm not disputing that those are the charges. I'm saying that they are total bullshit and have no legal merit. Them stealing peoples money and calling themselves "prosecutors" doesn't change what's already in writing. They're making it up as they go along.

"knowingly contributing to and facilitating anonymous drug sales"

Isn't that's what everyone running TOR nodes doing too?

You're clearly one of the aforementioned scumbags. Please kill yourself and welcome to my ignore-land.

You should try actually reading the article, your analogy would only be valid if all he did was run the exchange, apparently he did more than that.

This is bad making people think of bitcoin are bad...

I think this is the media spreading FUD about cryptocurrency. What about the $1 TRILLION plus that the Federal Reserve laundered? I don't see that everywhere.

What gets me is you'd think they'd be trying harder.

Probably best to wait and see who he rats out.  Maybe some other house-cleaning will be in order and it could be taken care of in a batch.

This looks like a warning from the gorv

Does Shrem need to be dumped by the Bitcoin Foundation or do a lot of respectable bitcoin users/entrepreneurs need to DUMP the foundation (and constantly clarify that the foundation does NOT represent bitcoin)?
I do not think there is just one bad representative for bitcoin in a ranking position at this "foundation".

Fear the gorv!! The gorv will take your bitcoins and throw you in a rape cage!

Sorry to bring up Mike -- that was the last federal government load of crap which got a sudden pissed off reaction from me when I learned about it, so I immediately connected the two, emotionally.

With regards to natural law, Shrem's committed exactly zero crimes. I'm very irritated that he may be facing years in federal prison over this. I'm pissed off when the first responses I read (after already being pissed off from reading the news) is that Shrem should resign for peoples' personal gain, because they think Bitcoin's going to be "tainted" by someone disregarding immoral laws when he's been making statements like this for so long. The insincere Winklevoss statement is probably the worst, like spitting on his face. (ETA: Had the stomach to actually read their statement, and it's nothing like the sensational condemnation in the press.) The questions over whether or not they did any background checks is totally valid... it's not like anyone who's read one damn sentence spoken by the guy thought Shrem was a freakin' Boy Scout and part-time pastor.

As I was taught in my law classes, all LEOs in the US are bureaucrats, with the ability and duty to actively interpret laws and determine whether or not certain crimes are worth enforcing, which is why any sane police officer isn't going to drive around fining/arresting jay-walkers, pot-smokers, and people with broken-down cars.

It's just a game, I guess. I guess this is my Super Bowl and the whatever-the-fucks just lost, so they're going to prison. Tough luck, bros - good luck with keeping your asshole covered.

ETA: Calm, now. Gets under my skin... I've had >$2m equiv scammed or stolen from me in the past few years, and I know others who've lost a lot more. I don't absolve myself of blame there, but I'm quite poor and burdened because of it. A good chunk of the relatively low income I make goes right to my "involuntary lenders." I've talked to police and I've filed federal complaints, but I don't see a penny in restitution. The LEOs don't even talk back to me. Charlie goes out and buys freakin' weed brownies and helps a pothead launder money, and all the sudden, $millions in net annual productivity goes to prison because someone may've been scamming the government out of a few hundred $k.

What about the Gorn? http://www.youtube.com/watch?v=4SK0cUNMnMM

this would diminish the presumption of innocence. A cardinal feature of rule of law/justice.

chargeing someone is not a conviction

I'll chime in...


Guilty or not he needs to step aside for the better of the community.  If/when this is resolved and if he is found not guilty then he can reapply for nomination.  Regardless, the us government is doing us all a favor.

 They are:

1. Removing all the illegal perpetrators who give bitcoin a bad name

2. Proving they can still hunt down money launders who use bitcoin

3. forcing the government to rule on Bitcoins status as a currency for legal reasons

4. Forcing agencies (like the IRS) to now have to make determinations on bitcoin's status.


Everyday that goes by gets more interesting........

No he can't. Any harm is already done and diminishing as we speak. Next week we will be on to the next story.

I do not think we are in disagreement, it is just the facts of life.   If you want to participate in the "game" and in the USA, there are rules.   Whether we think the laws are just is irrelevant as they will be enforced with power.   Do I think it is fair that google pays no US taxes and the government just pretends that it is a fact that "all googles revenue happens in Ireland, then Denmark then the Dutch Antilles and NOTHING is produced in the USA"?   NO.   Can I do anything about it?  NO.   Should I assume the same government would not put me in prison for using the same logic as google?  NO.
I could care less if Shrem smoked pot.   I could care less if Shrem avoided taxes.   I could care less that DPR started a site that allowed people to avoid cruising the streets for drugs.   None of these things affect my life nor my pursuit of happiness (actually it could be argued that silk road made my family safer since it took the drugs off the streets and likely lowered crime).
But I am not surprised the government cared and took action.    In the game of Whack a Mole that the feds play, Shrem sure kept popping his head up a lot.

For the same reason people invest in Apple. A few minutes on Internet research and I found this: http://www.todayifoundout.com/index.php/2012/10/steve-jobs-first-business-was-selling-blue-boxes-that-allowed-users-to-get-free-phone-service-illegally/ (http://www.todayifoundout.com/index.php/2012/10/steve-jobs-first-business-was-selling-blue-boxes-that-allowed-users-to-get-free-phone-service-illegally/)

With the following quote:

Exactly. Nobody knows where that $1 Trillion plus went, not even the Inspector General.

The obvious choice is Magical Tux. Mt Gox is next big target. There were 9.5M BTC in Silk Road revenue recycled SOMEWHERE in 2012 and 2013, and Mt.Gox was the leading exchange, one whose US accounts have ALREADY been frozen in the process of the SR investigation. The feds are going to do everything they can to cuff Tux. Now they have the leverage to extract the testimony from Shrem. I will be shocked if Gox survives 2014.

Indeed - there should be a tick box at the top of this thread that makes people read the actual complaint before posting here!  The whole thing seems pretty clear cut to me, if you knowingly launder money, knowingly flaunt AML restrictions, and knowingly assist people in criminal acts, then you should expect this type of thing to happen to you.

At least Lawsky, who is running the NY hearings later this week seems pretty circumspect about it:

"There are always going to be bad apples in any industry."

http://www.bbc.co.uk/news/technology-25918733

Will

Especially when you are the AML Officer for your company!

If you are going to play by their rules, what can you say when they come down on you for breaking them?

I'll be surprised if Charles spends any time real time in jail.  His position and history within the ecosystem has probably resulted in a pretty strong hand.  I sure would not want to be one of his 'friends' right about now though.

---

@Bugpower:  Oh!  Magical Tux would totally make my day.  I used to have a lot of sympathy and respect for Mark, but since he fucked me for $5k that has mostly vanished.  If he rolls back the transactions and returns my 50 BTC like I asked, I'll put the voodoo doll back in it's box :)

Well actually there is a law.  It is the BSA (or more correctly "The Currency and Foreign Transactions Reporting Act of 1970").  The BSA gives FinCEN rather wide latitude in determining which institutions fall within its scope, and what regulatory requirements they must meet.

please watch the interview

http://www.activistpost.com/2013/09/whistleblower-hsbc-still-laundering.html


Please understand that the drug war is a racket, controlled by those who are above the law, at the expense of the people of the world, and make no further excuses for this abuse of power. Stand up for your rights before they are entirely gone.

Mark Thornton gets it right:

http://www.youtube.com/watch?v=o9MgCUMkfwc

Which has nothing to do with bitcoins.

@jballs - awesome name

Did BitInstant only deal in bitcoins?

""The Currency and Foreign Transactions Reporting Act of 1970"" doesn't apply to selling bitcoins. Of course Feds will say anything since they have the most guns (for now).

Does "The Currency and Foreign Transactions Reporting Act of 1970" apply to fiat transactions. Did BitInstant make fiat transactions?

http://en.wikipedia.org/wiki/BitInstant

Shrem made the fatal mistake of not encrypting any emails, and using his company email to organize shady side deals with this guy "BTCKing", who after reading the criminal complaint seems unbelievably retarded and totally inept at money laundering. If you go through the complaint he used the same email address to pay $13,000k in various cash deposits in one day through their payment processor who immediately flagged him. He does this again and again with Shrem having to clean up the mess everytime and even teach him how to avoid detection which the guy still failed to do.

huh? I bought Jack n the Box today transacting with fiat...am I subject to "The Currency and Foreign Transactions Reporting Act of 1970"????

No...derp

Oh, come on. Were other people paying for your sandwich by depositing fiat into your bank account?

i hope fbi take down half of bitcoin foundation member next.

Wow. What do you wish upon your enemies?

THIS..

If they knew about the fact they breack the law, and they do.. And Law enforcment have been able to track this and act, this is good for Bitcoin.  This prove that Bitcoin is'nt more "anonymous" than fiat, afaik, unless super0precautions are taken. 

Then, Law Enforcment can't hate Bitcoin at a point they want to destroy it, because they seems able to look and act in case of a criminal action... This makes Bitcoin more interesting to everyone, including law inforcments agencies.

IMO : overall, it's good news if all true !

The position of the US Government when it comes to money laundering is that to all intensive purposes it make little or no difference if the funds being laundered are USD or BTC. Start with the FINCEN guidance http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html (http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html) and follow the press releases of government officials. So the pirateat40 "funny money" defence will get you a jail cell.

Seems the moral of the story is anyone involved in bitcoin business, legit or not, really ought to bug out of the USA, and find a free country to do business in.

I hear Somalia is a nice place to set up shop...

I was thinking Grand Cayman or one of the other islands the bankers own to exempt themselves and their wealth from the laws they enforce upon the plebs.

Somalia not so much.

The conditions in Somali are a result of multiple failed corrupt institutions in a sequence.

Maybe you can "Un-corrupt" them with the magical power of Bitcoin? Then you can go on to free(rule) all of Africa.

Charlie Shrem could be a patsy and the NSA probably spied on him just like every other VIP figure in the BTC Network. It's only a matter of time before they start taking down other high profiles within the community!

Sorry, as cool as Bitcoin is, you don't undo decades of destruction with a magic wand. I don't want to rule anything, especially other people. What a tiresome job that would be, like herding cats.

Go to Belize or Panama !

Columbia has the Chinese version of the Panama Canal and will be a very lucrative thing to happen!

Cats or Sheep, same thing?

No... not at all. You must misunderstand the phrase.

No, its all political theater. Shrem will be fine. He registered with FINCEN. He's helping promote them. Its psychological warfare. Be scared, you could be next!

After watching my little brother go into rehab and come out overweight and sluggish but clean after a Silk Road fueled drug stint, I sympathize with the actions of the government bodies in this case. Knowingly supplying the means to purchase drugs is abhorrent and wrong. That being said, Yankee is a martyr in a philosophical sense and I hope one day we can grant him a Presidential pardon. He is a necessary force in this Universe that has greatly fostered economic equal opportunity and efficiency. Someone had to do the dirty work of the early days of cryptocurrency advocacy.

"Guard! Guard!"

"What is it, Chuck?"

"I need to make a phone call ASAP!"

"To a lawyer?"

"No! To The Bitcoin Foundation. I want to make sure they don't give my seat away. BTW, can I have another blanket? Guard! GUARDDD!"

The ball is most definitely in The Bitcoin Foundation's court, and while they're at it...

http://1.bp.blogspot.com/-b8nCV-O-V-Y/Uno9aAf9rTI/AAAAAAAAEOI/pgcgtGvB63Y/s1600/gox-screen.jpg

http://images03.olx.com/ui/2/26/13/18172313_1.jpg

Luckily, theymos won't let the NSA or FBI have access to the PM or IP logs of this forum.

I pity the guy with the highest post count.

It is not the obligation of the state to keep your little brother's nose out of a bag of shit. Sorry but until we all snap out of this FUCKING STUPID idea that prohibition works, and is not totally corrupt, and insanely violent, and profoundly wasteful of human life, we are doomed to perpetuate the cycle. Your brother is a junky get him help or let him be a junky. You think his being a junky entitles a paradigm of drug cartels, crooked banks, paramilitary terrorists, billion dollar black budgets, thug street violence, overflowing prisons, and fat cops and fat prison guards on fat pensions telling us they are keeping us safe, sorry your brother is his own problem, and I would rather he just OD'd and took himself out of the gene pool than justify all the disgusting human behavior that prohibition creates. The government isn't helping, they are just price support for the cartels and the enforcement biz. Wake the fuck up please. 42 years of war on drugs, ain't gonna win it, time to change.

This shit ain't prohibition. It's tracking down fuckin idiots who think they are internet che guevarras when they can't even take care of themselves.

When prohibition doesn't work, it's time to kill and erase everything. You think prohibition is somekind of an ultimate form of state oppression? LOL this posh ass thinking.

Exactly what I would expect from 1st world retards who believe they know anything about 'government oppression'.

This kid got his ass burned because he thought he could run his shit behind his computer without any repercussions in other people's lives. His was a crime of ignorance and irresponsibility, and now he's paying for it. Crypto can be used for all kinds, certainly as a means to pay off someone for murdering your family.

Who are you all kidding anyway?

You will pay the price for your comments.

We're all going to pay the price for thinking we have a single shred of liberty. Unless that's a personal threat from you to jballs.

Take it personal if you want I have plenty of drug addict relatives myself, hell we all do don't we? That is the point. It doesn't work, your brother will either clean up or die or third option rot in prison. It isn't silk road's fault or anyone else's, it's a racket that will always be here and all you do is encourage it by condoning it.

No, I don't. And anyway this doesn't give you the right to offend other people's feeling. Ignore list.

No right not to be offended. Right to not be a victim of civil rights violations resulting in death (being a victim of the war "on drugs" aka liberty, even if you have never voluntarily taken a controlled drug in your life), though. Ignore list.  :P

Divide and conquer. You see how it works?  ;)

Interesting. A lot of this goes over leveraging the SWIFT institutions, never mind US power over IMF and Worldbank (and Visa/Mastercard). Its going to be very interesting how the international financial law evolves in connection to offshore tactics. Say there would be a bitcoin friendly country integrating with the worldwide fiat network. I think a lot of this will then determine how bitcoin can be used for things which are done in fiat now.

TPTB only have to concoct a fake arrest to scare people from using bitcoin. Use this event as a buying opportunity.

Did I just read somewhere that they took 25Million in BTC from Charlie??

http://www.abc.net.au/worldtoday/content/2013/s3933146.htm

No. Is English your first language?

Yes it is, clearly I made a mistake when reading the post. I now see where I went wrong.

But I'm sure they took BTC from Charlie, I have ears and heard it through the grapevine.

Here's a thought:

What the Bitcoin Foundation does about Shrem is their business, not ours.

The Foundation represents no-one but the Foundation. In the broader Bitcoin community, they have no mandate, and have no authority. They were not elected. They were not appointed by a higher authority.

So, for the same reason that they do not represent me, I have no say in how their private organisation rules itself.

However, as parties external to Bitcoin seem to treat them as if they were representative, I wish they would get their house in order or STFU. The allegations made against some of the members, if true, do nothing to help promote Bitcoin in the world, and arguably are ammunition for those who oppose Bitcoin.

Despite what else the Foundation may do to promote Bitcoin, the Foundation may overall be seen as harmful to the interests of Bitcoin because of the alleged conduct of prominent members.

imagine charly s. was trading apples. they busted him because:

he traded apples for dollars with someone,

who allegedly sold those apples to others,

who allegedly used apples to score drugs from others.



the feds are testing levels of support of the bitcoin community. if they get away with this, they own us. every bitcoin can be traced around some corners to silkroad. you are all criminals because some other people like getting high.  ::)

FTFY since you may not have read these two pertinent parts of the scheme.

You missing the key components intent and knowledge.  In your example no crime has occurred.  The complaint (and yes it is only one side of the story but lets get that side of the story right) alleges that he KNEW the funds were used in criminal transactions AND WITH INTENT he actively broke his own companies policies in order to facilitate those transactions.

Is it true? I don't know, that is what juries are for.  However your example wouldn't even rise to an arrest warrant.  It is a complete and utter non-crime.

BTW: the war on drugs being stupid is a red herring.   The war on drugs IS stupid, massively wasteful, and ultimately pointless however today those laws are on the books.   One can believe the war on drugs is futile and at the same time understand that breaking those laws (no matter how stupid and pointless they may be) has real consequences from the entity with the guns and a monopoly on the use of lawful violence.
 

I don't think anyone on this thread has said anything in support of the foolish, doomed, so-called "War on Drugs."  

However, even people who don't support prohibition don't by contrast automatically support all the crime that goes on in the drug trade, and quite reasonably don't want to be represented by people who do.  Like it or not, it does tarnish the name of Bitcoin.  As drug trafficking goes, there's everything from the praiseworthy, like activism for compassionate use, to the selfish but justifiable, like activism for one's own right to smoke whatever the hell you feel like, to the depraved, like murder for hire.  Money laundering for drug dealers to make millions of dollars really isn't on the praiseworthy side of the equation.

It shouldn't be the public face of Bitcoin, and if the BCF can't figure that out, maybe they should be raided.  Just for felony stupidity, if nothing else.  The presence of people like this on the board does nothing but harm Bitcoin.  Maybe not much, especially if they come to be taken less seriously as a result of this kind of foolishness.  I suspect other board members are worried about their own positions if Shrem qualifies for an ouster.

This is expected. The only threat is from our own developers. Its only internal for us now. Go on weak hands, give me some $540 coin.

So if walk into a bank and get a loan and use that money to buy drugs even though the bank has no idea that I'm going to use it for drugs the feds will arrest the CEO if I get caught and they find out where I got my money????  This case has no merit whatsoever.  The feds are just trying to scare people like they always do.

you need to learn how to read and analyse.   Read the story NOT the headline.
AND YES, if you walk into Chase bank and withdraw a bunch of money and tell Jamie Dimon it is so you can buy some drugs (or help others buy drugs) and Jamie Dimon says "cool dude" and then Jamie Dimon FURTHER tells you how to circumvent Chase's compliance infrastructure so you can CONTINUE to do this, THEN THE CEO OF CHASE BANK WOULD BE THE ONE ON A PERP WALK.

You obviously have no clue what the case actually is, because what you said has zero resemblance to it.  The case is not that he had "no idea" that anyone was using this for drugs, but that he knew damn well that it was for drugs and deliberately assisted in covering it up.

If they can actually prove what they claim, it's a no-brainer slam dunk case.  Now that's a big "if," but that's what their actual case is, not your straw man.  You could try, I dunno, actually reading the complaint (http://www.justice.gov/usao/nys/pressreleases/January14/SchremFaiellaChargesPR.php) [pdf at the bottom warning DOJ site if you avoid those scary places].  Not like it hasn't been repeatedly posted to the thread already.

Really? No alcoholics, no cigarette addicts (that one is brutal), no prescription drug users (you know for the "fibromyalgia"), no morbidly obese who can't stay out the buffet ot the fridge at 2am?

Maybe you're of the Amish online community. Fine, the rest of us have drug addict relatives, or are or have been addicts ourselves. You want to criminalize some addicts and turn them into a feedlot profit center and cheer on the jackbooted thugs kicking doors in, that offends me.

That my country would tolerate this for one second "because drugs m'kay" grossly offends me:

http://benswann.com/new-mexico-police-force-enemas-anal-cavity-searches-on-drivers-pulled-over-for-minor-violations/

That any country has to endure THIS because someone's little brother can't be spared the hazard of making his own fucking decisions in life-

http://bitterqueen.typepad.com/friends_of_ours/2013/08/beheaded-remains-of-thirteen-kidnapped-mexican-youths-found-in-mass-grave.html

This?

http://latino.foxnews.com/latino/news/2012/11/01/mexican-daily-nearly-60000-drug-war-deaths-under-calderon/

This offends me,  yes it does. If it does not offend you, may want to rethink your values. None of this is caused by drugs. It is caused by prohibition and the profits it generates.

Your example makes no sense whatever.

The bank doesn't know what you're going to do with the money.

Charlie knew where the money was going and he knew The Silk Road was no mail-order gardening supply store... Ya'll need to stop acting stupid.

It's cool to dislike the gov't but Bitcoin needs to cut itself off from people like Charlie.

Doubt that would happen. That guy is pretty much above the law. As are the top execs of the other TBTF banks. HSBC only got fined for far worse money laundering of drugs money.

+1

At the height of the Colombian drug trade before the Escobar takedown and the rise of the Mexican cartels, the Federal Reserve had an "anonymous" window at the Colombian central bank where anyone could bring US dolllars in any amount and convert them to local currency. The sole purpose was to repatriate dollars back to the US financial system, because so much drug cash was ending up down there. The Fed opened an official money laundering channel that operated for years.

Also NYSE chairman Dick Grasso personally travelled to the jungle to meet with the leaders of FARC, narco terrorists, to persuade them to make US investments with their assets.

HSBC is just the most recent example of business as usual. No banker has done a perp walk for money laundering since the 1980's when there was still some shred of true intent behind the drug war. Now it is all about profit for the monopoly that controls it. The banks and cartels and enforcement are all working together now, all you have to do is follow the $$$.

Sources

http://lexisnexis.co.nz/riskandcompliance/podcasts-interview-bob-mazur-part2a

http://www.scoop.co.nz/stories/HL0202/S00069.htm

http://www.thenewamerican.com/world-news/north-america/item/17396-u-s-government-and-top-mexican-drug-cartel-exposed-as-partners


Stop the madness...

Sure, the bankers are criminals just like your d00d.  They're simply better at what they do, and don't get pwnt.
Crime, like everything else in life, must be done right to be successful.
Your d00d was doing it wrong.
Doesn't make him innocent, simply bad at what he does.
Not sure what all the commotion is about.

The commotion is who decides what is a crime. I gather you miss the point, though i will accept yours as a matter of pragmatism. He was stupid, silk road was stupid, we would all be better off if the laws were changed and a large segment of the population of the world was decriminalized.

Those who have the power to make laws get to decide what is a crime.
Unsurprisingly, laws are skewed to benefit those in power.

Nicely stated.  +1

It's worth note that the U.S. has a somewhat expansive view of 'in the US' when it comes to financial matters, and it does not map to the classic notions of geography which we all learned in grade school.

1. There is no evidence that Charlie knew what the BTC he sold was being spent for.

2. Its not his responsibility anyway.

3. There are many legal things for sale on Silk Road too. Corp USA argument has no merit whatsoever - these are simply scare tactics.

There's page after page in the criminal complaint that says exactly otherwise.  In fact, he'd bought drugs off Silk Road himself.


Legally, it is once you register as a money transmitter.


Well, good luck on that.  Tell me how it goes in a couple years.  In the meanwhile, those "scare tactics" have him behind bars for the foreseeable future.  Frankly, I'd find that kind of scary if I were he, too.  Or if I were in his contact list.  Or if I had anything to do with a "Foundation" with his name on it as Co-Chair.

Bharara will go to any length in terms of aggressive and evil as long as it serves his career, from the looks of this

Let's check the facts:

-BTC is not illegal
-Silkroad per se was not illegal, it was a site where legal and illegal stuff was traded
-BTCKing sold legal bitcoins to users of a legal site. Whether BTCKing did comply with regulations when he sold a maximum of $1000 worth of BTC to anonymous counterparties, I don't know. Maybe BTCKing should have registered as a money transmitter? Maybe that part was not even clear in 2012? Hard to tell.
-Bitinstand obviously sold BTC to BTCKing, but not anonymously. This would be like bank A doing business with bank B. Bank A does not comply with regulations or has some customers that use cash withdrawn at their ATMs that are located in bad areas, for illegal purposes, and bank B is made responsible because they delivered the cash to fill these ATMs. The prosecutors would claim that bank B must have known that a lot of cash in these areas is used to buy drugs etc. Insane? Not from the viewpoint of insane minds.
-Advice from Bitinstant to BTCKing to split cash deposits is not illegal itself, in fact thousands of people get their bank accounts blocked for legal things like buying bitcoins. Advising someone to avoid certain things that are legal but also red flags, to avoid unnecessary discussions or account closures, is also not illegal.

In such a world, no bank could do business with another, since anyone could be arrested anytime for someone else's mistakes.

Funny how America complains to Russia about cases like Chodorkowski, but use the same twisted logic themselves all the time  :-[

Now all Bharara needs to do, is attack Mtgox for trading with Bitinstant and, of course, all banks that have done business with Mtgox. Finally troops have to be sent to Japan because the Japanese central bank has "knowingly" sent funds to these banks, "making good profits along the way". Perhaps there are some intermediary banks to attack as well? What a huge pile of crap.

Let's see how this develops.

Not just financial matters, any matters. It does map to the classic notions of imperialism.  ;)

Naturally other countries would like to do that, too, if they could.

Kid can't even take the time to shave, and he wants to be a dirty money laundering kingpin.  What a joke.

I literally lol at this  :D

Actually it is.  It is called structuring.  An MSB has certain requirements that don't exist for other businesses.   MSB are prohibited from advising their clients how to avoid reporting thresholds, they are prohibited from aiding their clients to structure transactions.  If a client does engage in structuring to avoid AML reporting, KYC requirements, or recordkeeping and the MSB becomes aware of that the MSB is required to treat all structured transactions as if they were a single transaction for various statutory obligations.  They are liable for failing to report transactions, failing to keep accurate books, and for even notifying clients that they have filed a report with FinCEN as required by law.

Everything you described would be a criminal act by an MSB, even if there was no underlying overt act.

My best advice is don't provide advice for things you have not done legal research on.  Someone may believe you and end up in prison as a result.

There is a huge difference between a financial institution (be it bank or MSB) UNKNOWINGLY processing transactions which are related to a criminal enterprise and doing so in compliance with its own internal AML policies and in accordance with the requirements set by FinCEN.  It is a completely different thing for an entity to KNOWINGLY engage in those transactions, violate its own internal AML policies, assist the criminal client with bypassing AML procedures, and failing to report those transactions to FinCEN.

The complaint doesn't allege the former, it alleges the latter.  For the record I am not saying Charlie is guilty of anything, the complaint is only that a complaint and the allegations until proven are just allegations.  It is up to a jury to decide if the state's ALLEGED charges have merit.  However lets at least start the discussion on what was ACTUALLY alleged and not some fantasy scenario where the prosecution is merely charging him for selling some coin in full compliance with his company's AML program that someone unknown to him later used them in a crime.  That is just 100% BS.

Well said, seems that many have a misconception about the allegation.

He was bailed out anyhow, nuff' said.

I have actually endeavored to make sure that some of my transactions exceed $10k in order to trigger alerts.  This for the sole reason of trying to ensure that I am not accused of 'structuring', and at times it has been an inconvenience.

I suppose that in an ironic sort of a way, even trying to make sure I trigger alerts could be considered 'structuring.'

He is a hassidic Jew. They are always a bit hairy.

Yup.  They're pretty sure he's going to talk like a parrot.  I'll confidently predict he'll never set foot in a hodling area again.

This is the same prosecutor who took down the poker sites on black friday.  His sole goal is to make the headlines in major cases involving money.

While I am no fan of that action, which personally cost me a lot of money (not lost on the sites but income I would have made), I'll note one of those sites was Full Tilt Poker, which turned out to be operating as little better than a Ponzi scam.  The fact is that he is a prosecutor, and it is his job to prosecute offenses against federal law.  I assume he's actually in favor of the laws he prosecutes, but it would be completely irrelevant.

I sometimes get annoyed when the same kind of people who would vociferously object to "judicial activism" and "judge-made law" nonetheless object to prosecutors doing their job and prosecuting violations of laws they had nothing whatsoever to do with passing into law.  Who does that?  The people we elect to Congress.

No purpose is served by pretending everyone on the other side of this is some kind of incompetent buffoon or cartoonish villain.  It is exactly that kind of short-sighted arrogance that has led DPR and now Shrem by the nose into a deep pile of shit.

Not saying you're responsible of this, but I've certainly seen a lot of it on this and other threads.

No, sorry, atheist and not living in the US..and no, sorry, no drugs addicted (as far as I know, you never know..)..but that's not the point. I just hate when people in this forum starts offending others if they don't agree with their opinion.. it seems to me a stupid way of discussing, like saying to someone that his drug addicted brother would better die... But act as you wish! :)

Oh, I agree, hes not an ignorant person, he's actually very bright.  And FTP was breaking the law and scamming their customers in a major way. 

My comment was just an observation that it seems he has an agenda to get involved in the biggest cases, and loves to have his name out there.  Which, does not bode well for financial felons, or anyone in his cross hairs.

I object to any government official violating their oath of office, where they swore to uphold the Constitution and the inherent human rights thereof. Judges, prosecutors, lawmakers, they all swear it, and it's rare to see them actually honor their oath over their entire career until retirement and not be expelled by totalitarians. A court upholding inherent human rights is not "judicial activism" or enacting "judge-made law", it is fulfilling its oath. Drug laws categorically violate human rights, as well as calling any exercise of economic liberty whatsoever "money laundering".

If you're going to be in government, be this guy:
http://cdn.twentytwowords.com/wp-content/uploads/No-Nazi-Salute-02.jpg

so if you don't comply you get fucked for that and if you comply it is called structuring and you get fucked also for intentionally not violating the rule.

AML legislation, honoring the memories Orwell, Stalin and Kafka all at the same time. Very versatile, much better than a Swiss army knife.

perfect for those regions where drones may not be used  to remove regime critics ;D

Well i dont know that dude or his brother so it is pretty irrelevant and entirely not personal. Of the 60,000 dead mexicans at last count, most are civilians. Many are children, all are caught in brutal contest for control of the drug trade. Would i rather some yankee kid make the choice to go buy drugs and get wasted and maybe addicted of his own volition than "protect him" from that bad decision and kill tens of thousands of innocent people who made no such poor decisions? Especially given the total inability to actually stop drug flows anyway?

Hell yes, if that offends you, i dont care. Go talk to a mexican family who had their kids beheaded and ask them about the moral eqiivalency.

There is another thread on the topic here in the forum, with a poll asking "have you actually read the indictment?"..yes, no, just what it's said in the news. I guess (and hope) many people posting here haven't done it. Based on what is written in the indictment (and exclusively based on that), what he did is indeed a crime. You may disagree on whether the law is right or not (I in fact tend to disagree to some of the different US AML nuances, but it's irrelevant) but still, according to the indictment and according to the US law, that is a crime. Having said that, investigators are not perfect and maybe he wrote a lot of BS on the indictment. If so, he will be found not guilty.
But please stop saying BS if you a) just read the news headlines b) have no idea of what ML is.

This is a public forum ... people voice opinions that can be completely wrong of course ... maybe the forum should be moderated so only posts certified by a lawyer such as you, are published?  :-X


Maybe you're right, but then Russia more honest and straightforward by just saying, anything related to BTC is potentially connected to terrorism money laundering or whatever and you may be in hot water for just dealing with it. Simply no one without superpowers could have no reasonable doubt that a buyer is not using it for that. AML is turning "innocent until proven guilty" upside down.

That is exactly why no US bank wants to deal with BTC businesses and close accounts when they hear the word.

That guy was probably imprisoned or even executed right after this photo was published.

 ::)
This info is scary, what the hek in the world they arrested such a nice guy

http://en.wikipedia.org/wiki/August_Landmesser

HE WAS NOT IN COMPLIANCE (some of the others got busted for structuring; especially if they were in the wrong party)

You can't be in compliance. See kafka. All the Fincen/Patriot Act/Fatca legislation is intended to declare anyone a criminal  as they see fit. This is the fundamental failure to communicate here. These laws are not constitutional, or if they are then we have abandoned the premise of the constitution.

http://en.wikipedia.org/wiki/E-gold#Criminal_prosecution

They will simply find a reason if they want to take you down. The "law" provides for this and is therefore no longer a law but a bludgeoning tool for those above the law to apply as they wish.

Nothing to do with bitcoin price !

Seems like government instances are trying to make a scapegoat for the silkroad case and close it then. Would be very logical to have a "main" villain whom the press could blame.

It seems, with the knowledge that the press release gives, to be pretty unfair of a procedure, but what can you do, a justice system doesn't have to be just.

Turns out that this is more serious than I thought.  Unbeknownst to most of us, Shrem was 'The CEO of Bitcoin'!

I only know this because of the wonderful reporting here:

  http://news.medill.northwestern.edu/chicago/news.aspx?id=227147

One sure can miss out on a lot by not following the mainstream news.

This is a sad story of how greed can affect one's decisions for the worst. I don't think Charlie thought he'd ever get caught, but it was obvious to me from the emails that he knew he was breaking the law. You can't agree to play by the Fed's rules and then do something different behind closed doors... they'll find out sooner or later and bring down the hammer.

In hindsight this video is quite ironic: http://www.youtube.com/watch?v=sqzubpLxmSQ
(Charlie Shrem at San Jose Bitcoin Conference 2013 - "Cash Deposits, Challenges and Ideas")

and i thought investigative journslism was dead!  next week they have this interview with mr nakamoto, you know.

b r i l l i a n t.

"CEO of Bitcoin" lol.
I would like to ask the "CEO of News" to comment on this news article.  :P

Looks like a student-run publication to me.  So we can expect journalism to improve soon EVEN MORE than it already has in the last few years.  Hooraw.

Fail!  No graduate degree for you!  _{(What's that?  Paid tuition?  OK.  Pass!)}

 ;)

I don't think the subject of a SAR is allowed to know that they are...(insert horrible pseudo-reference) http://en.wikipedia.org/wiki/Suspicious_activity_report#Confidentiality

At any rate, the allegation uses email quotes from Charlie liberally. Hard to see how that is unlikely to be true. It's not just failure to work hard enough to discover rule violations, it was failure to do the job of a compliance officer.

It may not seem fair that different rules apply to people buying eggs low and selling high than to people doing the same thing with money, but the rules are different. For this use case, bitcoins are more like dollars than a commodity like eggs.

That was my point although horribly phrased.

An MSB is obligated to file a SAR when the transaction meets the criteria.
The MSB is prohibited to notify the client that a SAR has been filed.
Even when directly asked or subpoenaed an MSB is prohibited from indicating if a SAR has or has not been filed.

http://youtu.be/BnP84GN6HdI?t=5m57s


Hmmmm?

Are you trying to point out hypocrisy in the system?  You don't honestly think I am defending the status quo.  The big difference between anyone related with Bitcoin and HSBC is "you" aren't to big to fail or jail.

Sometimes the real world sucks.   I think looking at what HSBC got away with and using it as a business plan is a good way to end up behind bars for a significant portion of your natural life (unless you just happen to have assets in the hundreds of billions of dollars range).

No I don't subscribe to the idea that bankers are above the law. They have managed to get there, but they cannot be allowed to stay there. Thus, any time an opportunity to bring awareness to the two tiered legal system we now have (where Shrem gets arrested for a couple mil and HSBC gets a fine for billions), that is my point of interest. We have a duty to not accept that Shrem is a "criminal" for breaking the laws the US DOJ refuses to enforce upon Wall Street bankers. Equal protection under the law, constitutional mandate, fully valid defense.

Believe it or not, Charlie probably shaved at least every two days, but with an electric razor set at some minimum depth.

Fight the good fight against the banks, I won't get in your way. 

It doesn't make the claim that MSBs can legally aid their clients in structuring to avoid mandatory reporting (among a host of other falsehoods) which is the post I was responding to.

So many mistakes in the following paragraph alone.


WTF! Even a YouTube video is entitled incorrectly: Bitcoin Boss Arrested ( Bitcoin executive Charlie Shrem is accused of money laundering ) (http://www.youtube.com/watch?v=fYOyucLZJ2M)

I know and it is two parallel issues. I was an institutional broker for a long while and i was trained & certified in AML for years.  My revulsion to the current state of affairs comes from being inside the machine. Some cartel guy comes into my office with a suitcase full of cash i have to file. This in theory is supposed to stop criminal activity. So instead cartel guy takes HSBC execs out on his yacht and so what is the point? I have to pretend to scoop the little fishes out with a net while the sharks run free. That just wastes my time and creates the illusion of emforcement when there in fact is none. So until HSBC is held accountable there is no reason for anyone to enforce the AML regs. We are either a nation of laws or we are not.

I have no position in the financial industry currently Fyi. Else i couldnt speak of such things.

Oh, I see!  It must be some sort of an advanced research project to carefully study the effects of total and utter shit journalism!

What I don't understand is why they would have to sully the Northwestern University name producing their own shit journalism when there is so much dynamite material produced by the professionals every day?

That is 100% correct. It is a common strategy for dictators to issue foggy laws that can be used against anyone, to keep people under control.

And I am sure if there had been a Nazitalk forum at the time, many posters would write things about Landmesser like "his own fault" .. "why did he not raise his hand if that is the law" .. "the complaint is correct, he did refuse to raise his hand, read the complaint" .. "how can he have been so stupid" and so on.  >:(

I admit that I have not heard of Shrem before, but I feel sorry for this guy who has obviously done nothing wrong but to exercise honest tradesmanship by selling BTC for USD at mutually agreed conditions. If he had been defrauding bitcoin owners for the same dollar amount, he would be in much less trouble. US (justice) system is deeply sick.

Actually, BitInstant was dodgy from the word go, advertising "instant" Bitcoin transactions that often took days in practice.  It went belly-up after its business model failed.  I don't have any love lost for that particular service.  I wouldn't say they'd qualify as a scam and, in fact, the other exchanges have similar problems.  It seems they were pushing through Silk Road transactions with the added vig ahead of non-lawbreaking users.


Sadly true.  Look at what happened to pirateat40.  Oh, yeah.  Nothing.  There's a civil suit by the SEC, which means the worst he'd have to do is return the money he stole and pay a fine.  Anyone who had run a Ponzi scam of this size denominated in dollars would be looking at hard time and would probably now be awaiting trial from behind bars or, if bailed out, the bail would be enormous.

Has anyone bothered reporting it to the Police as a fraud though? Maybe it might have been ignored a while back (what is Bitcoin etc) but I doubt it would be now if it went to the right people with evidence.

The fact is that most people on here want Bitcoin to grow and be accepted as a currency and with that comes responsibilities, such as obeying the laws that relate to all other currencies......

Report to the police? Be careful about reporting to the police. People have lost valuables, lives of relatives, even their own life when or because of reporting something to the police.

:)

Yes report to police, you can take your "stop snitchin" attitude and shove it where the sun dont shine!

What police? Remember you people abolished all governments. There is no police anymore.

Reporting something to the police is usually pretty safe for white people judging from the reports I've seen.  So far at least, though there does seem to be a movement towards them being generally more intimidating.  Make sense because this is the best force multiplication factor and there probably looking forward to a society in which they'll be needing it.

The SEC shares responsibility with the FBI and FinCEN for determining whether a crime has occurred, and the facts in the civil complaint they filed unambiguously state that Shavers was running an illegal Ponzi scam, which is a criminal as well as civil violation.  Someone, somewhere in a position to prosecute considered it and chose not to do so, if not many someones.  This is somewhat similar to how Full Tilt could and should have been prosecuted just for their Ponzi-like activity and criminal self-dealing, but instead, were prosecuted for running a poker site (technically mainly for using banks in doing so).

Pirateat40 most likely cooperated in exchange for reduced/dropped charges.  If he had dirt to trade, he probably did.

An MSB is obligated to file a SAR when the transaction meets the criteria, but the criteria are not secret.

The MSB is prohibited to notify the client that a SAR has been filed, but the client should be able to figure out if the MSB was obligated to file a SAR.

The only thing the client is really prohibited from knowing is whether the MSB filed an unnecessary SAR.

The criteria are vague enough that there is no such thing as an unnecessary SAR.

Not exactly, the criteria is rather vague and open ended.  The intent of the requirement is for financial institutions (including MSBs) to file reports on activity that is suspicious.  Suspicious doesn't mean criminal, or known to be unlawful beyond a reasonable doubt, it simply means suspicious.

From FinCEN point of view there is no such thing as an unnecessary SAR.  SAR doesn't mean criminal activity.  Plenty of criminal activity simply never warrants a SAR because there is no circumstance that creates any level of suspicion by the financial institution.  On the other hand every day thousands of SARs are filed on legitimate activity.

It is a suspicious activity report not a criminal activity report.

http://www.fincen.gov/financial_institutions/msb/msbsar.html

Oh stop it. Yes, he was reported to the police. It was the sole 'remedy' available to us under the current legal structure.

It would likely have been much more effective for several of us -- whom had been defrauded -- to find him, strap him into a chair, put a c-clamp on his knee, and tighten it another quarter turn every minute, until he coughed up his private keys. By this means, we may have recovered some meaningful fraction of our losses.

But doing this would have made us -- the defrauded -- subject to being cast in a cage, due to our oh-so-civilized legal system, which is demonstrably unconcerned with justice.

As it stands, the law knows where he is (running free), he has stolen our property, and we've got squat.

Don't talk to me about 'governments', as if they are any kind of solution.

Maybe this is a bad news for bitcoin world... dont worry, more ppl can still stolen xD

The actual wording in 31 USC § 5318 (g) is "relevant to a possible violation of law or regulation."

So yes, unlawful is part of it.  It doesn't have to be beyond a reasonable doubt.

The non-disclosure requirement applies to reports made "voluntarily or pursuant to this section or any other authority".  So it covers SARs that are required, and also reports that are made voluntarily.

Perhaps FinCEN does not consider any SAR "unnecessary", but MSBs are required to report certain things per 31 CFR §1022.320.  Reports not required by this regulation could be considered voluntary.

Oh, that's right. Forgot about that. No more governments. Anybody ever try using it in court?

http://i-uv.com/oppt-absolute/original-oppt-ucc-filings/

:)

I think we are going around in circles.


1022.320 is extremely broad and vague, as pointed by others.  

You have no idea if a tx you believe is routine, is reported by an MSB because THEY believe it fits the guidelines in 1022.320.  The idea that you would know what rises to (as an example) "serves no business or apparent lawful purpose" in the mind of the compliance officer of every single financial institution (to include MSBs) in the world, all of which are prohibited to share such criteria with you, and for whom there is a penalty for not reporting (if regulators later believe the report was intentionally withheld), is just silly.

For example say you transferred $5,000 to PayPal but you mistyped and only wanted to transfer $500.  So when it clears you transfer back $4,500 but pick the wrong account and transfer it into a different account linked to your PayPal account.  It is possible (I have no idea only PayPal would know) that they would view that as "serves no business or apparent lawful purpose", it is also possible that they wouldn't.  The criteria is very subjective.  Likewise if you deposited cash into your bank account and then later had an emergency that day and withdrew cash from a different branch that might also (once again solely up to the determination of the financial institution) result in a SAR.  I am not saying it would, because I am not foolish enough to think I can predict the actions of thousands of different entities when it comes to a loose and subjective set of criteria.

You may think you know when a SAR is required or not but the criteria is so broad and vague, that a given activity may be reported by one entity and not reported by another.  

I read this three times and all I could think to add was this

http://www.youtube.com/watch?v=6WedNV8TR_0


final comment on the topic I suppose...

There's no indication any criminal action was filed let alone settled.  There's no indication anyone but the SEC is involved, which has no independent power to bring a criminal prosecution.  If the government had settled, it wouldn't be on any less terms than a return of the stolen money.  However, the civil action over the stolen money is still proceeding in federal court.  There is no good reason to believe there was ever a criminal case for there to be a plea bargain.

The correspondence between Shrem and co-founder Gareth Nelson made it clear that both co-founder and Shrem viewed the activity of the BTCKing account as suspicious and as exceeding the size of transactions that would qualify for mandatory reporting.  Shrem assured Nelson that he'd handle it, but instead, gave BTCKing advice on how to structure such transactions in the future, instead of performing his mandatory (and assumed) duty to report suspicious activity.

From 31 CFR § 1022.320


Arguably, the activity involved falls under the "illegal activity" in (i) and the "criminal activity in (iv), but even if it doesn't, the "avoid any transaction reporting requirement" in (i) and the "structuring" language in (ii) certainly apply.  While there is a lot of ground where this language is arguably ambiguous and there are many situations where it might be difficult to determine whether a certain activity triggered a responsibility to file an SAR, this case is not one of them.

Shrem clearly knew the activities of the BTCKing account were in excess of reporting requirements, and explicitly made his knowledge clear to Nelson.  Rather than file an SAR, he allowed the activities to continue under a variety of ruses so transparent that Nelson continued objecting to him allowing them.

Frankly, arguably, they have enough to go after Nelson, too, but he did a much better job covering his ass in his correspondence.  Also, perhaps he's been being cooperative, so I'd tread carefully if you've had any questionable dealings with that guy.  I find it curious the only paper about him in this case so far is a few mentions of him in the indictment, and wouldn't be surprised in the least if he turns into a witness friendly to the prosecution or is busily hanging out other people to dry to save his own skin.  To me, it seems they have, at the very least, enough to slap him with a fine.

Now, I don't think the more serious money laundering case is as clear-cut as the prosecution would have us believe, though.  I think it's there more to scare him into pleading to the non-reporting charge or some lesser included offense of the money laundering case.

There seems to be a surreal level of abstraction and disconnect on this forum when people talk abut law.  If you don't think TLAs shoot the shit with each other, or that people are not questioned and pressed for info without being formally charged, you are spectacularly uninformed.  As in never bothered to watch a cop show or got a parking ticked level of uninformed.  Forget IRL experience. 

Exactly what on Earth did I say that you decided to turn into this outlandish straw man and then attack?  I think I was very, very clear that other law enforcement agencies would, almost as a matter of course, have been aware of this case in some form or another and would have had to have made a conscious decision not to prosecute.  Read better next time, please.

What's so ridiculous is that you're all arguing over just another made-up news story. Shrem isn't in jail - of course. He's just another actor in the Masonic Theater.

The news was crafted just for you, right in time for their regulations hearing.

It was not "funds derived from illegal activity".  Allegedly, some of the funds might later have been used to buy drugs, but that hadn't yet happened. So (i) is out.

It was not structured to avoid the currency reporting requirement.   Shrem and BTCKing allegedly discussed $1000 and $4000.  The currency reporting requirement is $10,000.  Perhaps it could be viewed as evading some other requirement, but there isn't a clear case for (ii) here.

What about (iv) use of the money services business to facilitate criminal activity?  Perhaps.

Yeah.  I look at this and I can't tell whether what Shrem allegedly did was illegal.  Certainly inadvisable, but beyond-a-reasonable-doubt criminal?

He could have told the guy "Hey, stop doing that," knowing that BTCKing would probably continue doing it anyway.  So instead he tells BTCKing to quit causing trouble.

He probably should have said "Stop it", but was he willfully breaking the law to instead say to BTCKing, "respect our $1000 limit"?

What would you do if one of you were trying to resolve a customer service issue, and one of your customers suddenly says something about Silk Road?

You are wrong about the 10,000.   Go and try and cash a ticket at the sports book for $9500 and see what happens.   Then ask them at what point they have to bring the forms out.   They cannot tell you.   If you cash more than once and they recognize you they have to tell their supervisor also.
Spitzer was busted for a $5000 transfer that was reported as suspicious.   Remember him?

That's a different issue.  If it's over $600 in income, then they have to file a 1099 with the IRS.  And yes, they can tell you.

$5000 for a hooker?

supposing you are a bitcoiner: do you prefer cheaper ones ?  ;)

my point is bitco you are incorrect about your facts and should look more into it.  Spitzer was transferring smaller amounts through friends that were far below the 10k you quoted.   He was caught through the reporting of suspicious transfers and was not told he was reported.
Your casino 1099 comment is incorrect also.  go cash a $700 ticket.   they do not write out 1099s.   But yes, you as an american do have a responsibility to report all income you make.  Your $600 reference is the trigger point that a business must issue a 1099 and have a current W9 on file for the person (or LLC) that they have done business with.
I guess my larger point is, when you are not sure about the law, you should not post things that are incorrect.   

Launder could be receiving and sending coins, any coins. ???

Money laundering requires intent.  Receiving coins that you have no knowledge or reasonable suspicion they are involved in illegal activity is not money laundering.  Criminals have money.  I know it is a shocking fact but they do.  Not just Bitcoins, but also good ole US dollars as well.

There is a big difference between being an innocent counterparty, and actively evading the AML program your own company put in place.

What did I post that was incorrect?  Are you claiming that reporting of gambling income is not subject to the $600 threshold of 26 USC § 6041 ?

The Spitzer case is a separate issue.  Suspicious activity reports can be filed for amounts less than $10000.  There is a $10000 threshold for currency transaction reports. You are mixing up several different things here.

I said that it is likely that Pirateat40 has provided information in exchange for reduced charges.
You went on to protest that, to your knowledge, no one but the SEC was involved.
If no charges were filed in exchange for information, what kind of evidence would you expect?

In case I'm not being explicit enough, an example you might relate to:
A cop stopped you for pissing on a dumpster, told you that he wouldn't write you up if you ratted out your buddy, which you did.  Just what sort of paper trail would that leave, exactly?

What is it that you disagree with in my original statement?

I cannot educate you unless you care to learn.  You would be mistaken (and likely confused) on your first question and you are ALSO incorrect that the "threshold" is $10,000.
This is the last I will say to you.   If you wish to learn more, go to a casino and see what happens when you win $601...    You do not know what you are speaking of.   You are mixing google searches up and applying them to other things....
If you wish to test your $10,000 theory which you either take from the customs form for the US or from some other google search that you did, it will be simple for you to do.   If you have $9,000 in your bank account.   Go down and withdraw $4,000 (or $2,000 if you have more patience).   Then do it at another branch OR do it again the next day BUT DO NOT take out more than $10k.   If they do not ask someone to come over, do it one more time the next day.    See if you get it as quickly and without a supervisor having to "approve" the teller doing it.     See if they ask if what you want the money for (then they are deciding whether you are suspicious or not).  You might learn something.
Or if you know anyone in vegas or that works at a book or a cage in a casino, ask them.
Enough time wasted on that.

This is why I think the actual money laundering charge is pretty thin.  They have lots of evidence Shrem knew the transactions were suspicious and should have triggered the reporting requirement, especially for someone who was supposedly the AML officer for a corporation, including correspondence with the co-founder. 

The intent to launder money is not at all clear, though.  Money laundering is a specific intent offense.  While that need not necessarily be as specific as, say, intent to launder the proceeds of cocaine sales by Pablo Escobar to fund terrorists, just to pick a glaring example, it certainly has to be more specific than just an intention to collect fees on processing transactions that seem a little fishy.

Federal prosecutors also tend both to overstate and understate their claims in a complaint.  First, they overstate in that they quite often allege dire offenses with incredibly lengthy maximum sentences, but second, they understate in that they only cite enough evidence to establish sufficient probable cause to bring the complaint at all.

We can neither assume they can prove the claims they have made nor that they only have as much evidence as they cite in the complaint. 

I'm pretty suspicious of the 20 year maximum sentence money laundering claims, but if they can prove the factual claims they have made with regard to the failure to report (still a big if), they have him at least on that.  I suspect front-loading the complaint with the charge with a life-ruining potential sentence is to try to force a plea to the well founded but lesser charge.  Or something even less than that.

Yeah.  Money laundering is attempting to disguise the unlawful origin of money.  At most, Shrem knew that some of the money would likely be used to buy drugs.  There wasn't evidence that it had an illicit origin.

Still, some of the stuff Shrem allegedly wrote looks really bad for him.  You've got to wonder what he was thinking.

The only thing this will prove is that some bank employees are more suspicious than others, and some are faster than others.


Yep.

One of the US AML nuances says, not literally: the act of sending money (monetary instrument or funds) outside the US border to promote a crime IS money laundering. I don't agree at all with this, but as you can see, according to the Law, ML is much more than what one usually thinks. And in that case, it's not required for the money to be a proceed of a crime.. nonsense, but that's the way it is.

What they try to demonstrate in the indictment is that he knew the (monetary instrument or funds) was going to be used to promote a crime (buying drugs in SR). Interesting to understand if bitcoins can qualify, according to laws, as monetary instrument or funds.

Yes, but to come under the ambit of the money laundering laws, there generally has to be an actual intent to facilitate illegal activity, or at least "willful blindness."  "Willful blindness" is fairly tough to prove, and that's where they'd have to go on this, because nothing in the evidence (so far) cited shows that Shrem actually knew specifically and intended to effect drug trafficking.

However, he did (if the allegations in the complaint are true) commit a crime most people can't commit.  Most people are in no position to submit a "Suspicious Activity Report" (SAR) or to fail to do so.  Shrem cleverly put himself behind the 8-Ball when he became the AML guy for BitInstant, and became eligible to commit a crime most people will never even be able to commit, that is, the failure to submit an SAR when it is legally required.

That is the exact opposite of a smart move.  If you're going to sign on with the feds to do federal business, expect them to go after you with a vengeance if you fuck them on exactly what you agreed to do when you signed up.

I have been in the Bitcoin ecosystem since 2011 and know a fair amount of the mechanics.  Even so, I have scratched my head about the best way to buy and sell bitcoins.  I value my identity documents and it has nothing to do with trying to hide anything.  It has everything to do with not trusting the operators in the space and considering any data I send them, or even my access patterns, to be at great risk for sale to criminals.

This is key because I myself would not rule out using a 'darkweb' service such as Silk Road simply to obtain BTC in a safe way.  There is nothing illegal about obtaining BTC, and history has proven that it would have been a shrewd economic move at times.

All this is to say that it would be perfectly understandable if Shrem did not assume that the bitcoin he released and knew were going to be sold on Silk Road were going to be used to buy illicit substances or anything else which was illegal.  He clearly failed at his job duties, but 'big whoopee.'  It would be a dangerous precedent to put people in jail for that.  Won't happen.  I have to admit that I've not used Silk Road and don't know it to be the case that BTC bought there could be withdrawn in a normal manner, but I assume so.

If the bar is 'reasonable doubt', and Shrem has good legal council (which I'm sure will be the case), he might flat out win based on the material I read in my skim of the stuff that has been released.  I'll bet that if they bring a case against him at all, they'll need (and have) witnesses that can attest to more egregious behavior.  In this case I'm betting that Shrem's role will be on the other side of the equation.  IOW, he'll be a witness against bigger fish...and I'm hopeful that at least on of the big fish will be Karpeles since he's fucked me personally for $5k.

You've kind of stated the issue as it is for most people.  Nobody around here has much reason to like Preet Bharara.  But in this case, he's going after people nobody likes much.  Good jerb, Preet.

There are legitimate reasons to not want to identify oneself when buying bitcoins.  Aside from the risk of identity theft, some people who buy porn or donate to controvertial organizations don't want to be identified.

There's a right way and a wrong way to approach the legal issues here, and Shrem went about it the wrong way.  The right way is just file the SAR and say someone might be structuring transactions, but we don't know who it is.  If FinCEN says you have to get ID then you find a plaintiff who's adversely affected by that and sue.  If 25% of porn.com subscribers are paying with bitcoin then surely there's someone who could make a case for a chilling effect under the First Amendment.  Or there's a case for lack of equal protection for the homeless guy who can't get an ID because of no permanent address.  There are a lot of potential justifications for BitInstant's business model, but what Shrem did was just stupid.

http://en.wikipedia.org/wiki/First_they_came_... (http://en.wikipedia.org/wiki/First_they_came_...), divide and conquer, and all that jazz.

Agree with all of that, and especially the bolded part.  My main point is; can the stupidity be leverages as a 'get out of jail free (minus attorney fees) card'?  I think it just might be.  And if he's willing to play ball I'm certain of it.  If he's got anything better than what the released info shows at least, and the history of Bitcoin is such that I'm sure he's got plenty.

Well, in case you want to view Preet Bharara as some kind of monotone villain, here's what he's doing when he isn't doing this current dumb shit.


JPMorgan-Madoff Case Won’t Be Last Big One, Preet Bharara Says (http://www.businessweek.com/news/2014-01-27/jpm-case-tied-to-madoff-not-the-last-big-case-bharara-says)

Is it pathetically inadequate that banksters get a fine, however large, while someone like Shrem is facing prison?  Of course.

But frankly, these banksters cover their tracks better, as well as having better political connections.  They would never have left the series of emails that Shrem did.  Even though the internal communications of the banksters often do lead to adverse inferences that they know damn well that they're laundering drug money or Ponzi schemes, they have a whole language of euphemisms unique to themselves that their high priced white shoe lawyers can talk them out of if push comes to shove.

Shrem fucked up, pure and simple.  Banksters being scum has nothing to do with it.

And unfortunately for him, he's on the wrong end of the shotgun barrel here.  Preet Bharara is simply the fastest gun in the East on these issues, whatever you might think of him personally.  My personal opinion is he is a highly talented attorney and rather than being a cynical politician, actually idealistically believes he is doing the right thing.  That makes him more, not less dangerous, because he's fairly often actually doing the wrong thing.

You're right. Let's not think for a second about failing to submit a SAR, that's pretty obvious, he completely failed from that point of you and, if things as they're mentioned in the indictment are true and accurate (which is not always the case), there are pretty no justifications to explain in a lawful manner what he did -or better say- he did not.

I am reasoning now only about the ML part. You said "Yes, but to come under the ambit of the money laundering laws, there generally has to be an actual intent to facilitate illegal activity, or at least "willful blindness."  "Willful blindness" is fairly tough to prove, and that's where they'd have to go on this, because nothing in the evidence (so far) cited shows that Shrem actually knew specifically and intended to effect drug trafficking". I am playing now the prosecutors' role.. taking into account the particular nuance of ML I specified before.. In that case I (as a prosecutor) could argue that he: a) moved money or monetary instrument b) from the US to outside the US -not really sure about this..where Faiella was? In or outside the US?- c) to promote a crime..that's the tricky part, can they prove he KNEW what was going on and what Faiella was doing with those Bitcoin? At that point I (still as a prosecutor) will try and demonstrate that yes, there were some "legal" stuff sold on SR, but, to be honest, just a few (I logged in a few time for a research and I don't recall any, but apparently there was something legal, too).. Moreover, having Shrem himself bought something on SR, he can't say he was not aware of SR main interest...

Not sure if it makes sense, this is just my opinion but I'm looking forward to reading your comments..

You are correct that 18 USC 1956(a)(2)(A) does not have the "proceeds of unlawful activity" limitation.  Instead it is "with the intent to promote the carrying on of specified unlawful activity".

Selling bitcoins in the US would not be illegal under section 1956(a)(2)(A).  The basis of the charge is that dollars were sent to MtGox, which is outside the US.

The question is, did Shrem or Faiella intend to promote the carrying on of specified unlawful activity?

The meaning of "promote" here is not entirely clear, and the Supreme Court seemed divided on the issue in US v Santos.  The justices generally believed that investment in growing the unlawful business is promotion, but there was some dispute over whether this included paying ordinary business expenses.  Pehaps there are other cases that I am unaware of that have addressed this issue, but Shrem and Faiella weren't in the business of selling drugs.  To claim that they were "carrying on" unlawful activity merely because some of their customers did, seems a bit of a stretch.

One interesting case is United States v. Monroe, 943 F.2d 1007 (9th Cir. 1991).  Monroe and McCabe arranged for money to be sent to Hong Kong to buy marijuana, and were charged with violating section 1956(a)(2)(A).  However the money was actually sent by a DEA agent, who gave it to McCabe in Hong Kong.  Apparently the DEA thought this was okay, since the DEA agent didn't intend to buy marijuana.  If it's legal for the DEA to transfer money knowing that the recipient intends to buy drugs, why not for Shrem?

At my bank, I have a $2,000 daily limit, reduced a year ago from $5,000, then to $3,000 a couple months later, currently at setting at two.

Question: Does the IRS read this forum?

In before somebody else: http://www.youtube.com/watch?v=wvJiYrRcfQo

That last question is rhetorical? Not sure but controlled delivery is standard procedure for DEA. They buy drugs, they smuggle them into the country too. There is some evidence the Lockerbie bombing was a controlled delivery gone bad, also there was a pretty well documented affair in Baltimore where it turned out just about all the heroin in the city was brought in through controlled delivery, then distributed through lower level drug dealer channels. The DEA had inadvertently(?) become the kingpins, similar to Fast and Furious mentality but with drugs.

Then there' is Michael Ruppert and the CIA/Crack dealing, which also happened. And the recent revelations that the DEA has been in cahoots with the Sinaloa for like the last 10 years... add HSBC, well it's honestly embarrassing that the public cannot seem to figure out that drug enforcement and drug dealing are the same organization and they are footing the bill for all of it.

Bharara must know that this case is about peanuts; $1M? Ridiculous. Even if the wins the case its a joke; his other cases were 1000 times larger or more. Who is behind him, forcing him to destroy a young entrepreneurs life? I am 100% sure this is only happening because it is about BTC.

If it was about USD no one would give a damn.

It's all about priorities and right now a mouse is given priorities over a herd of elephants.  >:(

That's actually a seemingly strong argument, to the point you've seen it over and over again in news stories, i.e. Shrem bought pot brownies from Silk Road, so he must have known it was nothing but a crime operation.

If this is actually their strongest argument, though, it's really weak.  It's sort of like arguing that because the co-owner of a mall once scored weed at the food court there, this is proof he knew the mall itself was actually just a drug operation in disguise.  It looks good on paper the first time you see it, but not if you actually think about it much.

I don't see enough to convict on money laundering just because the dude scored some pot brownies.  I can even see some juries getting pissed off at having their time wasted on a case like this where the prosecution's lead argument is basically bullshit.

Yep, and as I have pointed out probably in this thread before, Bharara generally goes after cases where the numbers concerned are billions, not millions.  You frankly would not see a case like this against a bank that did the same thing for the same amount of money.

This case is about making examples of people.  It's about putting heads on pikes.

Justice need not apply.

This doesn't make sense. How would it be proven the owners "knew" it was going to the silk road and not other places?

This reminds me a lot of the Aaron Swartz case. Another brilliant man being put away for something questionable. Yes it's breaking the law, but people will get drugs anyway, and it was their decision to use their money that way...and don't even get me started on the whole war on drugs..shit is just a giant money-generating operation for the US government and the prison "industry".

I'll have to disagree on that.  Aaron Swartz was a fucking hero.

Shrem is at best a goddamn jackoff who ran a shady business that made bogus claims, called itself BitInstant despite often taking days to process transactions, and had no interest but making money for himself.

He does not deserve to be anywhere in the same sentence as Aaron Swartz.

+1

Don't know anything about Shrem but seldom a day passes I don't think of Aaron.

Aaron Swartz, Shrem, what do all these 'heroes' have in common?

Complete inability to deal with the situation when reality comes knocking at the door and you don't have a monitor and keyboard to hide behind.

'Heroes' on the internet, impotent kids with no experience in reality.

Stop making 'heroes' and 'martyrs' of these fools and get your head out of your asses. Crypto needs someone with actual backbone, balls, and experience not to mention competence to carry itself through storms of regulations and public misconceptions, not a bunch of internet jackoff kids who can't even handle a lawsuit and fold like a bitch with spine of a jellyfish when they actually have to deal with people.

Fuck's sake DPR got nabbed thinking he could play internet drug boss and trying to off somebody. A 29 year old computer kid thought he could bite off more than he could chew. Now he is paying the price, getting fucked over when the people came to grab his ass while trying to arrange a hit sipping a fucking soy latte in starbucks.

Time's come to stop being kids and start acting like professionals.

He said, from behind a monitor and keyboard.

Quoted for truth.

Interesting follow up article.

The coin prince: inside Bitcoin's first big money-laundering scandal
What last week’s arrest of Charlie Shrem means for the virtual currency

By Adrianne Jeffries and Russell Brandom

http://www.theverge.com/2014/2/4/5374172/the-coin-prince-charlie-shrem-bitinstant-bitcoin-money-laundering-scandal (http://www.theverge.com/2014/2/4/5374172/the-coin-prince-charlie-shrem-bitinstant-bitcoin-money-laundering-scandal)

Swartz didn't commit his "crimes" from behind a monitor and a keyboard, since you appear ignorant of basic facts about the case.  He physically walked into MIT's labs and installed hardware and software to "liberate" the JSTOR archives.

Subsequently, JSTOR has, in fact, actually done exactly what Swartz wanted and made its archives public (http://lj.libraryjournal.com/2013/01/academic-libraries/many-jstor-journal-archives-now-free-to-public/).

In other words, they basically ultimately agreed he was right.

It was the government that insisted on hounding him to death, despite there being no victim at all by that point.

So kiss my ass you ignoramus.

It is not interesting at all, it just shows some of the idiots that are involved with The Foundation and how they don't live in the real world.  You also now have Vessenes and his bankruptcy issues.  The judge is accusing him of trying to deceive the court.  I tried to bid on the mining rigs at issue but they refuse to give me specs or a picture after I questioned some of their ridiculous claims that they made to the court.

The Foundation needs to be dissolved ASAP so legitimate companies can form a reasonable organization.

isn't money laundering if you turn black money into white?

Shrem turned white money into a different form of white money which was then turned black

only if the SR illegal sellers would hand over their black BTC to someone, to turn them into cash, knowing it is black BTC, that would be money laundering imho

Money laundering means you don't properly report transactions.  Conspiracy is when you work with someone to do that whether or not you actually perform the act yourself.  Of course it is all accusations at this point.

This is obvious and why the prosecutor is either completely retarded or just a lying sack of shit - most likely he's both.

Money Laundering is when you try to hide the origins of funds though:

Placement - the initial entry of the "dirty" cash or proceeds of crime into the financial system.

Layering - attempt to separate illicit funds from its source.

Integration -  the money is returned to the launderer from what seem to be legitimate sources.

Someone actually came up to me and asked me if I heard about "the CEO of Bitcoin" being arrested  ;) lol

hahahahaha  ;D

I have heard this reported on more then a few occasions.  Just goes to show you how much education we have left to do.  Unfortunately anyone born before 1964 is not going to GET it unless they want to understand.  They have the capability, most just don't have these desire.  And that is who we find in power currently.  

It will take another generation to come into power before we will be able to fully realize the full potential of this technology.

I'd say 10 years at the soonest and more likely 20 year for full integration.

This shows the problem with many people involved in the Foundation.  Some of them think everyone else needs to be educated when they don't know much themselves outside of the world of Bitcoin. 

I doubt the Silk Road connection is their only argument. They'll just get him on some money laundering or tax-evasion.

All publicity is good publicity, lets see what happens surrounding this.

True,

That Peter Vesness, Mark Kapreles and Charlie Shrem are all involved in civil and/or criminal cases involving their virtual currency activities does not inspire me with confidence.  (Though Patrick Murck has been doing great work.)

Tell that to the victims of slander haha. I'd say it's awareness or at least getting the Bitcoin brand out there, but not necessarily good publicity. It's essentially a smear campaign, but hopefully more and more people will be able to see past this and to the benefits.

Not really in the case of bitcoin.

I don't want to read about any more arrests or illicit uses.

We need a virtual currency project that provides financial inclusion to inner cities.  

We need a virtual currency solution that reduces costs and friction of the hundreds of millions of individuals remitting billions of dollars to their home countries.

We need a virtual currency project that provided transparency and accountability to non-profits that allows them to more fully realize their missions.

Everyone sees bitcoin as a great big money grap but the impact to greatly benefit society is profoundly significant.  That is just not sexy enough to get repeated in the press every day.

If only that were true.

Individuals are conducting illegal activity with bitcoin. 

The lesson being that Bitcoin is not magical anonymous internet money.  If you use it to conduct illegal activity you may get caught and prosecuted.

pretty simple.

I don't see any reason why legitimate companies would have to wait for TBF to dissolve before forming a reasonable organization.

Yes, true.  But I think Bitcoin will need more developers because the current team is entrenched within the current system and they control many things such as bitcoin.org.  of course things can move rather quickly if people are motivated to do so.  Hopefully they will arrest a few more people (like Theymos) and maybe that will start to bring some of the other people to their senses.

Replies in bold.

This is why I think the money laundering count is fairly weak.  I think it is there to coerce a plea to the less serious, but better established failure to file an Suspicious Activity Report count.  It is pretty clear Shrem had a legal obligation to make such a report.  He didn't.  That's pretty open and shut, I think.

People need to stop using the "TV definition" of money laundering.  I have seen "black money into white money" and other similar nonsensical statements several times in this thread.

The statute is the statute and it is right here:


http://www.law.cornell.edu/uscode/text/18/1956

Bolded for emphasis by me.  Money laundering is a very very broad statute.  It has many different elements.   The prosecutor isn't charging Shrem with Money Laundering but rather being part of a conspiracy to commit money laundering.  That means he doesn't even need to have commited all the elements of the crime himself, rather that his actions combined with the actions of his co-conspirator meet this definition "with the intent to avoid a transaction reporting requirement under State or Federal law ... conducted financial transactions involving property used to conduct or facilitate a specific unlawful activity".  

Is he guilty?  Well that is up for a jury but can we drop the quaint TV land money laundering = "making dirty money into clean money only" definitions.  They serve no purpose.  If the law says Money laundering is eating a cheeseburger on Tuesday then that is what it is.  To try and proactively avoid the flames, this isn't a statement on the merit, or morality of the statute, merely the statute as it exists.

He should ahve bought some politicians.
you cant get rich and not share with congress.

sorry dont buy the money laundering.

the worlds major banks were just "busted" for KNOWINGLY laundering major drug cartels money.. can anyone remember what happen to those CEOS?

Yes, I'm not agreeing in whole with those who think this count is entirely bogus, or that they can't possibly convict.  I do, however, think it's considerably weaker than the unambiguous failure to meet the statutory duty to file an SAR.  If they can prove the facts alleged (and just the emails quoted seem to do that), they have him dead to rights on that.

However, as to the money laundering count, not only does the government have more to prove, essentially a level of specific intent, but while some activity might arguably fall under some of the language of the statute, it falls mostly under the catch-all type language, sometimes ambiguously worded.  I think it would be a lot easier on that count to create a reasonable doubt about one or more of the elements of the offense, or for that matter to convince the court that the facts proven do not prove conduct sufficient to establish a violation of the statute.

It also might be worth a look at the standard jury instructions for this statute.  That, after all, is what a jury would consider, and depending on what they say, a jury might just say there's not enough here to convict this guy on this charge.

My SWAG is that this case pleads out to the lesser count.  Alternately, you might see a plea to some lesser included offense of money laundering, like these from the IRS (http://www.irs.gov/irm/part9/irm_09-005-005.html):


Aiding and abetting, false statements, illegal money transmitting business and structuring seem pretty apt.

I agree and the response wasn't only directed to you, it just happened I had the time to comment now. :)

I have indicated in other posts the failure to file a SAR is (at least based on the limited info we know) going to be nearly impossible to beat.  You likely know this but others might not, a SAR is for suspicious activity.  The theshold for reporting isn't "beyond a reasonable doubt", it isn't even a reasonable certainty that a crime has occurred, it is just suspicion.  The emails between Charlie and the conspirator as well as between Charlie and the rest of the company certainly paint a picture that Charlie was or should have been suspicious of the client.  I don't think a jury is going to believe that "a reasonable person" wouldn't see that the transactions (multiple per day, many times up to 10x over the limit, involving a middle man, using aliases, using multiple accounts, etc) wouldn't require filing a SAR. 

The bad news it the "lesser" charge is up to 5 years in prison and up to $25,000 fine per transaction (~1,000 txs made).  The prosecutor might let him take a reduce jail time but they are going to use the fines to financially destroy both Charlie and the company.  It will make a "great" headline ("Bitcoin company fined $25 million in money laundering charge") for a prosecutor looking to prove a point.


I agree.  The ML (with up to 20 year prison sentence) will likely be used as a "are you sure you want to take a risk with a jury?" card.  Fighting it would only make sense if you also thought you have a reasonable chance of winning on the lesser change as well.  If you don't then fighting in court over taking a deal means all risk and no "reward".

I think the operating an unlicensed money money transmission business is just garbage though.  In the NY hearing they even indicated that the exchanging of money for virtual currency may not even be covered under existing statutes and that the committee will likely need to use its emergency powers to expand the scope of its regulatory structure to bring Bitcoin exchanges in to it.  So it say "you weren't licensed in NY = bad" when NY isn't even sure you need to be licensed is just nonsense.  That being said our company doesn't do business with residents of NY (and CA and VA) for this exact reason.  The regulatory unknown just makes it too much of a risk.

ok so first mtgox gone then this incident   :-X
 
bitcoin is going to get down and down now   :(

Damn.  I forgot this thread existed for a minute and was hoping it was about Karpeles.

You've got that backwards.

First this incident (a month ago), and then MtGox gone.

If you have a thing for visiting Mtgox in Japan this is who you should look for

Lost your life savings? Lost everything??? visit the Office in japan Mtgox. this is who you should look for Founder/Ceo of MtGox

yeah the guy responsible for mtgox and shutting down the website and permanently shutting down your account.  "Means" you can't get it back unless government steps in and requires Mtgox to Reopen the website to return the money to everyone which i highly doubt the government will do. lol

http://www.youtube.com/watch?v=ZddzSC7AuAw