Bitcoin Forum

I'm seeing a lot of knee-jerk reactions posted about this news.

How many people actually read the entire criminal complaint word-for-word before they made a related post?

It's pretty interesting and easy to read.
http://www.scribd.com/doc/202555785/United-States-vs-Charles-Shrem-and-Robert-M-Faiella

Nope I didn't. But when I'm bored or have some free time I'll check it out.  I'm not a lawyer or criminal expert so personally I don't really care what it says nor would I pretend to understand all of it.

Also it wouldn't change my opinion on the situation.  Although I think the war on drugs is wrong,  if it's true that someone knowingly selling bitcoins on an illegal black market site to be used for buying/selling drugs/other illegal things then I still think that person should be held accountable in accordance to the law even though I don't agree with current drug laws.  I don't know if he is innocent or guilty and I will leave it up to courts and jury to come to that conclusion after they've seen all the evidence and heard all the arguments from both parties.

Although it's bitcoin related. I don't consider this much of a bitcoin issue... just an issue of someone allegedly breaking the law.  Just like I don't consider other crimes related to us dollars or other currencies, simply people allegedly breaking laws.

"I'm not a lawyer or criminal expert so personally I don't really care what it says nor would I pretend to understand all of it."

People gave this same reason for not reading the whole DPR criminal complaint.

These things are written in an extremely clear manner for everyone to understand.  There's no legal jargon at all.  It clearly tells the government's story of what lead up to the arrest.

Here's the part where he really messed up:

a.    On February 22, 2012, after SHREM had resolved a problem with one of "BTCKing's" orders, the following exchange occurred between them:

     i.   SHREM told "BTCKing," "I just want to let you know, I take care of you bro."


BIG MISTAKE.  Don't bro someone you don't know!

You should probably read the complaint what with it being about something completely different than you assume it is.

I read the whole thing. He deserves it if the complaint is true and complete

Read it. My opinion, they were asking for it, acting like guys in a ticket booth in front of a drug warehouse - "Buy drug coupons everybody!" And on top of it all had large income and avoided taxes.

But here comes the crowd shouting "It's an attack on bitcoin! They are comming for us all!"

If he really did all those things then he deserves it.

Die, scribd, die. I kills you with fire.  Scribd is the bane of the interwebs.

Here, get a real PDF from DOJ's obnoxiously-long link:

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

I'm about halfway through it.  Conclusions so far:

a) It is hilarious that the DOJ copied their FAQ which says, literally, "I want to launder a huge pile of funds!".

b) It is weird that they go out of their way to not refer to MtGox by name, instead referring to "a third-party bitcoin exchange in Japan" (c'mon who are you fooling)

c) Charlie has some pretty ass-awful OPSEC.  Damn, dude.

I read it, but what are the knee-jerk reactions?

Some random guy getting arrested is irrelevant to me and it should be irrelevant to all crypto users, what I'm worried about is when a country actively tries to do something about Bitcoin like Russia seems to be doing now.

Arresting prominent members of a movement for things that others (HSBC, cough, cough) get away with on a daily basis should worry you.  Indeed, that is the most effective way for them to "do something about Bitcoin".  For every Shrem they jail another hundred are scared out of being publicly involved.

Since you mention Russia, this is exactly how the USSR held the satellite states in orbit (tanks only rolled twice).  Check out the CNN 12-part documentary someday.  "So and so of the [opposition] peasant party" would simply find themselves in jail before they could get elected.  Pretty damn easy to win elections with that trick up your sleeve.

I went ahead and read the whole thing.

1) Shem was clearly doing shady work with a shady duded that sold bitcoin to druggies on silk road
2) Shem was clearly aware that what he was doing was shady
3) The Faiella dude was clearly aware he was being a creep

But lastly I decided that governments suck as they pay people thousands of dollars to spy on you and find reasons to put you in jail, primarily because they want as much of your money as they can get.

I read the whole thing, Shrem is an idiot since the emails basically show him knowingly ignoring AML laws for someone he knew was doing $20K a day in exchanges and even advising the guy on how to avoid being flagged by other companies. 

Yeah this guy doesn't seem too smart, especially seeing some of his other interviews.

Exactly！

he had millions of USD and did this - so stupid  ::) . he could lay in the carabian sun for the rest of this life - now the sun will be a fluorescent lamp.

I just read it and its still bullshit.

-There are no money transmitting LAWS that apply to bitcoin. For that to be the case, Congress would have had to write bitcoin legislation since its 2009 - it hasn't. Title 31 wasn't about bitcoin when it was written and it still isn't. Trading money for bitcoin is no more illegal than trading money for sandwiches.

-This is all just political theater by the Freemason fag-douchebag troupe. Shrem is actually in on it - I guess to give him "street-cred". They timed it for just before a hearing on virtual currencies. Its not a coincidence. The chorus of agents chiming in on this forum is part of the ruse.

-The Silk Road allegation is ridiculous, as they can't be held responsible for how people spend their bitcoin anymore than a bank teller can be held responsible for how someone spends cash.

This is all meant to SCARE YOU. Is it working?

Good, citizen! Follow your orders.

Money laundering is laundering no matter what medium you use.

Thanks good read

Read whole document. It's pretty simple.

1. Charlie Ignored his own company's AML policy and didn't notified US Govt because he was getting good gains from deals with BTCKing guy.

2. Charlie knew BTCking was selling coins on silkroad and used his company to receive cash from silkroad users, He banned BTCking's email and asked him to make a new once to continue his reselling services on silkroad. When Other co founder asked him to ban btckin, charles defended btcking and said "we make good profit from him".

all i did was read this:  http://www.vocativ.com/12-2013/night-bitcoin-millionaire-proud-stoner-charlie-shrem/

and realized we should have been hangin' out months ago.

#JewishBitcoinScarface

They'll use this is court if they find it

Unlikely, what with New York possibly legalizing MJ soon.

What a pile of drivel. Nobody in their right mind would produce that much repetitive text.

Infact, it reminded me why bitcoin was created in the first place

NY might be legalizing it? How soon? I wonder if there's any way it'll ever get legalised federally.

Do you need to read every single law in the US to know that most of them violate human rights?

I think that bank tellers do have a burden of responsibility to make sure that the person they are giving 20k in cash is not a drug dealer or terrorist. If they think you are, or might be, they go and get a manager, who then might ask more questions.

The only thin Shem did wrong is that he was arrogant and stupid.

That may or may not be true (IANAFPOSL) depending in part on whether you believe that the letter of the original law and the endlessly building and changing regulations is all that matters.  But, you if were alive in the 80s when they erected these "anti-money laundering laws" (AMLs), coining the phrase "money laundering", they promised, so help them God, that they would only use them to pursue "drug kingpins".   I ask the very simple question.  Is Shem a "drug kingpin"?

If you are not "laundering" money you earned sellings drugs, then what evil are you committing?  

That said, I have not yet, but plan to read the complaint.  

Man, Shrem sure screwed Gareth it looks to me like.  What a worm.

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.

After reading the complaint, I get the feeling that the unnamed co-founder of bitinstant (Gareth Nelson?) remains unnamed as he is a testifying witness?

that make any sense?

I am not at present a witness in this case

Well that answers that!

Is there anything you can add to the story? Or you cant talk about it?

I can not add anything further for legal reasons

No worries Gareth. Good luck to ya.