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.
 

How about you provide a legal cite when you say nonsense to one of the most informed lawyer on Bitcoin related issues.

Your post almost could be rephrased "I don't want it to be that way".  As a lawyer once told me, it doesn't matter what you think, the prosecutor thinks, or I think, it only matters what an old guy in a black robe thinks.  

http://en.wikipedia.org/wiki/United_States_v._Scheinberg
Non-US company with bank accounts in non-US countries, operating from non-US country was successfully shut down by the US "Justice" department and the help of foreign countries.   Over half a billion dollars forfeited as the proceeds of a criminal enterprise in violation of US law.   The only "US" aspect, they accepted players from the US.

Mr. Santori's conclusion is spot on as usual.  You might "get away" with it, if the US can't prosecute but you better be 100% sure your nation won't assist the US.  Full Tilt poker was "sure" and they ended up losing everything.

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.

The funniest part is that the "service provider" (aka ponzi provider) values itself at 4x the value of the money supply it is providing services for.  That would be like bitpay valuing itself at $50B or PayPal valuing itself at $80 trillion dollars. 

There is no arbitrage is you don't get access to your funds for 3 to 7 months.

Imagine a scenario where you sell 1 BTC on MtGox today for $1,000 and it is $900 on Bitstamp.  You finally get your funds out in July and the price on Bitstamp is now $1500, so you can buy back 0.67 BTC.  A 33% loss is not arbitrage.   A worse alternative is the exchange fails before your withdraw is processed and you never get your funds, a 100% loss.

There is no arbitrage opportunity without (near) real time movement of funds.

Fiat isn't leaving MtGox otherwise the spread would be decreasing. Fiat is STUCK and Bitcoins can (so far) be easily removed.

So Bitcoins are leaving the exchange which means the same amount of fiat chasing fewer coins and artificially driving the price up.  Of course this isn't anything new however the delays are now reaching 7+ months in some cases and it has been going on for almost a year now.  Nobody still thinks it is a short term problem or there is a fix right around the corner so the more bitcoins leave and the spread widens.

Please tell me how quantum annealing can break cryptography.

Hint: it can't

If it isn't decentralized then what prevents the central authority form simply giving himself 100,000 coins.  Trust that the issuer will never do anything wrong?

If peers can't cryptographically verify that the issuance is valid then what prevents someone from hacking the client to simply tell the network "um yeah this client here witnessed 10,000 logins so lets generate him some coins".  Trust that no user would dare give themselves extra free money?

Well if you want a virtual currency where you need to have absolute trust in the issuer the USD is a better choice.

Simpler answer.
Don't start by thinking about how people will use it properly, start by thinking how will people break/hack/manipulate/steal/dupe this system.   If you don't have an answer for that beyond "trust and hope" you don't have anything.   I am not saying give up, I am saying start there. 

Yes, but it was a request for clarification.  What they wanted clarified was clearly articulated in the original so my unsupported belief is that the request was merely a way to reset the clock and allow them to be compliant with their own rules.

How do you do this in a decentralized manner.  It is a non trivial problem.  That is why it hasn't been done.  There may not be a solution but if there is one it likely is radically outside the block. 

Saying something like "give someone x coins when they create a social media account" abstracts all the "problem" from the problem.  It would be like saying we need to go to the moon.  Step one we go to the moon. Step two we party because we went to the moon.

Making a centrally controlled virtual currency is trivial.  It is simply a ledger on a computer, and computers in the 1960s were good at crunching ledgers.  The fact that you put the ledger on multiple computers doesn't make it decentralized, if a single authority has the ability to change values in the ledger at will.   If you want a centralized virtual currency well just open a bank account.  Most of the dollars in the world exist only in cyberspace.  For all intents and purposes the dollar is a centralized virtual currency.

Now if you want a decentralized virtual currency well that is a lot harder.   When someone gets x coins for opening a social media account HOW EXACTLY do they get it?  HOW EXACTLY does the rest of the network verify that this issuance of new currency is valid?

There is no standard rate, it varies significantly from one processor to another and one merchant risk profile to another.  Walmart (massive volume, card present=swiped, low fraud rate) probably secures custom deals for an interchange below 1%.

On the other hand an adult services company (low volume, card not present, high fraud rate) can end up paying 10% or more.  Throw in the cost of anti-fraud screening, and the cost of chargebacks (getting hit with $35 chargeback fee when your average purchase is <$35 is going to hurt your bottom line), the true cost can approach 15% or more.

So when there is a Bitcoin movie in theaters ...

Thanks for the link.  I knew there had to be one.  The bad news is I already completed distribution but link definately saved for next time.

No they have a fair assurance who the cardholder is, which for millions of transactions totalling billions of dollars a year isn't the "purchaser".

Say a given merchant has a loss rate (due to CC fraud both third party fraud and so called friendly fraud) of 1% and pays 2% in CC fees.  If the merchant loses money to Bitcoin fraud but the loss rate is <3% the merchant's bottom line has improved.   Chasing a goal of zero fraud no matter how intrusive it is for the consumer isn't something merchants do with credit cards, why would they for Bitcoin?

There is a button labeled "fork".  Fork the QT client repo to one you control and you can do whatever you want with it.  

Now if you are asking how to you convince millions of people to download your client over the one they already know and trust ... well that is a different non-technical problem.  Convince people you are trust worthy.

Are there any press release distribution companies which accept Bitcoins?

I always like to spend real money when I can.  I doubt it but I thought I would ask before using a company which only accepts dead presidents.

Number theory as it relates to Bitcoin = on topic.
Number theory in general = off topic.

Pretty easy to understand.

"This" happens on all boards of any size.  The reality is most people are lazy.  They don't take the time to educate themselves on where threads should go.  The forum probably needs more moderators.  The post volume is at an all time high.   

An interesting experiment would be a fine/reward system in micro amounts.  Post in the wrong forum and it has to be moved you are charged 2,000 satoshis.  Help a moderator out by reporting a violation you receive 500 satoshi reward.  Waste the moderator's time by reporting something valid lose 1,500 satoshis.  Something like that.

Of course you did help the mods out and clicked the report to moderator link on those posts which made you angry?  Right?