This.  Are you actually trying to explode our bladders?

What a horribly written document.  Of course, most documents written by police are.  The facts alleged here, though, are that they arranged a meet with this guy where they told him they were going to use Bitcoin to buy stolen credit card numbers from Russian criminals.  In other words, he knew the purchase was going to go toward criminal activities.

Seriously, people, anyone who ever sells Bitcoin, if someone tells you something like that, tell them to GTFO.  That person is either an idiot or a cop.


And this sting used exactly the same rationale.  The undercover officer told the suspect he intended to purchase stolen credit card numbers with the Bitcoin.  That doesn't sound very smart to me.  Anyone who hears that and then goes ahead with it anyway is at best aiding and abetting.

I suspected there was more to this than just selling Bitcoin.  The worrisome aspect is if this ends in something other than a plea deal, it might set a bad precedent that selling Bitcoin does, in fact, constitute "money transmittal."  I think buying Bitcoin, if done as a business, might, because you'd actually be delivering money.  Someone selling Bitcoin, though, is just selling a commodity, more like someone selling stuff on Amazon.

In a normal case of entrapment, everyone involved knows the product is illegal.  Bitcoin is not illegal.

Unless there's more to this than just selling Bitcoin, which is a commodity, not a recognized form of money that goes through the banking system, this would be setting people up for something they had no reason even to believe was illegal, because this is a completely novel interpretation of the law.

Assuming, that is, that there is nothing more than selling Bitcoin involved here.

I wouldn't jump to conclusions from the sparse facts in these news stories.  I'd like to see the actual complaints.  The media often gets things completely wrong.  One story, for instance, claims they're using the state equivalent of the statute used on Charlie Shrem, but doesn't actually say which statute (there are two charges in that complaint) or what part of it, or what they're actually alleging other than that people sold Bitcoin.

Having read the complaint in speed read mode, one thing jumps out that may make it a dud.


So far, so good.  They set up that they made it clear from the outset that time was a critical consideration for them.

 [Emphasis added by me.]

The only way I can read this is the BFL representative explicitly disclaiming any guarantee of delivery date.

The complaint also cites a number of advertisements and other to the public communications of BFL which are, indeed, deceptive.  However, I would think a person-to-person communication with the company in the course of establishing an agreement would supersede anything said in advertisements, especially when even the advertisements essentially are stating aspirational goals, and not making explicit promises.

I'm not saying the whole suit is a dud, but they certainly led with a dud.

Also, a simple style complaint.  I don't like the use of "on information and belief" in factual allegations that should have been fairly easy to determine before filing suit.  Federal court does not require verified complaints (except in a few specific instances), but saying "on information and belief" is almost outright saying you doubt the fact yourself.  Yes, it's used a lot.  And this is just a personal opinion, I think it looks weaselly and should be avoided wherever possible.  Make sure your facts are correct to the best of your ability, and then if you can do that, say it loud and proud and without qualification.

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:


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

I guess I should look into this.  I hope it's not another example of hard cases making bad law.  Considering that the people supposed to obey these laws are held to their strict letter, it's somewhat perverse that prosecutors can get a court to do what seems like bending the law in favor of the government when it's vague.  It seems like they may be ignoring the general rule of lenity that is supposed to interpret ambiguous federal statutes in favor of the defendant.

The fact this is in the D.C. Circuit is also worrisome, because it is one of the more draconian circuits as far as criminal cases go.  At least, the damage would be limited to that circuit to some extent if other circuits disagree.  I'm not sure how seriously D.C. Circuit is taken on specifically financial crimes cases.  I'd imagine the Second (containing New York) or the Ninth (containing California and Silicon Valley) have more expertise in these areas.  There, I'm just speculating, though.

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.

It is rather tricky to prove something like expectation damages, that is, a form of damages caused as an incidence or consequence of one party's failure to carry out a contract.  Unlike explicit terms in a contract, though, these are damages resulting from what both parties could reasonably expect to be the result of a failure to carry out the contract.  Like all contractual damages, they are meant to put the party breached against in the position he would have been in had the contract been carried out.

In this case, this is likely to require expert testimony to prove.  The plaintiff would probably want to argue from historical data, because this is likely to give the best numbers.  BFL would, presumably, argue that you can't just assume that it would have been only the plaintiff who would have got mining equipment had they shipped on time, but that in fact, had they shipped on time, the difficulty rate would have spiked a lot sooner and the plaintiff would have made less.

While expectation damages are a well established principle of law, it is also a fact that courts often do not like awarding them, because they require a lot of speculation and argument.

It might even allow for a larger award to argue, simply, that had the contract never been entered and the plaintiff simply kept the Bitcoins, or purchased comparably expensive equipment from a less scummy operation that delivered closer to their stated ship-by date, they would have made X, but that they reasonably relied on BFL's promises.  That's a detrimental reliance claim.

IMO, BFL has a scummy, but interesting defense (at least to a detrimental reliance claim).  They could argue that even by the point in time the plaintiff purchased, BFL were such notorious liars that nobody could possibly *reasonably* rely on anything they said.  Cheeky but it might work.  (Usually, though, you aren't allowed to prevail with a legal argument based on your own misconduct.)

Never liked late registration.  Always just viewed it as a way to get rid of overlays, and don't see how it advantages players in the least.  I suppose if there's no overlay, someone who doesn't care enough to show up on time might be slightly more likely to be dead money, but that seems a marginal benefit at best.  Even without an overlay, I'd rather have certainty as to what size the prize pool is, etc., right when it starts.

Apparently, there's a brief time window where the transaction is being processed and it temporarily disappears from the pending transaction list right before being processed, and I just happened to check it at exactly that time.

Anyone else having any problems with cashouts?  I tried to cash out about 100 chips last night, and 16 hours later, it not only has not showed up in my Bitcoin account, but the money is gone from my account and it isn't even listed on pending transactions.

What's going on?

Well that's sure a great way to inspire confidence.  I know I'm impressed.

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.

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.

Quoted for truth.

This is what basically needed to happen before someone would bring a case.  Because the stakes really do have to be in the millions before it makes sense to try to prosecute a case based on unprecedented legal claims and highly technical factual claims requiring expert testimony.

Hey, some lucky expert witnesses stand to make a load of bucks on this whatever way it goes.

I just hope they make sure that there are actually assets to collect from the scam operation BFL.  If they aren't total idiots, they have already absconded with them.  But look at them on this thread, Josh and the rest.  They certainly look like total idiots to me.

Last time it was no password.  It's still worth listening to some of Micon's bullshit for it, though, because if there is a password and you don't get it, nobody will give it to you and they will instead troll the shit out of you in lobby chat giving you bogus passwords.

Including me.

Yeah, I know, childish as hell.  But it's fun.

So you mean a politically-motivated group is gathering together to edit Wikipedia?  Horrors!  Surely this has never happened before!  And if it had, I certainly would never have been personally involved on one side of warring editing factions.

How is this even news?

Seriously, though, the guy who ordered a Bitcoin pizza way back when wasn't making fraudulent claims about a product that was supposedly going to be delivered in a couple weeks. 

That guy was an innovator, in that he was one of the first people who used Bitcoin for its actual purpose, that is, as currency.

"640K ought to be enough for anybody!"  Bill Gates.