The operator of an exchange for the virtual currency Bitcoin has pleaded guilty to running an unlicensed money transmitting business.
Charlie Shrem from BitInstant.com admitted the charges in a New York federal court hearing.
Another Bitcoin trader, Robert Faiella, also pleaded guilty.
Both were arrested in January, accused of selling more than $1m (£603,000) in bitcoins to users of online drug marketplace the Silk Road.
The site was shut down last year and its alleged owner was arrested.
The two traders admitted the charges as part of a deal struck with US prosecutors in order to settle the allegations against them.
Bitcoin exchanges are services that allow users to trade bitcoins for traditional currencies.
Mr Shrem had been accused of allowing Mr Faiella to use BitInstant to purchase large quantities of bitcoins to sell on to Silk Road users who wanted to buy drugs anonymously.
The authorities said Mr Shrem was aware that the bitcoins were being used for such purchases, and therefore he was in violation of the Bank Secrecy Act.
The Act requires financial institutions in the US to alert authorities to any suspicious activity that may suggest money laundering is taking place.
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http://www.bbc.com/news/business-29072886Who were the victim?
No victim = no crime.
So , police should stop giving speeding tickets , right? Cause there are victims only when you run into somebody else.
Also , everybody should start their own shops without licenses or without paying taxes as probably there will no victims from this either.
Rather than arguing about how the law is applied change the law.
I agree with you that we do need rules in our society and it is appropriate to punish people who do not follow the rules. With that being said the government also needs to follow certain rules to make sure people have a fair chance in court when they are charged with a crime, and to follow rules regarding a person's "papers" (rules regarding search and seizure).
Regarding if Charlie apparently broke the rules, I would say yes, but only from a technical standpoint. He could have changed his behavior in a very minor way to stay in compliance with the law and the outcome of the transactions in question would not have changed.
Regarding the government following the rules, I would say they almost certainly did break them. Their getting access to the SR servers is questionable at best (they admit to not having a warrant prior to receiving the copy of the server). Also IIRC they had seized the servers of an email service that was marketed to TOR users, and some of Charlie's communications were from this service. I don't see the legal justification here to for the government to be able to read all of the emails on this email service without specific warrants that document probable cause.
The US Govt doesn't use logic concerning laws.
In the past 25 years, 210,000 marijuana-related arrests have been made in the state of Colorado alone. Of that number, more than 50,000 took place between 2006 and 2010. So now that Colorado has officially legalized the commercial sale and consumption of marijuana, how many of those people arrested for previous weed crimes will be let out of prison? Or, if they’ve already served their time, how many will have their marijuana crimes expunged from their records, making it easier to get a job?
The answer: Zero on all counts.
The United States is one of the only countries in the world that doesn’t guarantee what’s called “retroactive ameliorative relief” in sentencing. Meaning, when a law is passed to ease or eliminate punishments for a specific crime, those already convicted of that crime don’t necessarily receive the same relaxation or cessation of their sentence.
http://www.takepart.com/article/2013/01/02/no-relief-convictedThis is not the only thing that the US is alone in the way they operate. (overseas taxes is a big one).
My point wasn't so much that the law changed after the fact, but is rather that if Charlie had followed the law to the "t" then the same transactions would have happened, no additional reporting would have been given to the government about any of the transactions. The only real difference to the outcome is that bitinstant would have higher compliance costs.
I think that it would be hard to argue that "society" was a victim in this case.
