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Author Topic: Michigan Man Charged for Unlawful Bitcoin Exchange  (Read 87 times)
sanjeev.lamani@
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October 28, 2017, 06:47:40 AM
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A Michigan man has been charged with running an unlicensed money transmitting business after selling nearly $150,000 in bitcoin online.

According to an indictment released by Detroit TV news services WD-IV Friday, 52-year-old Bradley Anthony Stetkiw ran an exchange through the LocalBitcoins website, conducting transactions at restaurants in the Bloomfield area. Stetkiw is alleged to have sold bitcoin as part of a business venture for approximately two years, at a volume that would make him subject to federal anti-money laundering regulations.

Of the total, the documents, filed with the U.S. District Court for the Eastern District of Michigan, assert Stetkiw sold more than $56,000 worth of bitcoin to federal agents through six meetings.

According to the indictment:

"Operating under the user name 'SaltandPepper,' Stetkiw bought, sold and brokered deals for hundreds of thousands of dollars in bitcoins while failing to comply with the money transmitting business registration requirements set fort in Title 31, United States Code, Section 5330."

Stetkiw is notably not the first LocalBitcoins user to be charged for trading bitcoin.

Earlier this year, Detroit resident Sal Mansy plead guilty to the charge of operating an unlicensed money services business. He allegedly conducted $2.4 million-worth of transactions over a two-year period ending in July 2015.

Other arrests in Missouri and New York suggest actions against independent U.S. bitcoin sellers are becoming more commonplace.

https://www.coindesk.com/michigan-man-charged-unlawful-bitcoin-exchange/
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October 28, 2017, 06:53:37 AM
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That is what their laws are, so it should be obliged if you don't want to get into some serious trouble. Being busted by the feds is the main reason why exchanges comply with KYC/AML regulations for them to continue offering their exchange services to people. It's kinda scary to think that person-to-person exchanges of bitcoin/fiat is already a criminal offense due to AML regulations. The government really wants to control people in what their doing and ensure that they still monitor people's spending closely even if they're using bitcoins.

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October 28, 2017, 09:43:35 AM
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Maybe LocalBitcoins should start warning traders of they're in a jurisdiction with potentially hostile law enforcement.  I suppose that these laws about money transfer businesses have existed for longer than people have been trading Bitcoin peer-to-peer in the US.

It was pretty much a disaster waiting to happen.  LocalBitcoins doesn't need to force people to comply to these laws - that's the police's job - but they could at least make sure that the major traders are aware of them so that they can act accordingly if they're intending to run a legal business.

All the major exchanges have serious KYC/AML procedures so sooner or later it was inevitable that the US government (and some other governments) were going to crack down on P2P trading eventually.

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