CEO OF BITCOIN EXCHANGE ARRESTED

[tvbcof]

I'll bet that the song which Shrem can sing will give a fair number of folks the shivers.  This in particular since pretty much any TCP/IP packet than anyone has sent/received since the first block was mined can be pulled back out of the ether.  And can be used in a court of law if the stream can be sufficiently laundered.

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[Fallen666]

So much for Bitcoin as money loundering tool. We are talking about a million which is almost nothing and you still get traced.

the complaint filed referenced 1mill+

Still less than what cartels or other big criminal organizations needs to launder every hour.

[amadaeus]

This will not effect bitcoin in the long term.

"Truly innovative business models don't need to resort to old-fashioned law-breaking, and when Bitcoins, like any traditional currency, are laundered and used to fuel criminal activity, law enforcement has no choice but to act."

Personal opinions on the war on drugs aside, he left himself open for this. Allegedly he knowingly facilitated transactions in an effort to launder money, regardless of the currency. During court the evidence will show whether this is a true allegation or just a smear campaign.

There is no surprise that the US government would aim to arrest those who helped facilitate the silk road, none.

As far as the double standard with banking goes, it IS bullshit, but bears no weight on this specific case. I'm sure HSBC spent a lot of time, money and effort to cover their ass, and Shrem will probably cooperate and facilitate a further investigation and get out with hefty fines, a very brief all expensive paid vacation to upstate new york, and a smeared reputation.

But the bright side, if the government holds a decent amount of bitcoin, will they not protect their investment? Maybe that's just the optimist in me.

[Phinnaeus Gage]

http://www.forbes.com/sites/andygreenberg/2014/01/27/winklevoss-funded-bitcoin-startup-ceo-arrested-in-silk-road-investigation/

Messages dug up between Shrem and Faiella tell a different story. “We know you are violating our Terms of Service and we know you are reselling on the Silk Road. This is illegal,” Shrem wrote to BTCKing in January of 2012. But even then, and despite several conversations with a BitInstant co-founder who asked Shrem to ban BTCKing, Shrem is accused of continuing to process his transactions. (The indictment also alleges that Shrem himself bought pot brownies from a Silk Road vendor, as further evidence that the understood the illegal uses of the site.)

Hate to say it, but I believe this probe is much, much deeper, and expect more arrests by spring, throwing an iconic enterprise into a tailspin.

[turtoro]

So much for Bitcoin as money loundering tool. We are talking about a million which is almost nothing and you still get traced.

the complaint filed referenced 1mill+

Still less than what cartels or other big criminal organizations needs to launder every hour.

a mill+ ranges from 1mil to 1000000000000~ mill

[Bitware]

Just like with that silk road dude. Stupidity did him in. Sorry, Charlie.

[turtoro]

This will not effect bitcoin in the long term.

"Truly innovative business models don't need to resort to old-fashioned law-breaking, and when Bitcoins, like any traditional currency, are laundered and used to fuel criminal activity, law enforcement has no choice but to act."

Personal opinions on the war on drugs aside, he left himself open for this. Allegedly he knowingly facilitated transactions in an effort to launder money, regardless of the currency. During court the evidence will show whether this is a true allegation or just a smear campaign.

There is no surprise that the US government would aim to arrest those who helped facilitate the silk road, none.

As far as the double standard with banking goes, it IS bullshit, but bears no weight on this specific case. I'm sure HSBC spent a lot of time, money and effort to cover their ass, and Shrem will probably cooperate and facilitate a further investigation and get out with hefty fines, a very brief all expensive paid vacation to upstate new york, and a smeared reputation.

But the bright side, if the government holds a decent amount of bitcoin, will they not protect their investment? Maybe that's just the optimist in me.

+1


on a side note, Antonopoulos will be discussing this and BTC in general on joe rogan today, 3 pm pacific:
http://www.ustream.tv/joerogan

[Bobsurplus]

Charlie was no fool, he's just to young!

[pungopete468]

If you knowingly facilitate the commission of a crime you have to expect that you risk facing consequences as a result...

The key to this is that he allegedly knew that the coins were being used for illegal activities... It makes no difference if it's Bitcoins or Dollars, you can't knowingly break the law without risking your freedom.

It's no big surprise.

That's why all the voters in America are criminals. They constantly vote for crime-lords in Government offices, who don't obey their Oath of Office to uphold the Constitution.

We're getting our freedom taken away as a result. Things like Bitcoin happen to be extending our freedoms a bit, and for a time.

I agree, Americans have been made criminals by rampant legislation. You have a choice to break the law but you can't expect to be safe in doing it.

I don't believe the votes in America mean anything; who remembers the Florida recount? How far off was the count?

We made our bed and now we sleep in it. I hope this generation and the next can bring us back to the Constitution.

[Phinnaeus Gage]

Just like with that silk road dude. Stupidity did him in. Sorry, Charlie.

Bitcoiners should take lessons from this guy on how to weave in and out of a crowd conducting bitcoin transactions without being noticed: https://www.youtube.com/watch?v=-FFe_42TpiY&src_vid=qFHbXSnNkXU&feature=iv&annotation_id=annotation_3965703473

[greyhawk]

Just like with that silk road dude. Stupidity did him in. Sorry, Charlie.

Bitcoiners should take lessons from this guy on how to weave in and out of a crowd conducting bitcoin transactions without being noticed: https://www.youtube.com/watch?v=-FFe_42TpiY&src_vid=qFHbXSnNkXU&feature=iv&annotation_id=annotation_3965703473

Nice tutu, Phinn.

[Mike Hearn]

I'm sure HSBC spent a lot of time, money and effort to cover their ass, and Shrem will probably cooperate and facilitate a further investigation and get out with hefty fines

I don't think so.

It's easy to misunderstand what happened with HSBC.

The majority of what HSBC was accused of was about not doing enough to detect and block Mexican drug cartels laundering money. Note "not doing enough".

Shrem is accused of something entirely different - not just doing an insufficient amount of work, but knowingly co-operating with someone he knew was a Silk Road dealer explicitly to help him launder money. It's the "knowingly" part that makes the huge difference.

The US DoJ did not seem to have large piles of emails from the head of compliance at HSBC showing him buying drugs and helping known dealers to evade his own controls. With BitInstant they do.

It's really no wonder Bitcoin businesses can't get bank accounts, when guys like Shrem were putting on a respectable face and doing that kind of thing behind the scenes. Silk Road and those involved with it are by far the most damaging thing that could ever have happened to Bitcoin, especially so early on.

[QuestionAuthority]

Charlie was no fool, he's just to young!

The only problem with youth is the arrogance of invincibility. Old and young alike can be intelligent, well educated and experienced in their field of study. Age brings wisdom only because you begin to understand your limitations and that their may be someone out there in the ether that knows more than you do.

[whtchocla7e]

They said scam. What is the scam? See Charlie is a businessman first probably saw this as a great opportunity and now it bite him in the ass.

I feeling this will just make him hungrier when he gets out.

Did they say they got is bitcoins I doubt they did, I pretty sure he had high security.

STAY STRONG CHARLIE

I would like to nominate Charlie for the ambassador of Bitcoin when get gets out.

[JakeThePanda]

Next stop all the illegal gambling sites

That's so 2011.  Preet has been there and done that.  Google FullTiltPoker and Pokerstars.

[TitanBTC]

I'm sure HSBC spent a lot of time, money and effort to cover their ass, and Shrem will probably cooperate and facilitate a further investigation and get out with hefty fines

I don't think so.

It's easy to misunderstand what happened with HSBC.

The majority of what HSBC was accused of was about not doing enough to detect and block Mexican drug cartels laundering money. Note "not doing enough".

Shrem is accused of something entirely different - not just doing an insufficient amount of work, but knowingly co-operating with someone he knew was a Silk Road dealer explicitly to help him launder money. It's the "knowingly" part that makes the huge difference.

The US DoJ did not seem to have large piles of emails from the head of compliance at HSBC showing him buying drugs and helping known dealers to evade his own controls. With BitInstant they do.

It's really no wonder Bitcoin businesses can't get bank accounts, when guys like Shrem were putting on a respectable face and doing that kind of thing behind the scenes. Silk Road and those involved with it are by far the most damaging thing that could ever have happened to Bitcoin, especially so early on.

I'm with you, Mike.  The evidence that they claim to have indicates that Charlie knew what he was doing and allowed his own personal pro-drug bias to influence his business decisions. 

[Phinnaeus Gage]

Next stop all the illegal gambling sites

That's so 2011.  Preet has been there and done that.  Google FullTiltPoker and Pokerstars.

The two main sources of my income back in the day, along with being a poker whore chasing deposit bonuses on the various other sites. After its demise, I had to get my hands dirty once again to earn a living, eventually getting back into moving barn wood, of which I truly love, but now conflicts with Bitcoin while back online. I used to live at Sam's Town in Tunica. virtually free with all the food I could eat, for two whole years while playing and propping poker, but tired of that grind on the felt.

Apologies for the aside.

~TMIBTCITW

[HELP.org]

I'm sure HSBC spent a lot of time, money and effort to cover their ass, and Shrem will probably cooperate and facilitate a further investigation and get out with hefty fines

I don't think so.

It's easy to misunderstand what happened with HSBC.

The majority of what HSBC was accused of was about not doing enough to detect and block Mexican drug cartels laundering money. Note "not doing enough".

Shrem is accused of something entirely different - not just doing an insufficient amount of work, but knowingly co-operating with someone he knew was a Silk Road dealer explicitly to help him launder money. It's the "knowingly" part that makes the huge difference.

The US DoJ did not seem to have large piles of emails from the head of compliance at HSBC showing him buying drugs and helping known dealers to evade his own controls. With BitInstant they do.

It's really no wonder Bitcoin businesses can't get bank accounts, when guys like Shrem were putting on a respectable face and doing that kind of thing behind the scenes. Silk Road and those involved with it are by far the most damaging thing that could ever have happened to Bitcoin, especially so early on.

Hopefully Theymos, BFL, TradeFortress, and the members of the Foundation who are involved with them will be next.

[QuestionAuthority]

I'm sure HSBC spent a lot of time, money and effort to cover their ass, and Shrem will probably cooperate and facilitate a further investigation and get out with hefty fines

I don't think so.

It's easy to misunderstand what happened with HSBC.

The majority of what HSBC was accused of was about not doing enough to detect and block Mexican drug cartels laundering money. Note "not doing enough".

Shrem is accused of something entirely different - not just doing an insufficient amount of work, but knowingly co-operating with someone he knew was a Silk Road dealer explicitly to help him launder money. It's the "knowingly" part that makes the huge difference.

The US DoJ did not seem to have large piles of emails from the head of compliance at HSBC showing him buying drugs and helping known dealers to evade his own controls. With BitInstant they do.

It's really no wonder Bitcoin businesses can't get bank accounts, when guys like Shrem were putting on a respectable face and doing that kind of thing behind the scenes. Silk Road and those involved with it are by far the most damaging thing that could ever have happened to Bitcoin, especially so early on.

Hopefully Theymos, BFL, TradeFortress, and the members of the Foundation who are involved with them will be next.

I like to play devils advocate but that seems a little extreme. BFL and TradeFortress scammer would be nice but TBF and the admin of the main forum would probably hurt Bitcoin a little. You do understand that TBF members are most of the businesses that make Bitcoin what it is today, right?

[Trance]

CEO OF BITCOIN EXCHANGE ARRESTED

The CEO of BitInstant, a Bitcoin exchange, has been arrested at JFK airport and charged with money laundering.

Charlie Shrem, along with a co-conspirator, is accused of selling over $1 million in Bitcoin to Silk Road users, who would then use them to buy drugs and other illicit items.

"Hiding behind their computers, both defendants are charged with knowingly contributing to and facilitating anonymous drug sales, earning substantial profits along the way," DEA agent James Hunt said in a release.

Shrem is a vice chairman at the Bitcoin Foundation. He is listed as a speaker at a Bitcoin conference in Miami that ended Sunday.

Shrem is believed to own a substantial amount of Bitcoin.

Read more: http://www.businessinsider.com/report-ceo-of-major-bitcoin-exchange-arrested-2014-1#ixzz2rcQNGOtj

I'm sure he will barter his way out! He will prob just release names and pay his way through the case