CEO OF BITCOIN EXCHANGE ARRESTED

[moolahadam]

So if walk into a bank and get a loan and use that money to buy drugs even though the bank has no idea that I'm going to use it for drugs the feds will arrest the CEO if I get caught and they find out where I got my money?  This case has no merit whatsoever.  The feds are just trying to scare people like they always do.

[1714822706]

1714822706

[Minor Miner]

So if walk into a bank and get a loan and use that money to buy drugs even though the bank has no idea that I'm going to use it for drugs the feds will arrest the CEO if I get caught and they find out where I got my money?  This case has no merit whatsoever.  The feds are just trying to scare people like they always do.

you need to learn how to read and analyse.   Read the story NOT the headline.
AND YES, if you walk into Chase bank and withdraw a bunch of money and tell Jamie Dimon it is so you can buy some drugs (or help others buy drugs) and Jamie Dimon says "cool dude" and then Jamie Dimon FURTHER tells you how to circumvent Chase's compliance infrastructure so you can CONTINUE to do this, THEN THE CEO OF CHASE BANK WOULD BE THE ONE ON A PERP WALK.

[darkmule]

So if walk into a bank and get a loan and use that money to buy drugs even though the bank has no idea that I'm going to use it for drugs the feds will arrest the CEO if I get caught and they find out where I got my money?  This case has no merit whatsoever.

You obviously have no clue what the case actually is, because what you said has zero resemblance to it.  The case is not that he had "no idea" that anyone was using this for drugs, but that he knew damn well that it was for drugs and deliberately assisted in covering it up.

If they can actually prove what they claim, it's a no-brainer slam dunk case.  Now that's a big "if," but that's what their actual case is, not your straw man.  You could try, I dunno, actually reading the complaint [pdf at the bottom warning DOJ site if you avoid those scary places].  Not like it hasn't been repeatedly posted to the thread already.

[jballs]

I would rather he just OD'd and took himself out of the gene pool than justify all the disgusting human behavior that prohibition creates.

You will pay the price for your comments.

Take it personal if you want I have plenty of drug addict relatives myself, hell we all do don't we?

No, I don't. And anyway this doesn't give you the right to offend other people's feeling. Ignore list.

Really? No alcoholics, no cigarette addicts (that one is brutal), no prescription drug users (you know for the "fibromyalgia"), no morbidly obese who can't stay out the buffet ot the fridge at 2am?

Maybe you're of the Amish online community. Fine, the rest of us have drug addict relatives, or are or have been addicts ourselves. You want to criminalize some addicts and turn them into a feedlot profit center and cheer on the jackbooted thugs kicking doors in, that offends me.

That my country would tolerate this for one second "because drugs m'kay" grossly offends me:

http://benswann.com/new-mexico-police-force-enemas-anal-cavity-searches-on-drivers-pulled-over-for-minor-violations/

That any country has to endure THIS because someone's little brother can't be spared the hazard of making his own fucking decisions in life-

http://bitterqueen.typepad.com/friends_of_ours/2013/08/beheaded-remains-of-thirteen-kidnapped-mexican-youths-found-in-mass-grave.html

This?

http://latino.foxnews.com/latino/news/2012/11/01/mexican-daily-nearly-60000-drug-war-deaths-under-calderon/

This offends me,  yes it does. If it does not offend you, may want to rethink your values. None of this is caused by drugs. It is caused by prohibition and the profits it generates.

[whtchocla7e]

So if walk into a bank and get a loan and use that money to buy drugs even though the bank has no idea that I'm going to use it for drugs the feds will arrest the CEO if I get caught and they find out where I got my money?  This case has no merit whatsoever.  The feds are just trying to scare people like they always do.

Your example makes no sense whatever.

The bank doesn't know what you're going to do with the money.

Charlie knew where the money was going and he knew The Silk Road was no mail-order gardening supply store... Ya'll need to stop acting stupid.

It's cool to dislike the gov't but Bitcoin needs to cut itself off from people like Charlie.

[tinus42]

AND YES, if you walk into Chase bank and withdraw a bunch of money and tell Jamie Dimon it is so you can buy some drugs (or help others buy drugs) and Jamie Dimon says "cool dude" and then Jamie Dimon FURTHER tells you how to circumvent Chase's compliance infrastructure so you can CONTINUE to do this, THEN THE CEO OF CHASE BANK WOULD BE THE ONE ON A PERP WALK.

Doubt that would happen. That guy is pretty much above the law. As are the top execs of the other TBTF banks. HSBC only got fined for far worse money laundering of drugs money.

[jballs]

AND YES, if you walk into Chase bank and withdraw a bunch of money and tell Jamie Dimon it is so you can buy some drugs (or help others buy drugs) and Jamie Dimon says "cool dude" and then Jamie Dimon FURTHER tells you how to circumvent Chase's compliance infrastructure so you can CONTINUE to do this, THEN THE CEO OF CHASE BANK WOULD BE THE ONE ON A PERP WALK.

Doubt that would happen. That guy is pretty much above the law. As are the top execs of the other TBTF banks. HSBC only got fined for far worse money laundering of drugs money.

+1

At the height of the Colombian drug trade before the Escobar takedown and the rise of the Mexican cartels, the Federal Reserve had an "anonymous" window at the Colombian central bank where anyone could bring US dolllars in any amount and convert them to local currency. The sole purpose was to repatriate dollars back to the US financial system, because so much drug cash was ending up down there. The Fed opened an official money laundering channel that operated for years.

Also NYSE chairman Dick Grasso personally travelled to the jungle to meet with the leaders of FARC, narco terrorists, to persuade them to make US investments with their assets.

HSBC is just the most recent example of business as usual. No banker has done a perp walk for money laundering since the 1980's when there was still some shred of true intent behind the drug war. Now it is all about profit for the monopoly that controls it. The banks and cartels and enforcement are all working together now, all you have to do is follow the $$$.

Sources

http://lexisnexis.co.nz/riskandcompliance/podcasts-interview-bob-mazur-part2a

http://www.scoop.co.nz/stories/HL0202/S00069.htm

http://www.thenewamerican.com/world-news/north-america/item/17396-u-s-government-and-top-mexican-drug-cartel-exposed-as-partners


Stop the madness...

[mainline]

Sure, the bankers are criminals just like your d00d.  They're simply better at what they do, and don't get pwnt.
Crime, like everything else in life, must be done right to be successful.
Your d00d was doing it wrong.
Doesn't make him innocent, simply bad at what he does.
Not sure what all the commotion is about.

[jballs]

Sure, the bankers are criminals just like your d00d.  They're simply better at what they do, and don't get pwnt.
Crime, like everything else in life, must be done right to be successful.
Your d00d was doing it wrong.
Doesn't make him innocent, simply bad at what he does.
Not sure what all the commotion is about.

The commotion is who decides what is a crime. I gather you miss the point, though i will accept yours as a matter of pragmatism. He was stupid, silk road was stupid, we would all be better off if the laws were changed and a large segment of the population of the world was decriminalized.

[mainline]

Sure, the bankers are criminals just like your d00d.  They're simply better at what they do, and don't get pwnt.
Crime, like everything else in life, must be done right to be successful.
Your d00d was doing it wrong.
Doesn't make him innocent, simply bad at what he does.
Not sure what all the commotion is about.

The commotion is who decides what is a crime. I gather you miss the point, though i will accept yours as a matter of pragmatism. He was stupid, silk road was stupid, we would all be better off if the laws were changed and a large segment of the population of the world was decriminalized.

Those who have the power to make laws get to decide what is a crime.
Unsurprisingly, laws are skewed to benefit those in power.

[tvbcof]

...
If you are going to play ball in the US, don't try to beat them at their own game...

Nicely stated.  +1

It's worth note that the U.S. has a somewhat expansive view of 'in the US' when it comes to financial matters, and it does not map to the classic notions of geography which we all learned in grade school.

[cryptoanarchist]

Charlie knew where the money was going and he knew The Silk Road was no mail-order gardening supply store... Ya'll need to stop acting stupid.

1. There is no evidence that Charlie knew what the BTC he sold was being spent for.

2. Its not his responsibility anyway.

3. There are many legal things for sale on Silk Road too. Corp USA argument has no merit whatsoever - these are simply scare tactics.

[darkmule]

Charlie knew where the money was going and he knew The Silk Road was no mail-order gardening supply store... Ya'll need to stop acting stupid.

1. There is no evidence that Charlie knew what the BTC he sold was being spent for.

There's page after page in the criminal complaint that says exactly otherwise.  In fact, he'd bought drugs off Silk Road himself.

2. Its not his responsibility anyway.

Legally, it is once you register as a money transmitter.

3. There are many legal things for sale on Silk Road too. Corp USA argument has no merit whatsoever - these are simply scare tactics.

Well, good luck on that.  Tell me how it goes in a couple years.  In the meanwhile, those "scare tactics" have him behind bars for the foreseeable future.  Frankly, I'd find that kind of scary if I were he, too.  Or if I were in his contact list.  Or if I had anything to do with a "Foundation" with his name on it as Co-Chair.

[leopard2]

Bharara will go to any length in terms of aggressive and evil as long as it serves his career, from the looks of this

Let's check the facts:

-BTC is not illegal
-Silkroad per se was not illegal, it was a site where legal and illegal stuff was traded
-BTCKing sold legal bitcoins to users of a legal site. Whether BTCKing did comply with regulations when he sold a maximum of $1000 worth of BTC to anonymous counterparties, I don't know. Maybe BTCKing should have registered as a money transmitter? Maybe that part was not even clear in 2012? Hard to tell.
-Bitinstand obviously sold BTC to BTCKing, but not anonymously. This would be like bank A doing business with bank B. Bank A does not comply with regulations or has some customers that use cash withdrawn at their ATMs that are located in bad areas, for illegal purposes, and bank B is made responsible because they delivered the cash to fill these ATMs. The prosecutors would claim that bank B must have known that a lot of cash in these areas is used to buy drugs etc. Insane? Not from the viewpoint of insane minds.
-Advice from Bitinstant to BTCKing to split cash deposits is not illegal itself, in fact thousands of people get their bank accounts blocked for legal things like buying bitcoins. Advising someone to avoid certain things that are legal but also red flags, to avoid unnecessary discussions or account closures, is also not illegal.

In such a world, no bank could do business with another, since anyone could be arrested anytime for someone else's mistakes.

Funny how America complains to Russia about cases like Chodorkowski, but use the same twisted logic themselves all the time 

Now all Bharara needs to do, is attack Mtgox for trading with Bitinstant and, of course, all banks that have done business with Mtgox. Finally troops have to be sent to Japan because the Japanese central bank has "knowingly" sent funds to these banks, "making good profits along the way". Perhaps there are some intermediary banks to attack as well? What a huge pile of crap.

Let's see how this develops.

[leopard2]

Nicely stated.  +1

It's worth note that the U.S. has a somewhat expansive view of 'in the US' when it comes to financial matters, and it does not map to the classic notions of geography which we all learned in grade school.

Not just financial matters, any matters. It does map to the classic notions of imperialism. 

Naturally other countries would like to do that, too, if they could.

[Bugpowder]

This shit ain't prohibition. It's tracking down fuckin idiots who think they are internet che guevarras when they can't even take care of themselves.

When prohibition doesn't work, it's time to kill and erase everything. You think prohibition is somekind of an ultimate form of state oppression? LOL this posh ass thinking.

Exactly what I would expect from 1st world retards who believe they know anything about 'government oppression'.

This kid got his ass burned because he thought he could run his shit behind his computer without any repercussions in other people's lives. His was a crime of ignorance and irresponsibility, and now he's paying for it. Crypto can be used for all kinds, certainly as a means to pay off someone for murdering your family.

Who are you all kidding anyway?

Kid can't even take the time to shave, and he wants to be a dirty money laundering kingpin.  What a joke.

[Sonny]

He should step down from the foundation ASAP.

"Guard! Guard!"

"What is it, Chuck?"

"I need to make a phone call ASAP!"

"To a lawyer?"

"No! To The Bitcoin Foundation. I want to make sure they don't give my seat away. BTW, can I have another blanket? Guard! GUARDDD!"

I literally lol at this 

[DeathAndTaxes]

Advice from Bitinstant to BTCKing to split cash deposits is not illegal itself, in fact thousands of people get their bank accounts blocked for legal things like buying bitcoins. Advising someone to avoid certain things that are legal but also red flags, to avoid unnecessary discussions or account closures, is also not illegal.

Actually it is.  It is called structuring.  An MSB has certain requirements that don't exist for other businesses.   MSB are prohibited from advising their clients how to avoid reporting thresholds, they are prohibited from aiding their clients to structure transactions.  If a client does engage in structuring to avoid AML reporting, KYC requirements, or recordkeeping and the MSB becomes aware of that the MSB is required to treat all structured transactions as if they were a single transaction for various statutory obligations.  They are liable for failing to report transactions, failing to keep accurate books, and for even notifying clients that they have filed a report with FinCEN as required by law.

Everything you described would be a criminal act by an MSB, even if there was no underlying overt act.

My best advice is don't provide advice for things you have not done legal research on.  Someone may believe you and end up in prison as a result.

In such a world, no bank could do business with another, since anyone could be arrested anytime for someone else's mistakes.

There is a huge difference between a financial institution (be it bank or MSB) UNKNOWINGLY processing transactions which are related to a criminal enterprise and doing so in compliance with its own internal AML policies and in accordance with the requirements set by FinCEN.  It is a completely different thing for an entity to KNOWINGLY engage in those transactions, violate its own internal AML policies, assist the criminal client with bypassing AML procedures, and failing to report those transactions to FinCEN.

The complaint doesn't allege the former, it alleges the latter.  For the record I am not saying Charlie is guilty of anything, the complaint is only that a complaint and the allegations until proven are just allegations.  It is up to a jury to decide if the state's ALLEGED charges have merit.  However lets at least start the discussion on what was ACTUALLY alleged and not some fantasy scenario where the prosecution is merely charging him for selling some coin in full compliance with his company's AML program that someone unknown to him later used them in a crime.  That is just 100% BS.

[Keyser Soze]

snip

Well said, seems that many have a misconception about the allegation.

[VforVictory]

He was bailed out anyhow, nuff' said.