Saw news today of the arrest of a trader of Bitcoins using the localbitcoins platform. Now according to the article the undercover officer told the seller that he was going to use the Bitcoins to pay for stolen credit card numbers on a hack site - so in my opinion knowing that and still doing the trade the guy kinda deserves a kick in the ass - but I do not see the validity in the arrest.
If the US doesn't recognize Bitcoin as a currency - how can they possibly convict this guy of illegal financial transactions?
I have just started funding and was looking into getting a loan on btcjam and I actively use localbitcoins. What does this mean for the future of those services if this is now deemed illegal? If Florida gets a conviction on this more will soon follow.
In a way it would be nice if they cleaned up the market, but in the meantime it will provide more fodder to take down the crypto markets imo.
Thoughts?
Here is a link to the article I am referencing:
http://krebsonsecurity.com/2014/02/florida-targets-high-dollar-bitcoin-exchangers/