..

[herebittybittybitty]

Also: Where is it illegal to sell Bitcoin in the US? I had no idea it was...

It is illegal to knowingly sell bitcoins to someone who has admitted they will be used for criminal activity. That covers all of the US.

That makes these "stings" to try to turn something legal into something illegal even more disgusting.

[wasserman99]

Also: Where is it illegal to sell Bitcoin in the US? I had no idea it was...

It is illegal to knowingly sell bitcoins to someone who has admitted they will be used for criminal activity. That covers all of the US.

That is not true. You need to follow AML regulations when selling BTC for cash. In a nutshell these include verifying the identity of the person you are dealing with and reporting any transaction over a certain threshold.

Since many/most traders are likely unaware of AML regulations, LE (undercover) will often say they are using the BTC illegally to give the trader a reason to look into the regulations and rules regarding AML.

[luckyluigi]

Thank you for posting this OP, really eye-opening. I don't even use localbitcoins, and probably won't in the future because of all the risks. This is just an icing on the cake. I wonder if this could get news coverage on some bitcoin news sites, seems like it would make a good piece.

[ForgottenPassword]

That is not true. You need to follow AML regulations when selling BTC for cash. In a nutshell these include verifying the identity of the person you are dealing with and reporting any transaction over a certain threshold.

Since many/most traders are likely unaware of AML regulations, LE (undercover) will often say they are using the BTC illegally to give the trader a reason to look into the regulations and rules regarding AML.

Thats not what the Florida indictment states. AML is a completely different issue.

Charlie Shrem the owner of BitInstant a Bitcoin exchange that was (almost) fully compliant with AML was arrested for knowingly selling Bitcoins to someone who he knew sold them to people who used them for illegal activity and failing to report this:

http://time.com/1892/bitinstant-ceo-charlie-shrem-arrested-for-alleged-money-laundering/

If someone tells you that they are buying your Bitcoins to spend on cocaine, asking to see their ID won't cover you.

[the joint]

One simple fact to keep in mind:  As far as I'm aware, it is *not* illegal for law enforcement to lie to you to coerce you or trick you into committing or confessing illegal activity.  It is entirely up to you to know the laws in your area and to protect yourself accordingly.

[colinistheman]

I wonder if you were being audio recorded while this deal was going down. I bet so.

Recorded audio of you selling btc to a person knowingly using it for illegal purposes would be the only way to have the evidence needed, right? (aside from any texts/emails showing known intent of the buyer)

[keithers]

Thanks for the story.   It is a good cautionary narrative.  People should take his advice just to save you the possible legal trouble/stress it will cause you.

[vabtc]

Thanks for the post, I had something very similar happen. He had addresses on a piece of paper, not even QR codes and admitted they were not his. I felt uncomfortable about the whole thing and declined to sell the coins.

[odolvlobo]

There is a lot of paranoia in this thread. It isn't as bad as people are making it out to be. Face-to-face transactions are safe and easy. Online selling is risky because of chargebacks and fraud. Even cash bank deposits can be reversed.

Just stick to small amounts and stay away from people talking about criminal activity, and you have nothing to worry about.

[abercrombie]

Thanks for the post, I had something very similar happen. He had addresses on a piece of paper, not even QR codes and admitted they were not his. I felt uncomfortable about the whole thing and declined to sell the coins.

Once he admits it's not for him and on behalf of a 3rd party, you would be operating as a money transmitter without a license.  They charged Charlie Shrem of Bitinstant for that crime.

[conspirosphere.tk]

"You've got to be honest to succeed as an outlaw"

[ForgottenPassword]

There is a lot of paranoia in this thread. It isn't as bad as people are making it out to be. Face-to-face transactions are safe and easy. Online selling is risky because of chargebacks and fraud. Even cash bank deposits can be reversed.

Just stick to small amounts and stay away from people talking about criminal activity, and you have nothing to worry about.

This.

Just keep to small amounts and be professional and do everything as smooth and quickly as possible. Check out your buyer before meeting them (past feedback etc), check all the notes you receive, do the trades in a safe place, use the escrow service and if the buyer mentions anything illegal DO NOT trade with them ever again. Keep it strictly business. So long as you're not trading excessively large amounts you will be very safe doing this.

[leopard2]

They are creating crime in order to prosecute it.

This is pretty standard these days.

This is called entrapment and used to be illegal in the old day.

Yes, but there are so many "men in black" now that there is not nearly enough real crime to keep them busy. To finance this apparatus, victimless crime and even crimeless crime is prosecuted. If that is not enough, cases are literally engineered by them. Many innocent people are put in jail just to keep their statistics in shape. Probably the same in other parts of the world. It is revolting.

www.theguardian.com/world/2011/nov/16/fbi-entrapment-fake-terror-plots

http://rt.com/usa/fbi-usa-terrorism-portland/

https://bitcointalk.org/index.php?topic=714589.0

[Chris_Sabian]

The way that OP handled the situation is prefect.

Once the talk about illegal stuff came up, end the transaction and walk away.

OP is correct about money laundering and law enforcement.   

[hodap]

The way that OP handled the situation is prefect.

Once the talk about illegal stuff came up, end the transaction and walk away.

OP is correct about money laundering and law enforcement.   

If he limit his transaction to 500-1000 per sale. The law enforcement may not even bother him.

[TheButterZone]

Just a matter of time before LE ends up trying to entrap us, we attempt to make a citizen's arrest, the undercover and/or their backup team executes us in "self-defense", and it's ruled "justified" by a complicit justice system.

Or better/worse yet, a law-abiding LEO ends up arresting the entrapping LEO from another agency, or gets shot trying.

[herebittybittybitty]

I do wish the OP had called the police on the "buyer" just for laughs. Ask to file a report, fake being all concerned etc. Get the feds involved to investigate for added yucks. 

[Carnage]

I am glad this is illegal in my country

[Chris_Sabian]

The way that OP handled the situation is prefect.

Once the talk about illegal stuff came up, end the transaction and walk away.

OP is correct about money laundering and law enforcement.   

If he limit his transaction to 500-1000 per sale. The law enforcement may not even bother him.

Another valid point.  This amount will probably vary by state as each has their own money laws (or soon to be laws)

[counter]

There is a lot of paranoia in this thread. It isn't as bad as people are making it out to be. Face-to-face transactions are safe and easy. Online selling is risky because of chargebacks and fraud. Even cash bank deposits can be reversed.

Just stick to small amounts and stay away from people talking about criminal activity, and you have nothing to worry about.

I couldn't agree more,  I'd treat the service like Craigslist.  Come to think of it I've heard of many more horror stories of Craigslist meetups gone bad then I have of Bitcoin exchanges going wrong.  It seems more common for the cops to be the reason for worry when exchanging coin in person then criminals..