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Author Topic: Charlie Shrem Pleads Guilty - What do you think?  (Read 5489 times)
johncarpe64
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September 03, 2014, 04:59:10 AM
 #61

Why is he only one being prosecuted?

There are still a lot of people selling on localbitcoin.

I think his case is being used to set an example and make us behave. Everyone trading cash and Bitcoins without the proper license on localbitcoins is most certainly in violation of the law. I wish DnT was in this thread. He studied up on it and could explain the ins and outs.
I think it is more about buying and selling drugs over the internet. They charged Ross with the harshest statutes that were designed for drug lords. They changed that guy in FL with money laundering when he sold bitcoin on LBC at outrageous prices (huge mark up) to a undercover cop that told him he was going to use the bitcoin to buy drugs and do other illegal things.   

You may be right. It might not have anything to do with Bitcoin. It may just be a warning to anyone trying to bypass drug laws using the deep web.
More evidence to support this theory is the fact that Mark (gox) was violating AML rules for years but was never charged with any crimes. Granted homeland security did seize their bank account, but this was likely to try to become more strict for AML (to make it easier to figure out who Ross was).

Also, how many traders on LBC or craigslist do you think there are that even attempts to follow AML rules? My guess is less then 20% on LBC and less then 5% on craigslist. Same with people trading fiat for bitcoin on this forum. People are outright breaking the law out in the open (that is bitcoin related) but the government is not doing anything about it. Granted these are all very small "fish" and there are no real victims.

Charlie was doing pretty much exactly this (granted he was making more money from it) but the only other real difference is that he was profiting from and helping SR.

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September 03, 2014, 03:14:43 PM
 #62

If you had AML/KYC info for that guy that was selling them to SR then you are not guilty.

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September 03, 2014, 03:21:44 PM
 #63

From August 2011 - August 2013 BitInstant processed around 400M worth of BTC to customers. (rough estimate)

Thats about 24 months in business.

In their indictment, the government alleges that 1M of that went to Silk Road.  (I wasn't even selling BTC to Silk Road users, I was allegedly selling to a guy who in turn resold the coins to users on Silk Road for a markup )

That means over a 2 year span, 0.025% of transactions on BitInstant were for Silk Road.

BitInstant's total operating profit (before costs, expesnes, ect) on 1M USD is 1.5% = $15,000 total the company profited from these alleged crimes, over an 11 months period. Thats $1,363 per month.


Charlie was doing pretty much exactly this (granted he was making more money from it) but the only other real difference is that he was profiting from and helping SR.

I personally made no extra money from these alleged crimes.

I'm sorry for you bro!
but actually for the community it's very good news!!! Grin Grin Grin
People will think twice if it's worth getting involved in laundering stolen mt.gox coins for example
They will rot in hell when we get them Angry Angry Angry
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September 03, 2014, 03:39:05 PM
 #64

If you had AML/KYC info for that guy that was selling them to SR then you are not guilty.

From what I understand he is pleading guilty to knowingly selling Bitcoin when he knew they would be used for Silk Road so it doesn't matter what info he had.  While it is well known Silk Road was used for some illegal activities not everything there was illegal.  BitInstant's part seems be relatively small compared to people actively involved in planning and conducting substantial illegal activities on a regular basis.  The documents show the activity he is pleading to was more of an aberration to get the guy out of his hair rather than some type of ongoing effort.  Anything else is irrelevant since that is what he is pleading to.  I think he will get probation.

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September 03, 2014, 04:00:17 PM
 #65

If you had AML/KYC info for that guy that was selling them to SR then you are not guilty.

From what I understand he is pleading guilty to knowingly selling Bitcoin when he knew they would be used for Silk Road so it doesn't matter what info he had.  While it is well known Silk Road was used for some illegal activities not everything there was illegal.  BitInstant's part seems be relatively small compared to people actively involved in planning and conducting substantial illegal activities on a regular basis.  The documents show the activity he is pleading to was more of an aberration to get the guy out of his hair rather than some type of ongoing effort.  Anything else is irrelevant since that is what he is pleading to.  I think he will get probation.

Even probation is too much unless he knew what the coins would be used for. If I sell Bitcoins to someone from Localbitcoins and he said I work at Newegg but I deal drugs too. Would I be guilty? How am I supposed to know whether he's using them for a purchase at Newegg or to buy drugs. That seems like a lot of circumstantial bullshit to me. Or I don't know the whole story.

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September 03, 2014, 04:08:27 PM
 #66

If you had AML/KYC info for that guy that was selling them to SR then you are not guilty.

From what I understand he is pleading guilty to knowingly selling Bitcoin when he knew they would be used for Silk Road so it doesn't matter what info he had.  While it is well known Silk Road was used for some illegal activities not everything there was illegal.  BitInstant's part seems be relatively small compared to people actively involved in planning and conducting substantial illegal activities on a regular basis.  The documents show the activity he is pleading to was more of an aberration to get the guy out of his hair rather than some type of ongoing effort.  Anything else is irrelevant since that is what he is pleading to.  I think he will get probation.

Even probation is too much unless he knew what the coins would be used for. If I sell Bitcoins to someone from Localbitcoins and he said I work at Newegg but I deal drugs too. Would I be guilty? How am I supposed to know whether he's using them for a purchase at Newegg or to buy drugs. That seems like a lot of circumstantial bullshit to me. Or I don't know the whole story.

I believe he is admitting he knew the coins were going to be resold guy was not a licenses transmitter and that they were sold on Silk Road.  The docs shows he told the guy no a few times but gave in at one point.  That is different then someone who planned a business around illegal activities.

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September 03, 2014, 04:13:20 PM
 #67

If you had AML/KYC info for that guy that was selling them to SR then you are not guilty.

From what I understand he is pleading guilty to knowingly selling Bitcoin when he knew they would be used for Silk Road so it doesn't matter what info he had.  While it is well known Silk Road was used for some illegal activities not everything there was illegal.  BitInstant's part seems be relatively small compared to people actively involved in planning and conducting substantial illegal activities on a regular basis.  The documents show the activity he is pleading to was more of an aberration to get the guy out of his hair rather than some type of ongoing effort.  Anything else is irrelevant since that is what he is pleading to.  I think he will get probation.

Even probation is too much unless he knew what the coins would be used for. If I sell Bitcoins to someone from Localbitcoins and he said I work at Newegg but I deal drugs too. Would I be guilty? How am I supposed to know whether he's using them for a purchase at Newegg or to buy drugs. That seems like a lot of circumstantial bullshit to me. Or I don't know the whole story.

I believe he is admitting he knew the coins were going to be resold guy was not a licensed transmitter and that they were sold on Silk Road.  The docs shows he told the guy no a few times but gave in at one point.  That is different then someone who planned a business around illegal activities.

Ah, that's the missing piece of the puzzle.

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September 03, 2014, 04:29:18 PM
 #68

In their indictment, the government alleges that 1M of that went to Silk Road.  (I wasn't even selling BTC to Silk Road users, I was allegedly selling to a guy who in turn resold the coins to users on Silk Road for a markup )

That means over a 2 year span, 0.025% of transactions on BitInstant were for Silk Road.

BitInstant's total operating profit (before costs, expesnes, ect) on 1M USD is 1.5% = $15,000 total the company profited from these alleged crimes, over an 11 months period. Thats $1,363 per month.
Jailtime for this is an absurd injustice. This is small fries, it should be a slap on the wrist fine - $15,000 at most.

Remember Aaron Swartz, a 26 year old computer scientist who died defending the free flow of information.
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September 03, 2014, 04:30:04 PM
 #69

From August 2011 - August 2013 BitInstant processed around 400M worth of BTC to customers. (rough estimate)

Thats about 24 months in business.

In their indictment, the government alleges that 1M of that went to Silk Road.  (I wasn't even selling BTC to Silk Road users, I was allegedly selling to a guy who in turn resold the coins to users on Silk Road for a markup )

That means over a 2 year span, 0.025% of transactions on BitInstant were for Silk Road.

BitInstant's total operating profit (before costs, expesnes, ect) on 1M USD is 1.5% = $15,000 total the company profited from these alleged crimes, over an 11 months period. Thats $1,363 per month.


Charlie was doing pretty much exactly this (granted he was making more money from it) but the only other real difference is that he was profiting from and helping SR.

I personally made no extra money from these alleged crimes.
Well very little extra money, but this isn't the point. The point was the volume, however it looks like the volume really didn't make a difference on your bottom line.

EDIT: I do remember doing rough math when the indictment came out and calculated that the amount of money you made from allegedly selling to SR was ~$10k.....I hardly think a 30 year sentence is appropriate with this level of profits. 

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September 03, 2014, 05:10:52 PM
 #70

If you had AML/KYC info for that guy that was selling them to SR then you are not guilty.

From what I understand he is pleading guilty to knowingly selling Bitcoin when he knew they would be used for Silk Road so it doesn't matter what info he had.  While it is well known Silk Road was used for some illegal activities not everything there was illegal.  BitInstant's part seems be relatively small compared to people actively involved in planning and conducting substantial illegal activities on a regular basis.  The documents show the activity he is pleading to was more of an aberration to get the guy out of his hair rather than some type of ongoing effort.  Anything else is irrelevant since that is what he is pleading to.  I think he will get probation.

This is exactly true!

Bitcoin pioneer. An apostle of Satoshi Nakamoto. A crusader for a new, better, tech-driven society. A dreamer.

More about me: http://CharlieShrem.com
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September 03, 2014, 05:14:04 PM
 #71

Hmm... this is a bit more complex than I thought earlier. Technically saying, if we exchange our coins to cash to some other guy, and if that guy uses those coins to purchase weed or other stuff from dark markets such as SR 2.0, then we could be prosecuted. The FBI could just create some false evidence claiming that the original seller had known of these plans in advance.  Angry

                               
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September 03, 2014, 05:19:42 PM
 #72

If you had AML/KYC info for that guy that was selling them to SR then you are not guilty.

From what I understand he is pleading guilty to knowingly selling Bitcoin when he knew they would be used for Silk Road so it doesn't matter what info he had.  While it is well known Silk Road was used for some illegal activities not everything there was illegal.  BitInstant's part seems be relatively small compared to people actively involved in planning and conducting substantial illegal activities on a regular basis.  The documents show the activity he is pleading to was more of an aberration to get the guy out of his hair rather than some type of ongoing effort.  Anything else is irrelevant since that is what he is pleading to.  I think he will get probation.

This is exactly true!

That's really good news! You're going to get off easy and it was all BS to begin with. I had heard and believed so many rumors flying around that I didn't know what to believe. I even started repeating some of them myself. I formally apologize Charlie for being a part of that rumor mill.  I'm glad you were around to clear it up.


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September 03, 2014, 07:49:55 PM
 #73

From August 2011 - August 2013 BitInstant processed around 400M worth of BTC to customers. (rough estimate)

Thats about 24 months in business.

In their indictment, the government alleges that 1M of that went to Silk Road.  (I wasn't even selling BTC to Silk Road users, I was allegedly selling to a guy who in turn resold the coins to users on Silk Road for a markup )

That means over a 2 year span, 0.025% of transactions on BitInstant were for Silk Road.

BitInstant's total operating profit (before costs, expesnes, ect) on 1M USD is 1.5% = $15,000 total the company profited from these alleged crimes, over an 11 months period. Thats $1,363 per month.


Charlie was doing pretty much exactly this (granted he was making more money from it) but the only other real difference is that he was profiting from and helping SR.

I personally made no extra money from these alleged crimes.

Hey, Charlie - thanks for the great service.  I never used Silk Road (haven't ever done drugs in my life, though I affirm everyone should be legally free to do so), but I used BitInstant several times last year.  It was fantastic, and I was sorry to see it go.  I hope your legal woes will soon be as far behind you as they can possibly be.

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September 03, 2014, 07:50:25 PM
 #74

If you had AML/KYC info for that guy that was selling them to SR then you are not guilty.

I deny anyone's right to force people to follow these laws.

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September 03, 2014, 07:51:39 PM
 #75

Granted these are all very small "fish" and there are no real victims.

There are also no victims from what BitInstant/Charlie Shrem is alleged to have done.

The only people being victimized here are the ones having their anonymity taken away, and Charlie who is having his rights to liberty and property infringed.  The only criminals are the ones enforcing this immoral law.

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September 03, 2014, 07:53:08 PM
 #76

If you had AML/KYC info for that guy that was selling them to SR then you are not guilty.

From what I understand he is pleading guilty to knowingly selling Bitcoin when he knew they would be used for Silk Road so it doesn't matter what info he had.  While it is well known Silk Road was used for some illegal activities not everything there was illegal.  BitInstant's part seems be relatively small compared to people actively involved in planning and conducting substantial illegal activities on a regular basis.  The documents show the activity he is pleading to was more of an aberration to get the guy out of his hair rather than some type of ongoing effort.  Anything else is irrelevant since that is what he is pleading to.  I think he will get probation.

Even probation is too much unless he knew what the coins would be used for. If I sell Bitcoins to someone from Localbitcoins and he said I work at Newegg but I deal drugs too. Would I be guilty? How am I supposed to know whether he's using them for a purchase at Newegg or to buy drugs. That seems like a lot of circumstantial bullshit to me. Or I don't know the whole story.

Makes no moral difference anyway since people have a perfectly legitimate right to buy drugs as well as to buy stuff from Newegg.

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September 03, 2014, 07:55:25 PM
 #77

In their indictment, the government alleges that 1M of that went to Silk Road.  (I wasn't even selling BTC to Silk Road users, I was allegedly selling to a guy who in turn resold the coins to users on Silk Road for a markup )

That means over a 2 year span, 0.025% of transactions on BitInstant were for Silk Road.

BitInstant's total operating profit (before costs, expesnes, ect) on 1M USD is 1.5% = $15,000 total the company profited from these alleged crimes, over an 11 months period. Thats $1,363 per month.
Jailtime for this is an absurd injustice. This is small fries, it should be a slap on the wrist fine - $15,000 at most.

That's like saying Rosa Parks should have received a slap on the wrist.

Enforcing unethical laws is unethical.

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September 07, 2014, 01:13:13 PM
 #78

That's some bullshit, he didn't do anything wrong.
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September 07, 2014, 01:46:35 PM
 #79

This article seems more interesting for me http://www.coinfinance.com/news/charlie-shrem-pleads-guilty

"They had no choice. When federal agents were investigating silk road they discovered Shrem was helping launder money. They can't just ignore crimes that are taking place right in front of them. Most banks execs are smart enough not to detail their illegal activites in email. - neededtobesaid"

Yes and No.
As prosecutors, yes, they have a public obligation to fulfill their role as, well, prosecutors. However, the law affords them considerable latitude in how they do that—and for good reason.

The best exercise of justice lies in the ability to weigh the many factors involved, and effect a reasonable degree of pressure and/or punishment. What I see here, is not that. I see the typical "throw the book" at him, hope the charges stick, resulting in an easy plea deal—which they got.

I've never known a prosecutor to give a second thought as to whether (and to what extent) they should have charged. Nor whether they just ruined someone's life in the process.

For crying out loud, we have grandmas in federal penitentiary for growing and consuming cannabis for their arthritis. In one case I was reading about, an elderly lady invited an officer in her home for tea, only to be imprisoned, when he saw her plants in her kitchen.
Shrem's amateur-ness, clearly evident, is more of a sign of his lack of criminal intention. Most pros in this business, who know very well what they're doing from the start, take the necessary steps from square-one to maintain security and plausible deniability.

Lastly, money-laundering is fundamentally a questionable "crime" to begin with. If I think of routing certain funds in a certain way with a certain intention: it's legal. But if I think about it in a different way, even if I'm essentially doing the same thing, and am willing to disclose my thought process and paper trail, then it can be illegal. This is one of the reasons banks place a premium on confidentially of their internal records. No matter what their intentions, if records are made public, they may be used to construct a case against them, regardless of their intent.

This is also a reason that some folks (perhaps more on the extreme side) call money-laundering a "thought-crime." It's already illegal to do whatever the action was, that the "laundering" is suspected of aiding. Why not simply prosecute that original action? And if the core action wasn't illegal, is it even laundering then?

In the case of Shrem, so what if he sold bitcoin to someone—even if they told him they were going to spend it at the Silk Road? Several items for sale at the Silk Road are perfectly legal. Furthermore, even if someone told Shrem they wanted bitcoin for the explicit reason of purchasing drugs, who's to say those drugs aren't legal in that person's jurisdiction? The Silk Road sells internationally.
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September 07, 2014, 01:59:27 PM
 #80

http://www.coinfinance.com/news/charlie-shrem-pleads-guilty

I know all of you are aware of this news already. I'm interested in what you think about it.

Should he have plead guilty? Fight for Bitcoin rights and become a martyr in prison or save himself?
Was a crime really committed or is this just a government attack on Bitcoin?
Was this a "scare" prosecution to make the rest of us "behave"?
Do you believe if he is guilty of the crimes accused he should pay for his actions? (the govt is right)
Do you think part of his "deal" includes selling out his friends, partners and clients?
Was this because there was already an ongoing investigation of Silk Road and he was unlucky enough to be dealing with them?
Do you know any insider info about what's really happening?

Here's my take on it. I like Charlie. I bought some stuff from him when he was selling in the marketplace on this forum. I had a problem with my order and he quickly made it right. I think he's a cool guy that fucked up. I don't think he sold anyone out. I think prosecutors like to put things to bed quickly so they make offers that are too good to be true that way they don't have to go to court. I think they had been looking at Silk Road for a long time and he was just a small part of that investigation.

I know people hate self moderated threads so I purposely didn't make this one. However, this isn't meant to be Charlie's public crucifixion so please be civil. You don't have to slander the man to state your opinion, he's been through enough.
I think that we need to stop looking after every movement of Charlie and wait for the result of his activity
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