BBC News: Charlie Shrem admits unlicensed money transfers

[LakeBTC]

The operator of an exchange for the virtual currency Bitcoin has pleaded guilty to running an unlicensed money transmitting business.

Charlie Shrem from BitInstant.com admitted the charges in a New York federal court hearing.

Another Bitcoin trader, Robert Faiella, also pleaded guilty.

Both were arrested in January, accused of selling more than $1m (£603,000) in bitcoins to users of online drug marketplace the Silk Road.

The site was shut down last year and its alleged owner was arrested.

The two traders admitted the charges as part of a deal struck with US prosecutors in order to settle the allegations against them.

Bitcoin exchanges are services that allow users to trade bitcoins for traditional currencies.

Mr Shrem had been accused of allowing Mr Faiella to use BitInstant to purchase large quantities of bitcoins to sell on to Silk Road users who wanted to buy drugs anonymously.

The authorities said Mr Shrem was aware that the bitcoins were being used for such purchases, and therefore he was in violation of the Bank Secrecy Act.

The Act requires financial institutions in the US to alert authorities to any suspicious activity that may suggest money laundering is taking place.

...
http://www.bbc.com/news/business-29072886

[Keyara]

Is he arrested for selling bitcoin or because of his link to silkroad?

There are still a lot of btc sellers on localbitcoin. Some have been selling for more than a year and these sellers don't appear to be worry.

[titulng]

Is he arrested for selling bitcoin or because of his link to silkroad?

There are still a lot of btc sellers on localbitcoin. Some have been selling for more than a year and these sellers don't appear to be worry.

Because he not only knows BTCKing are using Bitcoin for laundering money, but also Charlie Shrem supports BTCking to do it and help him to do laundering.

[master-P]

Is he arrested for selling bitcoin or because of his link to silkroad?

There are still a lot of btc sellers on localbitcoin. Some have been selling for more than a year and these sellers don't appear to be worry.

More likely then not, yes. Although this is not the official stance of the government. He was officially charged and arrested for violating AML rules/laws.

I personally think the government is essentially trying to spread FUD about participating in the sale (and purchase) of drugs on darknet/deepweb sites. I also find it ironic that many more of these kinds of sites have popped up almost right after SR was taken down and media reports have said that overall business is way up since SR was taken down.

[wasserman99]

This admission is only a formality. It is not actually alleged that he did this, the allegations are in the original indictment. It was agreed that he would be allowed to admit to a lessor crime in exchange for not forcing the government to bear the expense and uncertainty of going to trial.

[k988]

It's because of his links to SR!


5 years though... Justified??!

https://www.expressvpn.com/blog/current-events/charlie-shrem-bitcoin-pioneer-pleads-guilty-federal-charge-bitcoin-trading-scandal/

[CokeCoin]

I'm sure these prosecutors are really proud of their bust—pressuring yet another harmless kid into a plea deal.
And while they're doing that, countless professional launderers go to work, day in and day out. The only difference is that they have the financial backing and legal counsel from those who specialize in these things.

Most of what the pros do is technically "legal" so there's nothing to prosecute. And when it's not 100% legal, they know how to structure their arrangements to fall within certain grey areas of the law, making a successful prosecution of their practices, a legal nightmare.
Instead of facing any of these fundamental issues, or having the balls to investigate real cases, the prosecutors, as typical, go for the low hanging fruit. Regardless of the fact that what Shrem did, is for all practical purposes, harmless.

[GTA]

But bitcoin isn't money. How can he plead guilty to running a money exchange, when the IRS has ruled it isn't money. He was only buying and selling a virtual property. Do we need to start arresting people who buy and sell high ticket items like wine or cars?

[jcoin200]

It's because of his links to SR!


5 years though... Justified??!

https://www.expressvpn.com/blog/current-events/charlie-shrem-bitcoin-pioneer-pleads-guilty-federal-charge-bitcoin-trading-scandal/

Faces UP TO 5 years, most likely will get less.

[Summer,69]

But bitcoin isn't money. How can he plead guilty to running a money exchange, when the IRS has ruled it isn't money. He was only buying and selling a virtual property. Do we need to start arresting people who buy and sell high ticket items like wine or cars?

You're confused. The IRS said it's a property, but their opinion doesn't matter when it comes to regulatory issues. The various departments of the government are under no obligation to treat bitcoin the same.
It's stupid, but that's reality.

[Yeezus]

Is he arrested for selling bitcoin or because of his link to silkroad?

There are still a lot of btc sellers on localbitcoin. Some have been selling for more than a year and these sellers don't appear to be worry.

Because he not only knows BTCKing are using Bitcoin for laundering money, but also Charlie Shrem supports BTCking to do it and help him to do laundering.

Well they probably went after him just because of the link to Silk Road, but they do occasionally go after Local Bitcoin sellers too. Been a few sting operations on there I believe.

[MoonTime]

That sucks for him. He shouldn't have done that. He lost lot of money now!

[5 Guys Burgers]

he always was and will be a racist too... google some of the things he said its interesting hehe.

[l3sny]

Charlie is a great guy and always will be. He made a deal with the prosecutors, sometimes you have to bend to not to be broken.

[jcoin200]

Charlie is a great guy and always will be. He made a deal with the prosecutors, sometimes you have to bend to not to be broken.

And to avoid spending a fortune in legal fees just to defend himself.  I'm sure the lawyers have already cost him a pretty penny.

[QuestionAuthority]

https://bitcointalk.org/index.php?topic=764907.0

[Justine]

It's because of his links to SR!


5 years though... Justified??!

https://www.expressvpn.com/blog/current-events/charlie-shrem-bitcoin-pioneer-pleads-guilty-federal-charge-bitcoin-trading-scandal/

Government is out of control. 5 years jail time for someone who just buy and sell btc.

If they want to go after drug vendors, they should arrest them rather than someone who just facility payment.

[master-P]

Is he arrested for selling bitcoin or because of his link to silkroad?

There are still a lot of btc sellers on localbitcoin. Some have been selling for more than a year and these sellers don't appear to be worry.

Because he not only knows BTCKing are using Bitcoin for laundering money, but also Charlie Shrem supports BTCking to do it and help him to do laundering.

Well they probably went after him just because of the link to Silk Road, but they do occasionally go after Local Bitcoin sellers too. Been a few sting operations on there I believe.

The LBC sellers that have been charged with crimes were told that the bitcoin being purchased was going to be used for illegal activity. The government is saying in Shrem's case that he knew the bitcoin was going to be used on SR.

[georgekappa]

This is just the Banks going after the little guys once again that are trying to bring a change and eventually delivering a fatal blow to the banking system.
Proof that the government is rotten to its core and does what the big corporations tells it to do.
But it's too late , you can't stop it anymore.

 

[lovegood]

But bitcoin isn't money. How can he plead guilty to running a money exchange, when the IRS has ruled it isn't money. He was only buying and selling a virtual property. Do we need to start arresting people who buy and sell high ticket items like wine or cars?

You're confused. The IRS said it's a property, but their opinion doesn't matter when it comes to regulatory issues. The various departments of the government are under no obligation to treat bitcoin the same.
It's stupid, but that's reality.

It's not confusion. It's pointing out the hypocrisy of the system.