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Judge Shoots Down "Bitcoin Isn't Money" Argument In Silk Road Trial 135

Posted by samzenpus
from the I-fought-the-law dept.
An anonymous reader writes in with the latest in the case against the alleged creator of the Silk Road, Ross Ulbricht. The government and legal community may still be arguing over whether bitcoin can be defined as "money." But the judge presiding over the landmark Silk Road drug case has declared that it's at least close enough to get you locked up for money laundering. In a ruling released Wednesday, Judge Katherine Forrest denied a motion by Ross Ulbricht, the 30-year-old alleged creator of the Silk Road billion-dollar online drug bazaar, to dismiss all criminal charges against him. Those charges include narcotics trafficking conspiracy, money laundering, and hacking conspiracy charges, as well as a "continuing criminal enterprise" charge that's better known as the "kingpin" statute used to prosecute criminal gang and cartel leaders.
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Judge Shoots Down "Bitcoin Isn't Money" Argument In Silk Road Trial

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  • by alexander_686 (957440) on Thursday July 10, 2014 @06:23AM (#47423149)

    The Constitution does not say this. It states that the Federal Goverment can issue and regulate money but not that it has a moneopoly. In fact, for the majority of US history private money was very common. i.e. Bank notes issued by private banks. It was not until the Civil War that goverment money was common and IIRC not until the early 1900 when private bank notes becaome uncommon.

  • Re:Moron Judge (Score:5, Informative)

    by JBMcB (73720) on Thursday July 10, 2014 @07:11AM (#47423303)

    Money is anything that can be used to store or trade value. Anything *can* be money, but that doesn't mean it is.

    If people are buying bitcoin, then trading it for goods, services, or other forms of money, then, de-facto, it's money.

  • by Archangel Michael (180766) on Thursday July 10, 2014 @09:46AM (#47424173) Journal

    That is not how money laundering looks like. Here is what Money Laundering Looks like

    Illegal gained money is given to a Legitmate enterprise (Gambling) and is returned as "profit" or whatever from the enterprise. In a very simple case, mob money is put into a slot machine, and 98% of it is returned when the jackpot is hit. The gains, now washed (legitimate) are taxed and are clean for use elsewhere (deposit into a bank). Where if you just stuck the gains in the bank would trigger all sorts of investigations. This is part of the reason why deposits of $10,000 or more in banks are automatically reported to treasury, for an audit of the money trail.

    The trick in money laundering is to hide the input (initial gains being laundered) well enough that it doesn't trigger the reporting requirement of transactions of 10K or more. A series of 5000 "high risk" transactions where you lose most of the time, but win big occasionally, is typically how money is laundered. The inputs are not traceable, and the earnings become legitimate.

    The goal is always to hide the initial input, obfuscate the long trail of transactions and end up with legitimate money on the back end. The transaction you describe is used to obfuscate the buyer and seller from each other, and the authorities, not the transaction. Money laundering still has to occur with the seller, as the bitcoin to currency exchange still has dirty money written all over it.

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