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

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 Anonymous Coward on Thursday July 10, 2014 @05:44AM (#47422885)

    Really. One would have to be extremely dense, or have lived in a cave for the last 30 years to not make the connection that Bitcoin is still a financial tool. Bitcoin's primary purpose is to traffic/launder money and goods. But it's not just bitcoin, it's also all those various game time cards you can buy at 7-11.

  • by Required Snark ( 1702878 ) on Thursday July 10, 2014 @06:32AM (#47423025)

    a "continuing criminal enterprise" charge that's better known as the "kingpin" statute used to prosecute criminal gang and cartel leaders.

    Given the billion's of $US that various [newsweek.com] banks [wsj.com] have been fined recently, for things like evading US taxes and money laundering for Syria, Iraq, and Somalia, isn't it about time that the legal system give the same treatment to bankers committing these crimes?

    Why do they get to pay fines that don't have any real effect? Just look how their stock always go up after they announce a deal. If any individual ever gets fired it's always the low level person who takes the hit, and they all end up going to work for someone else and never face any real problems.

    Oh, I just remembered: bribes/campaign contributions along with the revolving door and juicy high paying jobs for former regulators. To bad drug dealers can't have a revolving door with law enforcement.

  • by thaylin ( 555395 ) on Thursday July 10, 2014 @06:41AM (#47423057)

    So Russians money is not money? No other country has money because congress is the only people that can make money? Of course the contitution does NOT say that only congress has that ability, just that they are able to coin money.

    Article 1, section 8 .... To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures; ....

    Now if you can tell me where in that line it says that ONLY congress is able to make money I will bow down to your constitutional knowledge.

  • by Gravis Zero ( 934156 ) on Thursday July 10, 2014 @07:09AM (#47423109)

    The judge dismisses the 'bitcoin is not money' portion based of a ruling that the IRS and Fed Reserve do not have the authority to define what 'money' is. (both having defined bitcoin as 'property' and not 'money') Which is all fine and good, but the US Marshal has already ruled bitcoin as property since they disposed of the seized bitcoin through a property sale. There are very particular and different rules governing the disposal of money and property. One would think the US Marshals office actions would be the statute defining action.

    do you really think the US government wont have it both ways? i'm reminded of this story: "US government declares hacking an act of war, then hacks allies" [washingtonexaminer.com]

    if I've learned anything in my life, it's that laws, logic and common sense dont really matter to the government or big business... unless it's convenient.

  • by Anonymous Coward on Thursday July 10, 2014 @07:39AM (#47423205)

    If that makes me a money launderer (...)

    What makes someone a money launderer is how they employ tricks to eliminate any trace between the money exchanged in an illegal transaction and how it is being officially accounted for.

    In very much the same way as a specific brand of laundry detergent is used as a currency in illegal transactions [wikipedia.org].

    In the case of encryption key schemes such as bitcoin, the thing that gave it traction was how the silk road functioned through a wink and a nod, with peers agreeing that to conduct their illegal business they first exchanged their money for crypto keys, conducted the business by giving the crypto keys in exchange for illegal goods and services, and then exchanged the crypto keys for real money. The only purpose behind this scheme was to eliminate the paper trail between the money and the illegal transaction.

    That's what makes it a money laundering scheme. Because its primary use is to launder money.

  • by bloodhawk ( 813939 ) on Thursday July 10, 2014 @07:59AM (#47423261)

    Seriously is it that hard to keep the utter bullshit out of the summary. The ruling made no such suggestion that bitcoin was money or close enough. She ruled you can convert bitcoin to money, the same way you can convert a bag of cow shit. In other words she ruled that bartering goods doesn't get around money laundering rules as the goods have value.

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

    by pjt33 ( 739471 ) on Thursday July 10, 2014 @08:20AM (#47423341)

    But he's not charged with money laundering. He's charged with conspiracy to launder money. If dirty money comes in and clean money comes out then money laundering has occurred, whether or not some of the intermediate steps involved the exchange of non-monetary assets. So "I was only involved in transactions involving the exchange of non-monetary assets" is irrelevant: what matters is a) whether they were part of a larger chain of transactions to launder money; b) whether he was aware of that larger chain.

Whenever people agree with me, I always think I must be wrong. - Oscar Wilde