Bitcoin Exec To Spend Two Years Behind Bars For Silk Road Transactions 69
mrspoonsi writes Charlie Shrem, former Bitcoin Foundation board member and CEO of the now-defunct exchange BitInstant, has been sentenced to two years in prison for helping Silk Road users anonymously swap cash for digital currency. Silk Road, as you know, was the online marketplace infamous for hosting anonymous drug and gun sales that was busted by the FBI back in 2013. A version 2.0 went up shortly after that, but it suffered the same fate as its predecessor this November. Based on evidence gathered during the crackdown, Shrem agreed to partner with Robert M. Faiella to trade over $1 million in cash from buyers. Faiella was the one with direct contact to buyers, hiding behind the name BTCKing to post ads promoting his dollar-to-Bitcoin business on the marketplace.
Sorry, not corporate enough. (Score:5, Insightful)
If he worked for HSBC, he wouldn't even have been charged.
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If that and he had been dealing in illegal drugs... yes, he would have been charged. What, nothing on the attempting-to-hire-a-hitman?
Re: Sorry, not corporate enough. (Score:5, Informative)
You're probably unaware that the GP specifically used 'HSBC' because they were caught laundering trillions of dollars of drug money and nobody was indicted. It's no crime to be ignorant of such things, but just try not to hold any policy positions on the subject.
Re: Sorry, not corporate enough. (Score:4, Informative)
He probably isn't unaware of that. He may well have actually read the indictment itself or a detailed summary of it, which made clear that the US case was very weak to the point of hardly working at all. In particular, not only did they fail to clearly establish that drug money was really moving (their case was "there is so much cash, some of it must be from cartels") but in particular they failed to show intent by HSBC execs to help drug cartels. Actually their case boiled down to HSBC didn't try hard enough, they weren't suspicious enough, etc. (I'm ignoring the Iranian transactions here which gets into issues of international jurisdiction, as you only brought up drugs).
The reason you think the are guilty is twofold. Firstly US anti money laundering laws are unbelievably extreme. The PATRIOT Act removed the need to have intent to be found guilty of money laundering. Bankers can now be found guilty of AML violations even if they genuinely tried hard and had no intent to break the law. Hence the accusations from the DoJ that were of the form "HSBC should have designated Mexico as high risk", etc. Secondly as part of the plea agreement HSBC had to act guilty and accept whatever the DoJ said about them. So you only heard one side of the story, the prosecutions side (except there was no court case). No surprises that you think the whole thing is cut and dried.
Given that there was never any court case and HSBC was never able to defend themselves, pretty much everyone is ignorant in this case because we never heard the full story. But I'm pretty sure if DoJ had emails from HSBC execs that looked like the ones from BitInstant there would indeed have been prosecutions.
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What you're missing is the depth of the investigation. There are plenty of reasons to believe HSBC execs should have known the money was dirty, it sinply wasn't investigated deeply enough.
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Re: Sorry, not corporate enough. (Score:4, Interesting)
Google around. How about the special cash boxes built specifically to maximize the amount that could be shoved through the cutout in a teller's window. That's a BIG heap of cash being deposited frequently. Exactly the sort of thing that is supposed to trigger suspicion.
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HSBC was founded on the back of the opium highway, which is where most of their turnover still originates.
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More like the corporate types don't like competition.
Yea. Because same team.
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Citibank is famous for helping the drug cartels launder money :
http://www.pbs.org/wgbh/pages/... [pbs.org]
And Bank of America, Western Union, and JP Morgan, Goldman-Sacks, etc. are guilty too :
http://www.huffingtonpost.com/... [huffingtonpost.com]
http://www.washingtonsblog.com... [washingtonsblog.com]
http://www.npr.org/blogs/paral... [npr.org]
http://www.infowars.com/big-ba... [infowars.com]
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Now suddenly the free market, with its rule of supply and demand, is bad?
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First off, stop worshiping the free market, it's an abstraction, not some holy deity. It's a construct, nothing more.
Second off, your 'free market' is inherently amoral, and doesn't give a crap about good and bad. If it's profitable to sell women and children, someone will. Because the free market allows you to be a complete and utter douchebag if you can get away with it.
Which is precisely why the market doesn't achieve optimal out
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I admit, sarcasm is hard to identify in written word, but c'mon...
Trade $1,000,000 (Score:5, Insightful)
Help trade $1,000,000 for people to buy drugs for personal use: 2 years in prison.
Help trade $10,000,000,000 to help drug cartels launder money: er not sure. Remind me what happened to the HSBC execs again...
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Too big to fail = too big to jail.
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Help play a shell game to make $10,000,000,000,000 of crappy American junk debt look like AAA rated debt ... too big to fail or be prosecuted.
I think we can take it as a given by the time you're heading a bank or a major financial corporation you're a complete crook and a swindler, and are pretty much immune from prosecution ... in no small part because those in power probably profited from your crimes.
It's the little guys who the justice system is concerned with, the big fish operate with impunity and a wi
Re: Just bought boughtcoims (Score:3, Funny)
Yes. Sell them and buy rubles.
mis-read (Score:2)
I thought it said Charlie Sheen
Bitcoin =! anonymous. (Score:3)
Slashdot is the last place I would expect to see this myth.
Re: Bitcoin =! anonymous. (Score:3, Funny)
Slashdot is not the place where I would expect != to be misspelled.
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I gave up on spelling corrections some time ago. I was staying at a hotel and went down the hall to get a coke. The machine had a sticker on it that read "This machine does not except cash. Credit cards only!"
The war on spelling is lost, except it! :P
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So how does this work? (Score:2)
Does this mean anyone that deals in bitcoins in any way can now be sent to jail for drug trafficing?
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Depends on what you're doing with those Bitcoins. In this case the evidence was there to determine that the intention of the trades was to circumvent an auditable money trail in order for illegal transactions to be made.
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Just 'cause your imaginary friend is ok with it doesn't mean that it's sensible.
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I prefer to "neutralize" them. It sounds way more legal.
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Only if you specifically went around saying, "We're having you deposit money in our bank accounts so we can get around money laundering laws... Freedom to the people and down with the law..."
That's a paraphrase, but the judge in this case specifically said that he's going to jail because he knew he was getting around the law and that people were buying drugs with the money.
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So how come the US government has not declared war on every tax haven around the world because those countries know exactly what they are doing. Actively promoting global tax evasion, money laundering, promoting payment systems for major drug trades, government bribes and, arms dealing. Basically acting as the global financial system for organised crime which direct results in death and suffering of citizens from all those economies tax havens derive their parasitical existence.
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Because if the people who collectively make up the US government had it become public just how much money they have hidden in those tax havens it would be awkward.
See, if you are overtly helping people launder money or get around the law, it looks bad.
But if you can do it discretely, and in such a way as you may be doing more general banking for rich people ... well,
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is this judge going after the Ford Motor Company as well then? Because they're building cars with the knowledge that they might be used to kill people (and by his logic, 100% of whatever comes off the production line are material evidence in murder investigations).
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He was dealing with cash and bitcoin. Nothing else. So which one of those do you claim is illegal?
The person on the other side of the transaction might have been dealing with illegal goods, but that isn't and shouldn't be any of his business. Otherwise, you could make the exact same argument to persecute anyone who, for example, buys a car from somebody on Craigslist who then uses the cash to buy drugs.
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And a chop shop is just buying huge amounts of car parts for cash. What's wrong with that? Car parts are legal! Cash is legal! Come on, cut my cousin Vinnie a break, he's just a poor kid who grew up in the South Bronx, your honor!
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No, a chop chop receives the stolen cars (acting as an accomplice of the thief), disassembles them, and then sells the parts.
That part in parentheses is important: if the shop simply bought cars from whoever brought them in and then parted them out, that's a legitimate business.
Of course, cars are a little bit of a bad example because transferring ownership requires registering the title and whatnot. Let's talk about cellphones instead, since they don't: are those automated kiosks in the mall that let you t
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okay, this seems like it is going to degenerate into a pointless quibble over what an "accomplice" is, since the shit article has no discussion of the evidence or lack thereof. not interested.
at least you seem to have some idea of a general duty of responsibility. for example, it would be disingenuous for a chop shop to continue to accept, daily, a number of cars exceeding the legitimate resale market and of which a large number are later reported stolen. you probably understand that, so i don't really care
Bitcoin Exec ?!? (Score:5, Insightful)
Bitcoin Exec? Really? Is that like the Bitcoin CEO the media was reporting on earlier this year? C'mon slashdot... How about some accuracy in your headlines for a change?
There is no Bitcoin Exec because bitcoin is not a corporation. There are thousands of bitcoin related companies, but they each have their name. So maybe a title of "Bitinstant Exec..." would have been more accuracy.
Wrong on the guns (Score:5, Interesting)
Granted it was allowed at first, but SR distanced themselves from firearms and hadn't allowed their sale for some time at the time of the raid.
Re:Wrong on the guns (Score:4, Informative)
Silk Road did a spinoff where guns were being sold as the primary goods (the Armory) and they closed it because it wasn't profitable enough.
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They were okay with hitman contracts, but not with guns?
That's hilarious.
Huh? We jail CEOs now? (Score:2)
When did that happen? Why didn't I get the memo?