CEO OF BITCOIN EXCHANGE ARRESTED

[Tony_FLADEM]

Source: Business Insider

The CEO of BitInstant, a Bitcoin exchange, has been arrested at JFK airport and charged with money laundering.

Charlie Shrem, along with a co-conspirator, is accused of selling over $1 million in Bitcoin to Silk Road users, who would then use them to buy drugs and other illicit items.

"Hiding behind their computers, both defendants are charged with knowingly contributing to and facilitating anonymous drug sales, earning substantial profits along the way," DEA agent James Hunt said in a release.

Shrem is also listed as a vice chairman at the Bitcoin Foundation.

BitInstant.com is currently offline. It was recently the subject of a class-action suit alleging misrepresentation of its services.

The arrest comes on the eve of a two-day state hearing about the future of Bitcoin in New York.

Full release from the Justice Department:




Read more: http://www.businessinsider.com/report-ceo-of-major-bitcoin-exchange-arrested-2014-1?utm_content=buffer58c83&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer

[Blue_Tires]

1. wow...not good....

[billhicks76]

24. Wait A Minute

So they are going to go after HSBC and Wachovia now?

[Spirochete]

2. I thought that said

Charlie Sheen for a second. Cleaning my glasses now...

[DeSwiss]

3. Smoke & Mirrors :-/ n/t

[JoeyT]

4. Meanwhile JP Morgan and Citi remain more or less unpunished.

Which means his crime wasn't money laundering for drug dealers, it's was money laundering for drug dealers without kicking the right bribes to the right politicians.

[fujiyama]

28. That's putting it lightly

The fines they face is pretty much window dressing.

These banks flaunt their crimes in public and get handed huge chunks of the GDP on a platter.

[villager]

5. And I'm sure they'll be arresting bank CEOs for drug/terrorism money laundering next!

In the spirit of equal justice, and all...

[AtheistCrusader]

6. What a stupid headline.

Not your fault of course, you copy-pasted it exactly. Still. It's ONE bitcoin exchange. not the whole damn thing. This sort of thing has happened before.

[phantom power]

8. that's pretty standard -- like "CEO of Bank arrested"

Generally understood that its some particular bank, not "all banks"

[AtheistCrusader]

9. I don't think a lot of people understand how BitCoin works.

But I hope you are right. It's an interesting financial technology. I don't know if its viable long term, but it'll be interesting to find out.

[Amonester]

14. The latest I read about it, the encryption keys it uses aren't secured after all, and ...

... that, once the creator of the concept himself was informed of that flaw, he got out of it all and left the whole thing behind.

Dunno if it's true or false, but I would never touch that crap even with a ten-foot pole.

[phantom power]

21. I'm also very curious. It's one of those technologies...

where social and political considerations are likely to swamp any practical issues. Actually, I suppose that describes all technologies.

The most interesting *technical* argument I've read is that the computational cost of block chain checksums makes bitcoins *inherently* deflationary. I'm not entirely convinced that's true, but I haven't proven it's wrong either. This claim is not to be confused with the specific monetary policy goals of its founders, where they appear to specifically want a deflationary policy, whether it is implied by the technology or not.

[MADem]

26. I think it sounds like a financial Pet Rock, actually!

I think it's a fad, and once people stop believing, it'll crash and burn.

But who knows? Time will tell!

[PatrynXX]

11. bit closer to bitcoin though

Shrem is also listed as a vice chairman at the Bitcoin Foundation.

although for all I know all the affiliates are vice chairmen

[AtheistCrusader]

13. Huh, that's actually a good point.

I did miss that tidbit.

[pnwmom]

19. Headlines very rarely use articles. Most people understand this is just one company.

But the others are equally susceptible to being mis-used.

[Downwinder]

7. Is Obama going to be arrested if drugs are purchased with dollars?

[Julian Englis]

15. Don't give the knuckleheads ideas n/t

[Demeter]

17. Love to get Timmy on that!

Of course, he's moved on to the Big Time. Hedge fund CEO, don't you know...

[geek tragedy]

18. bitcoins aren't legal tender or currency. they're not issued or backed

by a sovereign.

[Xithras]

25. Bitcoins are not legal tender, but they are a legal currency.

"Legal tender" means a currency backed by a government.

"Currency" is any medium used to exchange items or wealth of any form. If I buy an acre of land from you for 20 cows, the cows are currency. There is no connection in the English language between the term "currency" and government. The only requirement for something to be a "currency" is that both parties have to agree on its value and exchangeability.

"Legal Currency" simply means a form of currency not banned by a government. The 1933 Emergency Banking Act made it illegal to use gold as a form of currency, so gold was no longer a legal currency in the United States. Cows, on the other hand, have always been a form of legal currency. "Legal tender" is a form of "currency", but the two terms do not mean the same thing.

Bitcoin is legal currency, but not legal tender. It's a legitimate and legal medium in which to exchange items or value, but it is not backed by a government.

[Nihil]

29. Good explanation - thanks! (n/t)

[NCcoast]

10. Of course Wachovia laundered $378 million in drug money

And that was just fine.

[Helen Borg]

12. Glad I don't have any shares

nt

[Demeter]

16. I don't see how the feds have a leg to stand on

Are they going to go after BofA for their clients use of their private funds?

[pnwmom]

20. Of course a self-regulated money supply is going to be susceptible to this.

It was just a matter of time. Bit coin is today's tulip.

[DreamSmoker]

22. Illegal Drugs sales is just an excuse

We are now in a Police State as it is..
Just how much more of our freedom will we give up at this point in time???
My God, Law Enforcement now has more rights than you and I combined..

[Tommy_Carcetti]

23. All I know about Bitcoin is that liberatarians love it.

Which immediately makes me suspicious.

[fujiyama]

27. And Jaime Dimon gets a couple million dollar bonus.

The DEA is a racket. I'm no conspiracy theorist, but this is so blatant it in driving it home who really controls every lever of this so called "Democracy".