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The Forbes article does a better job of explaining the case: > Shortly afterward, a person going by the name “Lucifallen21” got in touch to inquire about the a

by aazaa 5y ago

The Forbes article does a better job of explaining the case: > Shortly afterward, a person going by the name “Lucifallen21” got in touch to inquire about the ad, according to the search warrant. The IRS, without saying how, determined that Lucifallen21 was actually Evansville, Indiana, resident Chase Hite. By July, he’d agreed to buy from Mr. Coins, wrapping up $15,040 in cash in clothes, putting the money in a box and posting it to the agent in exchange for approximately 1.59 bitcoin, according to the government’s account. > ... > Further messages over Wickr indicated Hite was involved in dark web drug sales, claiming to sell “pills and opioids,” as well as cocaine and marijuana, the IRS claimed. ... https://www.forbes.com/sites/thomasbrewster/2021/09/01/irs-undercover-on-a-bitcoin-and-cryptocurrency-trading-site-in-180000-sting/ https://www.forbes.com/sites/thomasbrewster/2021/09/01/irs-u... Trading Bitcoin for cash is no crime. It appears the IRS claims it had evidence linking Hite to offers to sell drugs. So the Bitcoin sting was incidental to the case.

vmception 5y ago
Right. I’ve seen state level officials and FinCEN do stings on unregistered money service businesses, not registering does make trading bitcoin for cash to be a crime. But the IRS wouldnt be investigating that specifically - although they can easily recommend tagging that crime on to an indictment So it does make it tricky to determine what exactly they were investigating and charged the person with The IRS could look for money laundering which is the antithesis to catching someone for not reporting income. It is illegal to not report and it is illegal to report illicit source and it is illegal to report a licit source that actually had an illicit origin. The latter is money laundering and a money laundering conviction requires the government to prove that the source was illicit, as simple moving large amounts in a convoluted way is not sufficient for a money laundering charge or even an allegation/probable cause - except in the court of public opinion but who cares about that in money matters, I don’t.
- CompuHacker 5y ago
  > it is illegal to report illicit source I was under the impression that it was required to report all income, including criminal income.
  - vmception 5y ago
    Its illegal not to report and reporting that you did something illegal disclosed the illegal activity you did. Making your assets subject to forfeiture and criminal charges levied against you.
    - CompuHacker 5y ago
      To complete my thought, I was also under the impression that the IRS does not disclose criminal activity to any other entities automatically. This still seems to be the case in 2021, unless the tax return becomes evidence in a trial, or under some other conditions.

by aazaa 5y ago

vmception 5y ago

Right. I’ve seen state level officials and FinCEN do stings on unregistered money service businesses, not registering does make trading bitcoin for cash to be a crime. But the IRS wouldnt be investigating that specifically - although they can easily recommend tagging that crime on to an indictment So it does make it tricky to determine what exactly they were investigating and charged the person with The IRS could look for money laundering which is the antithesis to catching someone for not reporting income. It is illegal to not report and it is illegal to report illicit source and it is illegal to report a licit source that actually had an illicit origin. The latter is money laundering and a money laundering conviction requires the government to prove that the source was illicit, as simple moving large amounts in a convoluted way is not sufficient for a money laundering charge or even an allegation/probable cause - except in the court of public opinion but who cares about that in money matters, I don’t.

CompuHacker 5y ago
> it is illegal to report illicit source I was under the impression that it was required to report all income, including criminal income.
- vmception 5y ago
  Its illegal not to report and reporting that you did something illegal disclosed the illegal activity you did. Making your assets subject to forfeiture and criminal charges levied against you.
  - CompuHacker 5y ago
    To complete my thought, I was also under the impression that the IRS does not disclose criminal activity to any other entities automatically. This still seems to be the case in 2021, unless the tax return becomes evidence in a trial, or under some other conditions.