3 ms·
Despite all the accusations and bluster at the beginning, the indictment alleges three things: 1. Violation of 18 USC 1956[1] - knowingly laundering money; 2.
by jstalin 13y ago
Despite all the accusations and bluster at the beginning, the indictment alleges three things:
1. Violation of 18 USC 1956[1] - knowingly laundering money;
2. Violation of 18 USC 1960[2] - conspiring to operate an unlicensed money transmitting business;
3. Violation of 18 USC[3] - operating an unlicensed money transmitting business - 18 USC 1960 and 31 USC 5330
This is what distinguishes legitimate bitcoin dealers like coinbase from Liberty Reserve. It's clear from the allegations that Liberty Reserve was purposely managed (allegedly) to avoid registration and money-laundering regulations. They (allegedly) also purposely did not register as a money transmitting business.
The other difference is that Liberty Reserve was a centralized system for payment processing where the entire process was controlled by one entity. Bitcoin, on the other hand, separates the exchange of money for bitcoins and the actual use of the bitcoin ecosystem itself. Of course, the government can go after money transmission businesses like coinbase, but as long as coinbase is registered as a money transmitting business and takes care to ensure that it doesn't deal with shady funds, I don't see how the existing statutes could be used to prosecute coinbase.
Then question then becomes - who do you go after? At that point, bitcoin is no different than using cash. You can't prosecute "cash."
[1]: http://www.law.cornell.edu/uscode/text/18/1956 http://www.law.cornell.edu/uscode/text/18/1956
[2]: http://www.law.cornell.edu/uscode/text/18/1960 http://www.law.cornell.edu/uscode/text/18/1960
[3]: http://www.law.cornell.edu/uscode/text/31/5330 http://www.law.cornell.edu/uscode/text/31/5330
- hga 13y ago"You can't prosecute 'cash.'" Quibble, perhaps, but the US government does in asset forfeitures, e.g. this case in the previous decade, United States v. $124,700 in U.S. Currency (http://en.wikipedia.org/wiki/USA_v._$124,700 http://en.wikipedia.org/wiki/USA_v._$124,700). I would not be surprised to see a United States v. N Bitcoins in the future, one way or another (e.g. normal, or as part of shutting down something directly related to Bitcoin processing).
- patrickmay 13y agoAsset forfeiture denies people accused of a crime the means to defend themselves, without the state proving their guilt. It also sets up perverse incentives for the law enforcement agencies involved by rewarding them with a portion of the funds. It must be stopped. Forbes had a recent article on this: http://www.forbes.com/sites/stephendunn/2013/02/18/asset-forfeiture-is-anything-but-civil/ http://www.forbes.com/sites/stephendunn/2013/02/18/asset-for... The Cato Institute has some good material on this dysfunctional policy as well.
- rayiner 13y agoA "X v. $124,000 in U.S. currency" is not literally a suit against cash. It's just the stylization used for in rem suits (suits in which the subject of the action is physical property within the court's jurisdiction). For example, say you're held liable for a debt but flee the state. Nobody can sue you because the state can't assert personal jurisdiction over you if they can't find you. Generally what will happen in that case is that a proceeding will be initiated against your property in the state in order to satisfy your debt. Whether that property is cash, land, bitcoins, etc, is neither here nor there. But a proceeding against that property is not a way to shut down use of that kind of property. "State v. 34 acres at 456 Sandy Lane in Lincoln County" is not an attempt by the government to shut down the use of farm land.
- Spooky23 13y agoYou can't prosecute property, but you can initiate civil forfeiture proceedings against property, using the lower standards of proof that come in civil court. Carrying quantities of cash deemed suspect by law enforcement may result in that cash being seized without and criminal sanction against the owner.