2 ms·

This is no different from many of the companies that Andreessen-Horowitz, Y Combinator, Sequoia, KPCB, and other big names have invested in. In fact, it's just

This is no different from many of the companies that Andreessen-Horowitz, Y Combinator, Sequoia, KPCB, and other big names have invested in. In fact, it's just the tip of the iceberg. More arrests will likely follow. I wouldn't be surprised if Dwolla and/or Veridian Credit Union is next. They were one of the largest pipes to the Silk Road. http://www.plainsite.org/flashlight/case.html?id=2434524 http://www.plainsite.org/flashlight/case.html?id=2434524

kylebrown 13y ago
The complaint is against two individuals: Faiella and Shrem. There is no complaint against the company BitInstant, nor arrests of any other employees. The complaint notes that BitInstant was actually a registered MSB (since March 26, 2012). The charge of operating an unlicensed MSB was not for operating BitInstant, but for an independent operation ("BTCKing") by Faiella and Shrem. In this case, there was evidence of blatant, specific conspiracy, hence the arrests and federal charges. That's different from the ThinkComp suit, which has broader concerns of inter-state registration. We've already seen government actions which were directly relevant to the concerns of your suit: seizure of MtGox assets held by Dwolla, the $500k fine on Square by the state of Florida, and the California DFI cease-and-desist to the Bitcoin Foundation. More of that is to be expected, against say Stripe and Coinbase. We did recently see a wide crackdown (arrests and domain seizures) on the whole network of LibertyReserve and exchangers, but those were offshore companies actively evading US banking and regulations. The situation with bitcoin exchanges (and the other defendants in the ThinkComp suit) is of a different nature, mostly about the specific approach to inter-state regulation, rather than blatant federal violations. If the ThinkComp defendants were directly doing payment processing for online poker (rather than one-decentralized-step removed, in the case of bitcoin), then I would expect another round of arrests. But the arrests would be for violation of federal UIGEA and bank fraud. Operating an MSB in an unlicensed state is punished by a fine, as seen with Square. But please, point out anything I might be confusing or overlooking. And keep fighting the (good) fight.

kylebrown 13y ago

The complaint is against two individuals: Faiella and Shrem. There is no complaint against the company BitInstant, nor arrests of any other employees. The complaint notes that BitInstant was actually a registered MSB (since March 26, 2012). The charge of operating an unlicensed MSB was not for operating BitInstant, but for an independent operation ("BTCKing") by Faiella and Shrem. In this case, there was evidence of blatant, specific conspiracy, hence the arrests and federal charges. That's different from the ThinkComp suit, which has broader concerns of inter-state registration. We've already seen government actions which were directly relevant to the concerns of your suit: seizure of MtGox assets held by Dwolla, the $500k fine on Square by the state of Florida, and the California DFI cease-and-desist to the Bitcoin Foundation. More of that is to be expected, against say Stripe and Coinbase. We did recently see a wide crackdown (arrests and domain seizures) on the whole network of LibertyReserve and exchangers, but those were offshore companies actively evading US banking and regulations. The situation with bitcoin exchanges (and the other defendants in the ThinkComp suit) is of a different nature, mostly about the specific approach to inter-state regulation, rather than blatant federal violations. If the ThinkComp defendants were directly doing payment processing for online poker (rather than one-decentralized-step removed, in the case of bitcoin), then I would expect another round of arrests. But the arrests would be for violation of federal UIGEA and bank fraud. Operating an MSB in an unlicensed state is punished by a fine, as seen with Square. But please, point out anything I might be confusing or overlooking. And keep fighting the (good) fight.