3 ms·

This arrest is much more about Charlie Shrem than Bitcoin itself. While no one had any idea that this specific activity was happening, Charlie and Bitinstant w

This arrest is much more about Charlie Shrem than Bitcoin itself. While no one had any idea that this specific activity was happening, Charlie and Bitinstant were incredibly reckless and cash hungry for quite a while. About a year ago BitInstant became more Ponzi scheme than Bitcoin brokerage - see the last few hundred pages of complaints here: https://bitcointalk.org/index.php?topic=128314.7380 https://bitcointalk.org/index.php?topic=128314.7380 . There is also a pending lawsuit against Bitinstant itself awaiting class action certification, essentially alleging the cherry picking of transactions in order to maximize profits and eliminate market risk for them. http://www.scribd.com/doc/160406193/Bitinstant-Class-Action-Lawsuit http://www.scribd.com/doc/160406193/Bitinstant-Class-Action-... This case sheds new light on the reasons that they were unable/unwilling to deliver Bitcoins that they took money for. Charlie may have privately sold all of the Bitcoins in Bitinstant's possession at various times to this individual rather than deliver orders to normal customers in a timely manner. It would also be interesting to know whether the Winlklevoss twins - investors in Bitinstant and major Bitcoin holders - ever loaned Bitcoins to Bitinstant that ultimately wound up in the drug dealer's hands.

yapcguy 13y ago
The Winklevoss twins say: “We were passive investors in BitInstant and will do everything we can to help law enforcement officials. We fully support any and all governmental efforts to ensure that money laundering requirements are enforced, and look forward to clearer regulation being implemented on the purchase and sale of Bitcoins.” http://dealbook.nytimes.com/2014/01/27/two-executives-of-bitcoin-businesses-are-arrested/ http://dealbook.nytimes.com/2014/01/27/two-executives-of-bit... We don't know all the details of this case but I guess we can all agree that if justice is to be done, and more importantly perhaps, seen to be done, nobody should be given preferential treatment. This means bankers should be sent to prison instead of being allowed to buy their way out: "HSBC's $1.9 billion agreement with the U.S. to resolve charges it enabled Latin American drug cartels to launder billions of dollars was approved by a federal judge." http://www.bloomberg.com/news/2013-07-02/hsbc-judge-approves-1-9b-drug-money-laundering-accord.html http://www.bloomberg.com/news/2013-07-02/hsbc-judge-approves...
- downandout 13y ago
  I wouldn't expect the Winklevi to react any differently, and they are quite likely telling the truth. It would still be interesting to see if their BTC wound up being sent to this BTCKing character, since apparently a signficant percentage of the Bitinstant's BTC (at some points, all of their BTC) were being sent to BTCKing.

yapcguy 13y ago

The Winklevoss twins say: “We were passive investors in BitInstant and will do everything we can to help law enforcement officials. We fully support any and all governmental efforts to ensure that money laundering requirements are enforced, and look forward to clearer regulation being implemented on the purchase and sale of Bitcoins.” http://dealbook.nytimes.com/2014/01/27/two-executives-of-bitcoin-businesses-are-arrested/ http://dealbook.nytimes.com/2014/01/27/two-executives-of-bit... We don't know all the details of this case but I guess we can all agree that if justice is to be done, and more importantly perhaps, seen to be done, nobody should be given preferential treatment. This means bankers should be sent to prison instead of being allowed to buy their way out: "HSBC's $1.9 billion agreement with the U.S. to resolve charges it enabled Latin American drug cartels to launder billions of dollars was approved by a federal judge." http://www.bloomberg.com/news/2013-07-02/hsbc-judge-approves-1-9b-drug-money-laundering-accord.html http://www.bloomberg.com/news/2013-07-02/hsbc-judge-approves...

downandout 13y ago
I wouldn't expect the Winklevi to react any differently, and they are quite likely telling the truth. It would still be interesting to see if their BTC wound up being sent to this BTCKing character, since apparently a signficant percentage of the Bitinstant's BTC (at some points, all of their BTC) were being sent to BTCKing.