
Bitcoin Exchange CEO Pleads Guilty to Enabling Silk Road Drug Deals - kloncks
http://www.wired.com/2014/09/bitcoin-exchange-ceo-pleads-guilty-in-silk-road-case/
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codeshaman
I'd argue that Bitcoin owns it's meteoric rise to SilkRoad and drugs in
general. Many people 'got into' bitcoin in order to be able to purchase stuff
on SilkRoad or similar. I know I'm one of them and I'm really thankful for
those 3 hits of acid which cost me 3.3 BTC at the time. The transaction worked
so I've decided to invest a lot more in Bitcoin. Up to this day I'm living off
that investment and able to work on my dream projects. And the acid was very
good as well ;).

~~~
dmm
It's hard to say yet how much of an effect MtGox price manipulation had too.
Have you seen this report?

[http://willyreport.wordpress.com/2014/05/25/the-willy-
report...](http://willyreport.wordpress.com/2014/05/25/the-willy-report-proof-
of-massive-fraudulent-trading-activity-at-mt-gox-and-how-it-has-affected-the-
price-of-bitcoin/)

~~~
IkmoIkmo
It's a very contested report, see for example a post in a broader discussion
on it here:

[http://www.reddit.com/r/Bitcoin/comments/26g46e/the_willy_re...](http://www.reddit.com/r/Bitcoin/comments/26g46e/the_willy_report_proof_of_massive_fraudulent/chqs6ef)

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anigbrowl
_To make matters worse, while Shrem was CEO he was simultaneously BitInstant’s
compliance officer, responsible for ensuring that his company followed the
law._

Impressive amount of hubris there.

~~~
patio11
With respect: I know you're a professional at this, but I work with many
startups who need named compliance officers for HIPAA or AML purposes, and it
is the CEO virtually everywhere. This decision is generally made less out of
hubris and more because a) the position has a very high ratio of requiredness
to actual duties and b) legal advisors recommended that naming the CEO as
opposed to a summer intern would suggest enthusiastic compliance.

Who gets tapped for this sort of thing in your world?

~~~
anigbrowl
Oh, I didn't mean it was hubristic being the compliance officer! I meant
shoveling all the BTC around while knowing he didn't have even a figleaf of
deniability (eg blaming an internal miscommunication with someone else who was
in charge of compliance). He had to know it was enormously risky.

~~~
patio11
Oh, my bad. Yep, total agreement. Did you read the complaint? Comedy gold
abounded.

~~~
anigbrowl
Not yet but I will now :D

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transfire
When will the law stop violating the rights of free men?

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meowface
When people decide to change the law.

If you think drugs should be illegal, then justice was served here. If you
don't think drugs should be illegal, then it wasn't.

Either way, Shrem's behavior seems pretty idiotic to me, from start to finish.

~~~
MCRed
There is no provision in the constitution for the federal government to
regulate money exchange. Thus the law he was convicted under is itself a
criminal act (and under USC 18-242 everyone enforcing it is a felon).

The constitution is the highest law of the land. If you think this guy belongs
in jail, then you need to amend it.

The supreme court has already ruled that unconstitutional laws are null and
void the moment they are passed. They do not need to be struck down by the
supreme court.

Remember the legislature, executive and judicial branches all derive their
power from the constitution, thus none of them have the power to exceed the
power it gives them, by definition.

The real problem here is not that people haven't changed the law (which they
can't since the people are not in power).

The problem is we have a criminal syndicate for a government.

This is why there are no prosecutions for spying on the NSA's part, despite
breaking the law. This is why the TSA violates the fourth amendment with
impunity (again, a violation of USC 18-242) without ever there being charges
filed.

Hell, the TSA is violating state criminal statutes in most states when they
molest minors who opt out of having their nude photos taken (which itself is
child pornography).

No charges have been filed. Why is that?

So, we can't really say we have the "rule of law" here.

The law only is used against people like Charlie, never against the rulers.

~~~
etchalon
The Constitution granted the Federal Government limited powers. But included
in those powers is the power to self-define and self-regulate.

Thus, should the legislature pass a law, and should the Supreme Court uphold
that law, it is deemed Constitutional by the body specifically-empowered to
make that determination.

The Money Laundering Control Act made the laundering of money a crime. It was
passed by the Legislative branch of the Federal Government as prescribed by
the Constitution.

The MLCA has been upheld by the Supreme Court, or rather, cases have been
brought before in which the government's prosecution has rested on enforcement
of the law, and the Justices have upheld it by interpreting the law, as
written, without deeming it unconstitutional (Santos, Schueller, etc.)

Thus, the law is Constitutional pending some future case.

Thus everything you just said is nonsense words.

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MCRed
In order to rebut what I said, you would need to show where the federal
government is given this power in the enumerated powers clause. You have not.

What you have merely done is engage, effectively in ad hominem along with a
string of irrelevant assertions that to an in unformed, or unthinking reader
might sound like an argument.

And of course, in grand hacker news tradition, downvote me so that people
cannot see my comment, for the "crime" of making an argument that undermines
your political ideology.

~~~
etchalon
I think you got down voted because what you said is provably idiotic.

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cridenour
It's interesting that Bitcoin is not classified as a currency by some parts of
the government but it was considered a money-transmitting business.

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jdong
Why should courts and IRS share the same definition of "currency"?

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IkmoIkmo
Well imagine the police arrests you because it says drugs are illegal, but the
courts say they're not. But you still go to jail, because the police says it's
illegal. That would be pretty strange.

Similarly, it's strange for the IRS to say you need to pay X taxes because the
IRS says it's not a currency, but the courts say it is. But you still need to
pay the taxes.

There are reasons for why this might make sense, sure, but it's also easy to
see why some people find it strange or confusing.

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jdong
Sure, but you can use anything a currency. And being able to avoid the laws
just by using something that isn't officially recognized would be rather dumb.

You might as well be using cows as a currency, it'd be no different from
bitcoins.

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IkmoIkmo
_You might as well be using cows as a currency, it 'd be no different from
bitcoins._

Characteristics are much more important than arbitrary definitions because
what we want to call something is mostly subjective, characteristics aren't so
much. i.e. a fork can be called a utensil or a weapon, but its characteristics
are the same: sharp, pointy, rigid etc.

For example, you could say 'anything is a weapon', and thereby we're not
allowed to bring clothing on to an airplane, because someone could use a
tshirt to strangle a person. That would be completely true, and there
certainly will have been people who've been strangled by a tshirt in the past
20 years. But that doesn't mean we should ban it and call it a weapon, because
it doesn't have the characteristics or use of a weapon ordinarily and is
barely a weapon.

Same for cows. Yes you could use it as a currency, but it doesn't have the
characteristics of a currency (fungible? no, divisible? no, portable? no, long
term store of value? no, precise unit of account? no) while bitcoins are
divisible (up to 100 millionth of a bitcoin), portable (obviously), precise
unit of account (yes), store of value (possibly, in my opinion probably but
time will have to tell). So indeed cows are treated very differently for the
right reasons, as it's not a good form of money and thereby isn't used as
money generally. If cows had good characteristics as money, it'd be used a
lot, and we'd see people try to use cows to launder money on a massive scale
naturally (because any legal money will be used illegally too, and that must
find its way back into the system at some point), and then you'd see money
transmission laws include cows as a 'money-substitute' just like bitcoin. But
they aren't, because they aren't actually a money-substitute, because cows
suck as money.

 _Sure, but you can use anything a currency. And being able to avoid the laws
just by using something that isn 't officially recognized would be rather
dumb._

I agree which is why US institutions have moved to officially recognize
bitcoin as a certain thing, so the laws that apply to those things apply to
bitcoin, too. For the IRS that's taxation law on property, for Fincen that's
money-like products.

