Feds Say Some Bitcoin Sellers into Money Launderers: Arrests Made
Incredibly, the U.S. government charged another person for selling Bitcoin; once again because they didn’t acquire a license to conduct business in Michigan.
The man is charged with basically “illegally” laundering money. He has been charged in U.S. District Court for the alleged crime. Charges were for selling Bitcoin without a license over a period of about two years.
He ran a Bitcoin exchange called LocalBitcoins, conducting business in various restaurants in the area. He reportedly sold about $150,000 in Bitcoin during that time.
The Feds set up a sting operation to catch the Bitcoin seller. During a series of 6 meetings he sold approximately $56,000 in Bitcoin to the Feds.
Interestingly, that means real sales were under $100,000. That’s important because at that level it triggers Federal laundering charges.
The sting had nothing to do with causing any problems or harm to people, it was nothing more than going after him for supposedly operating without a license for doing business.
What a total waste of time and money by the government to capture a non-criminal who was simply engaging in business. I don’t know Michigan law, but it sounds odd to me to have a person arrested and charged for selling Bitcoins. I didn’t know you needed permission to do so.
There have been other people in Michigan charged for engaging in similar practices.
With arrests happening in other states as well, it’s obvious the Federal government is attempting to smear Bitcoin and cryptocurrencies as dangerous, when in reality they’re a terrific, emerging technology that is making people wealthy, and providing ways of doing business transactions that save a lot of money.
It’s quite possible and probable the government is setting up the industry for heavy-handed regulation. We all know regulation of some sort is coming, and if done right, it should be a positive for the cryptocurrency industry.
But if done wrong, as it is being done here, it opens up the door for extreme regulation that could choke the nascient industry before it starts to really gain a foothold.
The U.S. government is playing catch-up now, and it’s going to be hard for it to keep up with the rapidly changing sector. It should just stay out of the way and let the market tell it which direction to go, rather than attempt to make criminals out of legitimate businessmen.
That said, now that the government is ramping up its efforts to rein in the cryptocurrency sector, it would be wise to do everything to ensure you’re meeting all the legal requirements.
I have no doubt many people would be shocked to know they would have to buy a business license in order to sell Bitcoins in some states.