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.
Why should courts and IRS share the same definition of "currency"?
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Bitcoin Exchange CEO Pleads Guilty to Enabling Silk Road Drug Deals
31–40 of 52 posts
Re: Bitcoin Exchange CEO Pleads Guilty to Enabling Silk Road Drug Deals
#32Earlier quoted context omitted.
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, su…
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.
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.
Re: Bitcoin Exchange CEO Pleads Guilty to Enabling Silk Road Drug Deals
#33To 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.
more likely that they were under staffed and didn't have funding to hire a compliance officer
Likely but it doesn't take a trained compliance officer to not do the things Shrem did choose to do.
Look I'm not against drugs (born & raised in Amsterdam, never used but understanding of it) and Silk Road was mostly a voluntary marketplace without victims that reduced violence and crime involved with drugs being sold at night illegally on every streetcorner instead of anonymously online. It's a product of a system that ignores research and examples (like my country) that legalized markets provide more oversight, opportunity for regulation, for consumer safety, usage-limits, child-free zones etc, than a completely illegal unregulated market. And all Shrem did was enable people to participate in this market (which a priori is not illegal, as it traded baseball caps and hamburgers, too, Shrem was agnostic about what the bitcoins were used for, and did not even sell them to Silk Road users, but to someone who resold them to Silk Road users).
So I'm not against Shrem. BUT, he broke laws. And he did it knowingly and willingly. All the emails released by the court show he sent emails telling this guy of whom he knew was selling on the SR, to use different email addresses so that he wouldn't have to ban him (as his cofounder didn't like it), limit bank deposits to X amount per time (so that he wouldn't have to file a report to Fincen) etc etc. And then he didn't report anything even though in the emails he spoke of the need to do these reports, and told his cofounder of this responsibility. He literally instructed a customer how to avoid and evade the law over email secretly from his co-founder, and then chose not to do the due diligence he's legally required to do in terms of reporting large orders, despite communicating he was aware of this duty.
My point is, had nothing to do with being under staffed or having too little money to hire competence. Every 15 year old could have not made these mistakes. (if that is even true, they raised quite a bit of money and generated significant revenues very quickly, too)
Still, got nothing against the guy. The whole case is rooted on a non-sense drug policy.
Re: Bitcoin Exchange CEO Pleads Guilty to Enabling Silk Road Drug Deals
#34Earlier quoted context omitted.
>There is no provision in the constitution for the federal government to regulate money exchange. Er, what? If you fund or help fund a criminal enterprise, you can be prosecuted for it. If someone was funnelling millions of dollars to, say, a child sex slave ring, you think that the constitution protects their sending of that money and they can't be charged for it? I don't personally think drugs should be illegal at…
Without taking a position on whether I think is right as a policy matter, you're responding to a different point. is arguing (admittedly in a rant-y kind of way) that the U.S. Constitution is a document that grants limited and specific powers to the federal government and reserves the rest for the states and the people. That argument says those powers do not include the ability to regulate money exchange. An implicat…
You're right, I am responding to a completely different point because I didn't really want to argue about what kind of powers are and aren't granted to the federal government by the Constitution. etchalon did a great job at that: https://news.ycombinator.com/item?id=8277608
Ignoring the legal system and the Constitution entirely though (purely for the sake of argument), it makes practical sense that for offenses that constitute multistate or multinational money laundering, the federal government would be the most appropriate enforcer of the law.
Re: Bitcoin Exchange CEO Pleads Guilty to Enabling Silk Road Drug Deals
#35Earlier quoted context omitted.
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 momen…
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 Legislativ…
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.
Re: Bitcoin Exchange CEO Pleads Guilty to Enabling Silk Road Drug Deals
#36Earlier quoted context omitted.
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 momen…
>There is no provision in the constitution for the federal government to regulate money exchange. Er, what? If you fund or help fund a criminal enterprise, you can be prosecuted for it. If someone was funnelling millions of dollars to, say, a child sex slave ring, you think that the constitution protects their sending of that money and they can't be charged for it? I don't personally think drugs should be illegal at…
Ok, well you consider what was done here "funding crimes", by the law, is it is written, you are guilty of both funding drug sales AND child sex slavery. IT doesn't have to be millions of dollars, all that's necessary is that money that crossed your hands was used for those purposes.
Therefore, by your argument you're a felon.
That's why I'm saying the law is illegal. I'm saying you're not a felon.
But of course, I get down voted to hell here, just convincing me that there is no intelligent life to be found on hacker news.
Re: Bitcoin Exchange CEO Pleads Guilty to Enabling Silk Road Drug Deals
#37Earlier quoted context omitted.
Without taking a position on whether I think is right as a policy matter, you're responding to a different point. is arguing (admittedly in a rant-y kind of way) that the U.S. Constitution is a document that grants limited and specific powers to the federal government and reserves the rest for the states and the people. That argument says those powers do not include the ability to regulate money exchange. An implicat…
You're right, I am responding to a completely different point because I didn't really want to argue about what kind of powers are and aren't granted to the federal government by the Constitution. etchalon did a great job at that: https://news.ycombinator.com/item?id=8277608 Ignoring the legal system and the Constitution entirely though (purely for the sake of argument), it makes practical sense that for offenses that…
It's sad that you don't care about the quality of arguments or what the truth is. You just seem to care about what fits your ideology, which I'm sorry to say is fascist. (I await the time that another term is coined for this ideology so that I can stop using that one which people presume is a cheap insult rather than a precise description of an ostensible capitals society where the government has unlimited regulatory power.)
I submit to you that the "crime" of money laundering is one you're guilty of. I know for a fact, under the law, the way it is written you are guilty of it.
Thus you are advocating for your own incarceration.
Re: Bitcoin Exchange CEO Pleads Guilty to Enabling Silk Road Drug Deals
#38Earlier quoted context omitted.
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 momen…
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 Legislativ…
PS- you're using the term "money laundering" wrong. The same way that anyone the government doesn't like is labeled a terrorist, perfectly legal and innocent activities not associated with any crime are called "money laundering" under this law.
This is how propaganda is used to cause people to tell lies without even realizing it.
When you pay your credit card off from your checking account, but took money from your savings account first, that is "money laundering" under the law.
Re: Bitcoin Exchange CEO Pleads Guilty to Enabling Silk Road Drug Deals
#39Earlier quoted context omitted.
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 momen…
The essence of your legal theory is that "There is no provision in the constitution for the federal government to regulate money exchange." I guess it can be argued that the Section 8 clauses 5 and 6 do not grant the Federal Government the power to regulate the exchange of money. Nevertheless, the currently accepted interpretation of the Commerce Clause pretty much settles the question [1]. [1] http://en.wikipedia.or…
5: To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
6: To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;
Section 8, clause 5: Defines the weight of money. Section 8, clause 6: Allows for the punishment of counterfeiting.
Neither of these have anything to do with trading money between people.
I think that is why you did not quote them, you merely cited them expecting that most people would not bother to look them up and thus you would appear to have presented a slam dunk.
The commerce clause merely requires that no tariffs can be placed between commerce of the states. I find the phrase "currently accepted" in place of "criminal in practice" to be a convenient bit of spin.
Re: Bitcoin Exchange CEO Pleads Guilty to Enabling Silk Road Drug Deals
#40Earlier quoted context omitted.
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 momen…
So, we can't really say we have the "rule of law" here. We do have a rule of law, it just ain't perfect. Otherwise, we would be like China.
No, it's not that its imperfect, its that it is non existent.
We have the rule of men who can do pretty much whatever they want, without repercussions.
Imperfection would be if %10 of the TSA employees prosecuted got off without punishment.
Criminality is the situation where none of them will ever be prosecuted.
But just like Germans in the 40s who couldn't believe the holocaust happened because they couldn't comprehend the possibility that their government could be that evil... american kids, indoctrinated in state worship in state schools can't conceive of the possibility that their government is nothing more than a gang of violent criminal thugs.