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California Based P2P Trader Convicted of Illegal Money Transmission

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Re: California Based P2P Trader Convicted of Illegal Money Transmission

#51

Post by cheriot »

empath75 wrote: post #45
Scoundreller wrote: post #42

Earlier quoted context omitted.

But was still charged with more generic offences that have nothing to do with drugs.

That’s what those generic offenses are designed for. There’s nothing morally wrong with moving money around for people without validating their identity. But if you make it illegal than almost everyone doing it will be doing it to launder money or evade taxes, so if you catch someone at that, it’s almost certain that they have either committed another crime or have assisted someone else at committing a crime. The alt…

Wouldn't they still be guilty of tax fraud? Making more actions/people criminal just to catch the people that should be criminal more easily doesn't sit well.

Re: California Based P2P Trader Convicted of Illegal Money Transmission

#52

Post by mhluongo »

JumpCrisscross wrote: post #37
yason wrote: post #35

Not sure how the bitcoin part is relevant. AFAIK it's not a currency even if it wants to be. So same problems and rules should apply to other trading as well. What if he had been dealing cars instead of bitcoin? A guy comes in, buys a car in cash, drives away. You use the cash to buy more cars, wait for the next guy. You pocket the diff between how much you pay and how much you ask. How do you know the money isn't fr…

> What if he had been dealing cars instead of bitcoin? If you sell a car to someone knowing they paid with cash earned from dealing drugs, and then you proceed to not report that income, yes, it would be illegal. The unique role of Bitcoin appears to be sociological. The case with cars is highly infrequent. Swap cars with Bitcoin, however, and people seem to think it’s okay.

Those two things are regulated quite differently.

Re: California Based P2P Trader Convicted of Illegal Money Transmission

#53

Post by dsfyu404ed »

mikeash wrote: post #49
Scoundreller wrote: post #44

Earlier quoted context omitted.

What other commodities do I need to get a license to buy/sell?

Off the top of my head: food, cars, stocks, land, gasoline, scrap metal.

At a small enough scale and not in government-heavy states all of those are legal to do without any sort of license. When you start doing it regularly is when you need licenses.

Re: California Based P2P Trader Convicted of Illegal Money Transmission

#54

Post by dsfyu404ed »

seibelj wrote: post #38
yason wrote: post #35

Not sure how the bitcoin part is relevant. AFAIK it's not a currency even if it wants to be. So same problems and rules should apply to other trading as well. What if he had been dealing cars instead of bitcoin? A guy comes in, buys a car in cash, drives away. You use the cash to buy more cars, wait for the next guy. You pocket the diff between how much you pay and how much you ask. How do you know the money isn't fr…

There exists a cottage industry of individuals acting as money changers for bitcoin and other cryptocurrencies. It can be quite lucrative. This is (was?) a gray market, but judgements like this show the government considers it a black market. What’s interesting to me is that they didn’t simply nail her for buying and selling bitcoin without a money transmitters license. They also used the undercover agent to explicit…

>What’s interesting to me is that they didn’t simply nail her for buying and selling bitcoin without a money transmitters license. They also used the undercover agent to explicitly say it was drug money, ensuring worse penalties.

Creating crime to catch crime is pretty par for the course in federal investigations. The FBI is pretty well known to do it in terrorism cases. The ATF runs their botched illegal gun buying operations that create local crime.

Re: California Based P2P Trader Convicted of Illegal Money Transmission

#55

Post by mikeash »

dsfyu404ed wrote: post #53
mikeash wrote: post #49

Earlier quoted context omitted.

Off the top of my head: food, cars, stocks, land, gasoline, scrap metal.

At a small enough scale and not in government-heavy states all of those are legal to do without any sort of license. When you start doing it regularly is when you need licenses.

Does selling $2 million a year or more qualify as regularly?

Re: California Based P2P Trader Convicted of Illegal Money Transmission

#56

Post by Nasrudith »

dsfyu404ed wrote: post #54
seibelj wrote: post #38

Earlier quoted context omitted.

There exists a cottage industry of individuals acting as money changers for bitcoin and other cryptocurrencies. It can be quite lucrative. This is (was?) a gray market, but judgements like this show the government considers it a black market. What’s interesting to me is that they didn’t simply nail her for buying and selling bitcoin without a money transmitters license. They also used the undercover agent to explicit…

>What’s interesting to me is that they didn’t simply nail her for buying and selling bitcoin without a money transmitters license. They also used the undercover agent to explicitly say it was drug money, ensuring worse penalties. Creating crime to catch crime is pretty par for the course in federal investigations. The FBI is pretty well known to do it in terrorism cases. The ATF runs their botched illegal gun buying…

I wonder how often the cops get called on the FBI. I know that there was the post 9-11 clownish thing with an FBI informant in a mosque who got banned and reported to the FBI because he was a frothing radical that they wanted absolutely nothing to do with.

Re: California Based P2P Trader Convicted of Illegal Money Transmission

#57

Post by nradov »

cheriot wrote: post #51
empath75 wrote: post #45

Earlier quoted context omitted.

That’s what those generic offenses are designed for. There’s nothing morally wrong with moving money around for people without validating their identity. But if you make it illegal than almost everyone doing it will be doing it to launder money or evade taxes, so if you catch someone at that, it’s almost certain that they have either committed another crime or have assisted someone else at committing a crime. The alt…

Wouldn't they still be guilty of tax fraud? Making more actions/people criminal just to catch the people that should be criminal more easily doesn't sit well.

It wouldn't necessarily be tax fraud. Criminals are free to declare their income from illegal activities and pay taxes on it.

https://amp.cnn.com/money/2013/02/28/news/economy/illegal-in...

Re: California Based P2P Trader Convicted of Illegal Money Transmission

#58

Post by yason »

seibelj wrote: post #38
yason wrote: post #35

Not sure how the bitcoin part is relevant. AFAIK it's not a currency even if it wants to be. So same problems and rules should apply to other trading as well. What if he had been dealing cars instead of bitcoin? A guy comes in, buys a car in cash, drives away. You use the cash to buy more cars, wait for the next guy. You pocket the diff between how much you pay and how much you ask. How do you know the money isn't fr…

There exists a cottage industry of individuals acting as money changers for bitcoin and other cryptocurrencies. It can be quite lucrative. This is (was?) a gray market, but judgements like this show the government considers it a black market. What’s interesting to me is that they didn’t simply nail her for buying and selling bitcoin without a money transmitters license. They also used the undercover agent to explicit…

But since when bitcoin has been "money" as acknowledged to any official sense? As far as I can tell, it hasn't. That was my point: if bitcoin isn't currency or money then it's just trading bitcoins like trading any goods, be it fur, cars, or other supplies.

So the case really isn't about bitcoin but someone who took money from illegal sources and washed it clean. And didn't report that income, obviously. That's fine.

The interesting part would be to have in prosecution something bitcoin related that doesn't apply to other goods. And in that case it would be interesting to see why the same would not a problem if the parties were trading something else than bitcoin.

Re: California Based P2P Trader Convicted of Illegal Money Transmission

#59

Post by [deleted] »

ve55 wrote: post #4

The part about these convictions that bugs me is that some of the people getting in trouble were definitely not aware that they were breaking the law. It surprises a lot of people when they find out it's illegal to buy and sell bitcoin for cash to strangers in the US like this (that is, with no license or reporting or discrimination). I hope most of those convicted don't get jail time unless they truly knew that it m…

[deleted]

Re: California Based P2P Trader Convicted of Illegal Money Transmission

#60

Post by corey_moncure »

closeparen wrote: post #34
corey_moncure wrote: post #21

Earlier quoted context omitted.

Tax it like property, enforce other laws like it's currency... they get to have their cake and eat it too. It's all for your protection, of course, don't you know.

What do you mean “tax it like property”? Property taxes are only for real estate. Income earned in USD is subject to income tax; capital gains earned speculating on the forex market are subject to capital gains taxes. Both money transmitter and securities broker businesses require licensing. You can’t sell AAPL to someone in a park for a duffel bag full of cash. They could have gotten her under either theory (currenc…

https://www.irs.gov/newsroom/irs-virtual-currency-guidance

"IRS Virtual Currency Guidance: Virtual Currency Is Treated as Property for U.S. Federal Tax Purposes; General Rules for Property Transactions Apply"

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