First topic message reminder :
By Matt Egan
Published January 27, 2014
FOXBusiness
Federal prosecutors unsealed criminal charges on Monday against a pair of individuals who they say sold Bitcoins that were later used to buy and sell drugs on Silk Road, signaling a desire by law enforcement to target those who use crypto currencies to facilitate shady activities.
The complaint marks the latest fallout from Silk Road, the online drug bazaar that U.S. authorities shut down last year and later seized millions of dollars worth of Bitcoin from. It also highlights a concerted effort to crack down on those who use Bitcoin to enable illicit activities.
“When Bitcoins, like any traditional currency, are laundered and used to fuel criminal activity, law enforcement has no choice but to act,” Manhattan U.S. Attorney Preet Bharara said in a statement. “We will aggressively pursue those who would coopt new forms of currency for illicit purposes.”
This isn’t the first time Bharara’s office has gone after a digital currency. Last year, the U.S. successfully shut down Liberty Reserve, which it accused of handling $6 billion worth of illicit transactions.
“Basically, the government is putting the industry on notice. Either you do what we’re asking for or we’re going to put you out of business,” said Annemarie McAvoy, a former federal prosecutor who is now a professor at Fordham Law School. “They’ve brought two (cases), and I’m sure this is not the last.”
The two individuals named in the charges are Robert Faiella, who prosecutors say was an underground Bitcoin exchanger, and Charlie Shrem, CEO and compliance officer of a Bitcoin exchange company.
Federal prosecutors charged Faiella, 52, and Shrem, 24, with engaging in a scheme to sell more than $1 million of Bitcoins to users of Silk Road. Each defendant was charged with conspiring to commit money laundering, which carries a maximum prison sentence of 20 years. They are additionally charged with operating an unlicensed money transmitting business, which has a max sentence of five years in prison.
The U.S. also charged Shrem with violating the Bank Secrecy Act by “willfully failing” to file suspicious activity reports on Faiella’s questionable transactions. This charge carries a maximum sentence of five years in prison.
The charges highlight how one of the characteristics that makes Bitcoin appealing -- its privacy -- has put the currency in the crosshairs of law enforcement. Last year, a division of the Treasury Department issued new legal guidelines saying exchangers of digital currencies must register as money services businesses and comply with anti-money laundering regulations. “Law enforcement wants to be able to maintain control. They want to be able to follow the money. Here, you can’t – and that’s worrying them,” said McAvoy. In addition to the Manhattan U.S. Attorney, the charges were announced by the Drug Enforcement Agency and the criminal investigation division of the Internal Revenue Service.
“Hiding behind their computers, both defendants are charged with knowingly contributing to and facilitating anonymous drug sales, earning substantial profits along the way,” said DEA acting special-agent-in-charge James Hunt.
Schrem was apprehended by authorities at JFK International Airport in New York on Sunday and is set to appear in federal court in Manhattan later on Monday. Faiella was arrested at his Cape Coral, Fla., home on Monday and is expected to appear in federal court in the Middle District of Florida.
The court documents allege Faiella operated an underground Bitcoin exchange on the Silk Road website between December 2011 and October 2013 that sold the crypto currency to users who wanted to buy illegal drugs on the site. After receiving orders, he filled them through a New York company designed to enable customers to exchange cash for Bitcoins anonymously, the U.S. alleges.
Shrem served as the New York Bitcoin company’s CEO during much of that timeframe and was “fully aware that Silk Road was a drug-trafficking website” and that Faiella was operating an exchange service for Silk Road users, the documents say.
Prosecutors say Shrem still did business with Faiella to maintain a “lucrative source” of revenue. He personally processed Faiella’s orders, gave him discounts on high-volume transactions, failed to file a single suspicious activity report and even helped Faiella “circumvent” the company’s anti-money laundering policies, the documents allege.
Bharara said the investigation remains ongoing.
The value of Bitcoin tumbled in October following the FBI raid of Silk Road, which resulted in the forfeiture of about 29,655 Bitcoins. The action underscored the legal and regulatory concerns that continue to dog Bitcoin even as its value has surged over the past two years
http://www.foxbusiness.com/technology/2014/01/27/us-charges-bitcoin-exchangers-linked-to-silk-road-drug-bazaar/
U.S. Charges Bitcoin Exchangers Linked to Silk Road Drug Bazaar
By Matt Egan
Published January 27, 2014
FOXBusiness
Federal prosecutors unsealed criminal charges on Monday against a pair of individuals who they say sold Bitcoins that were later used to buy and sell drugs on Silk Road, signaling a desire by law enforcement to target those who use crypto currencies to facilitate shady activities.
The complaint marks the latest fallout from Silk Road, the online drug bazaar that U.S. authorities shut down last year and later seized millions of dollars worth of Bitcoin from. It also highlights a concerted effort to crack down on those who use Bitcoin to enable illicit activities.
“When Bitcoins, like any traditional currency, are laundered and used to fuel criminal activity, law enforcement has no choice but to act,” Manhattan U.S. Attorney Preet Bharara said in a statement. “We will aggressively pursue those who would coopt new forms of currency for illicit purposes.”
This isn’t the first time Bharara’s office has gone after a digital currency. Last year, the U.S. successfully shut down Liberty Reserve, which it accused of handling $6 billion worth of illicit transactions.
“Basically, the government is putting the industry on notice. Either you do what we’re asking for or we’re going to put you out of business,” said Annemarie McAvoy, a former federal prosecutor who is now a professor at Fordham Law School. “They’ve brought two (cases), and I’m sure this is not the last.”
The two individuals named in the charges are Robert Faiella, who prosecutors say was an underground Bitcoin exchanger, and Charlie Shrem, CEO and compliance officer of a Bitcoin exchange company.
Federal prosecutors charged Faiella, 52, and Shrem, 24, with engaging in a scheme to sell more than $1 million of Bitcoins to users of Silk Road. Each defendant was charged with conspiring to commit money laundering, which carries a maximum prison sentence of 20 years. They are additionally charged with operating an unlicensed money transmitting business, which has a max sentence of five years in prison.
The U.S. also charged Shrem with violating the Bank Secrecy Act by “willfully failing” to file suspicious activity reports on Faiella’s questionable transactions. This charge carries a maximum sentence of five years in prison.
The charges highlight how one of the characteristics that makes Bitcoin appealing -- its privacy -- has put the currency in the crosshairs of law enforcement. Last year, a division of the Treasury Department issued new legal guidelines saying exchangers of digital currencies must register as money services businesses and comply with anti-money laundering regulations. “Law enforcement wants to be able to maintain control. They want to be able to follow the money. Here, you can’t – and that’s worrying them,” said McAvoy. In addition to the Manhattan U.S. Attorney, the charges were announced by the Drug Enforcement Agency and the criminal investigation division of the Internal Revenue Service.
“Hiding behind their computers, both defendants are charged with knowingly contributing to and facilitating anonymous drug sales, earning substantial profits along the way,” said DEA acting special-agent-in-charge James Hunt.
Schrem was apprehended by authorities at JFK International Airport in New York on Sunday and is set to appear in federal court in Manhattan later on Monday. Faiella was arrested at his Cape Coral, Fla., home on Monday and is expected to appear in federal court in the Middle District of Florida.
The court documents allege Faiella operated an underground Bitcoin exchange on the Silk Road website between December 2011 and October 2013 that sold the crypto currency to users who wanted to buy illegal drugs on the site. After receiving orders, he filled them through a New York company designed to enable customers to exchange cash for Bitcoins anonymously, the U.S. alleges.
Shrem served as the New York Bitcoin company’s CEO during much of that timeframe and was “fully aware that Silk Road was a drug-trafficking website” and that Faiella was operating an exchange service for Silk Road users, the documents say.
Prosecutors say Shrem still did business with Faiella to maintain a “lucrative source” of revenue. He personally processed Faiella’s orders, gave him discounts on high-volume transactions, failed to file a single suspicious activity report and even helped Faiella “circumvent” the company’s anti-money laundering policies, the documents allege.
Bharara said the investigation remains ongoing.
The value of Bitcoin tumbled in October following the FBI raid of Silk Road, which resulted in the forfeiture of about 29,655 Bitcoins. The action underscored the legal and regulatory concerns that continue to dog Bitcoin even as its value has surged over the past two years
http://www.foxbusiness.com/technology/2014/01/27/us-charges-bitcoin-exchangers-linked-to-silk-road-drug-bazaar/
Today at 7:38 am by Rocky
» Iraq doubles its investments in modern irrigation engineering by no less than 20%
Today at 7:36 am by Rocky
» Confirming to Shafaq News... The Sudanese arrives in Saudi Arabia to participate in the World Econom
Today at 7:31 am by Rocky
» Al-Sudani announces that clues have been found leading to those involved in the Kormor bombing
Today at 7:29 am by Rocky
» Special: Deconstructing the mystery of the repeated targeting of the Kormor field
Today at 7:28 am by Rocky
» Increase in foreign remittance sales at the Central Bank of Iraq
Today at 7:27 am by Rocky
» Al-Maliki: The salaries of the region’s employees are continuing, and there will be solutions to del
Today at 7:26 am by Rocky
» utube MM&C 4/28/24 Iraq Dinar - IQD - Banks - Merge Regionally - Water - Labor -Jobs - Dinar Value
Today at 6:32 am by Rocky
» Minister of Resources: Iraq is one of the countries most affected by climate change
Today at 6:29 am by Rocky
» Al-Sudani arrives in Riyadh to participate in the World Economic Forum
Today at 6:27 am by Rocky
» An Arab call to the countries neighboring Iraq regarding the share of water
Today at 6:26 am by Rocky
» IMF: Poor productivity is responsible for 50% of the decline in economic growth
Today at 6:20 am by Rocky
» The President of the Republic stresses to Barzani the importance of focusing on construction, recons
Today at 6:19 am by Rocky
» Will Iran lose the Iraqi market? 20 million dollars is threatened with loss
Today at 6:18 am by Rocky
» Parliamentary Economy: Parliament will extend the legislative term to approve the budget
Today at 6:13 am by Rocky
» The price of the dollar is close to 145 thousand dinars؛ how much is $100 worth of transactions؟
Today at 6:13 am by wciappetta
» A factory for producing electric cars
Today at 6:12 am by Rocky
» Prime Minister: We have launched strategies to improve the conditions of workers
Today at 6:10 am by Rocky
» Economic prospects from America to Türkiye
Today at 6:09 am by Rocky
» Al-Rayes: The path of development is the first gateway to sustainable economic advancement
Today at 6:08 am by Rocky
» Days after announcing the connection with Jordan, an almost complete absence of electricity in Ramad
Today at 6:06 am by Rocky
» A Kurdistan delegation meets with the Ministry of Finance in Baghdad to discuss “revenues and implem
Today at 6:05 am by Rocky
» Parliamentary Economy reviews files and the importance of Sudanese’s upcoming visit to Saudi Arabia
Today at 5:59 am by Rocky
» Al-Maliki talks about postponing the Kurdistan Parliament elections and says that salary transfers w
Today at 5:54 am by Rocky
» The President of the Republic and Barzani discuss the results of Sudanese’s visit to the United Stat
Today at 5:53 am by Rocky
» The Ministry of Finance is "dizzy"... An expert points out a "lapse" in the budget schedules: Februa
Today at 5:49 am by Rocky
» Sudanese Advisor: The 2024 budget has entered into force... and there is no need to send its schedul
Today at 5:43 am by Rocky
» The Iraqi dinar is recovering against the US dollar in local markets
Today at 5:42 am by Rocky
» Iraq.. The claim that OPEC’s decisions affect oil derivatives only and not crude is “inaccurate”
Today at 5:39 am by Rocky
» Al-Bawi: Erdogan failed in his promises to his people and seeks to plunge Iraq into its conflict wit
Today at 5:37 am by Rocky
» The Sudanese and his battle against corruption.. Where is the fault with the government or with the
Today at 5:36 am by Rocky
» Amnesty International criticizes Iraq's implementation of 13 death sentences
Today at 5:34 am by Rocky
» The ambassador is very angry with Parliament: The homosexuality law obstructs the government and har
Today at 5:33 am by Rocky
» Al-Mandalawi: There is no place for homosexuality in the Iraq of the prophets and saints, and that i
Today at 5:32 am by Rocky
» Al-Sudani receives the President of the University: Towards the strength and status of the Arab syst
Today at 5:31 am by Rocky
» Ayed Al-Hilali: All leaders are discussing “the finer details of Sudanese” tonight, and Barzani join
Today at 5:30 am by Rocky
» He announced the reception of offers from three alliances from international companies for the Baghd
Today at 5:28 am by Rocky
» During his meeting with the head of the Iraqi Journalists Syndicate... Al-Amiri stresses the importa
Today at 5:26 am by Rocky
» To address the dollar exchange rate... Mazhar Muhammad explains the risks of floating the Iraqi dina
Today at 5:25 am by Rocky
» During the launch of the Arab Labor Conference in its 50th session in Baghdad... Al-Sudani: We launc
Today at 5:24 am by Rocky
» Saudi Arabia announces an increase in direct flights with Iraq
Today at 5:23 am by Rocky
» Resources: Government measures have contributed to improving the water situation in Iraq
Today at 5:22 am by Rocky
» Al-Sadr: The voice of American universities calling for an end to Zionist terrorism is our voice
Today at 5:21 am by Rocky
» International organization: 50% of displaced Iraqis lack official documents
Today at 5:20 am by Rocky
» Al-Sudani: The path of development will provide many job opportunities
Today at 5:19 am by Rocky
» Parliament Finance: The necessity of converting tax and customs revenues to digital processing
Today at 5:18 am by Rocky
» Al-Sudani announces that clues have been found to uncover those involved in the Kormor bombing
Today at 5:16 am by Rocky
» The start of the work of the Fourth Baghdad International Water Conference
Today at 5:09 am by Rocky
» The Council of Ministers will suspend official working hours next Wednesday
Today at 5:07 am by Rocky
» An almost complete outage of water and electricity in western Anbar
Today at 5:06 am by Rocky
» Parliamentary expectations of extending the legislative term to approve the budget
Today at 5:00 am by Rocky
» Education: The cost of participating in the electronic school will amount to 200 thousand dinars
Today at 4:59 am by Rocky
» Al-Sudani arrives in Riyadh to participate in the World Economic Forum
Today at 4:58 am by Rocky
» A newspaper reveals a dark world that brings together bloggers and politicians
Today at 4:57 am by Rocky
» Al-Marsoumi: The bombing of the Kormor field undermined efforts to achieve self-sufficiency in gas
Today at 4:55 am by Rocky
» utube MM&C 4/24/24 Support - USA- Turkey - Timing- Currency Value - Tabled
Yesterday at 3:18 pm by Rocky
» utube MM&C 4/26/24 Iraqi Dinar - US Treasury Exchange Rates- Focus - Banking Partnerships - Rate C
Yesterday at 3:17 pm by Rocky
» Parliamentary efforts to transform Iraq into a global market for transferring Internet capacities
Yesterday at 3:07 pm by Rocky
» A parliamentary committee that enriches the political forces: Stop plundering Iraq’s wealth and work
Yesterday at 2:56 pm by Rocky
» Politician: Salem Al-Issawi is the most likely to assume the presidency of Parliament
Yesterday at 2:55 pm by Rocky
» Al-Sudani: The world today is witnessing crises whose impact has been reflected in the global econo
Yesterday at 10:50 am by Rocky
» The Federal Court responds to an inquiry by Al-Sudani regarding the powers of the provincial council
Yesterday at 10:40 am by Rocky
» Among them are the Iraqis... a list of the most sought-after immigrants to America
Yesterday at 10:38 am by Rocky
» An expert talks about the "biggest barrier" and the positives of merging Iraqi and Arab banks
Yesterday at 10:29 am by Rocky
» The House of Representatives adjourns its session
Yesterday at 10:24 am by Rocky
» Parliamentary demands to expedite the legislation of the Eid al-Ghadir holiday law (documents)
Yesterday at 10:23 am by Rocky
» Parliament adds the paragraph “Electing the Speaker of the House of Representatives” to its agenda
Yesterday at 10:21 am by Rocky
» Alsumaria publishes the text of the law against prostitution and homosexuality
Yesterday at 10:20 am by Rocky
» A parliamentarian reveals the reason for the failure of the Speaker of Parliament to pass during tod
Yesterday at 10:19 am by Rocky
» Al-Sudani: The government has launched many strategies and initiatives that will improve the reality
Yesterday at 9:42 am by Rocky
» International Business: Iraq has made progress in supporting businesses through investment and priva
Yesterday at 9:33 am by Rocky
» Association of Banks: Iraq is witnessing great development in the transition to electronic governmen
Yesterday at 9:25 am by Rocky
» The House of Representatives votes to add an item to its agenda (election of the Speaker of the Hous
Yesterday at 9:22 am by Rocky
» Parliamentary integrity: Combating corruption requires parliamentary legislation
Yesterday at 9:15 am by Rocky
» Al-Karaawi: America is trying to restrict Iraq
Yesterday at 9:13 am by Rocky
» The State of Law coalition moves to form the local government in Diyala
Yesterday at 9:12 am by Rocky
» The Sudanese and his battle against corruption.. Where is the fault with the government or with the
Yesterday at 9:11 am by Rocky
» Prime Minister's Advisor: We will see the dollar fall on the black market soon
Yesterday at 9:09 am by Rocky
» The Sunni blocs are resolute. The presidency of the Council is ours, away from Al-Halbousi
Yesterday at 9:08 am by Rocky
» Al-Sudani discusses with a workers’ organization his government’s steps in this field
Yesterday at 8:58 am by Rocky
» Parliament holds its session in the presence of 170 deputies
Yesterday at 8:57 am by Rocky
» In the presence of Nechirvan Barzani and Al-Sudani... the State Administration Coalition holds an “i
Yesterday at 8:55 am by Rocky
» The UAE company ADNOC resorts to Iraqi oil. Find out the reasons
Yesterday at 8:53 am by Rocky
» The Iraqi Parliament votes to add an item to elect a president to its agenda
Yesterday at 8:52 am by Rocky
» The Federal Court responds to an inquiry by Al-Sudani regarding the powers of the provincial council
Yesterday at 8:51 am by Rocky
» Al-Sudani: It is necessary to attract women to work as a productive energy that cannot be disrupted
Yesterday at 8:47 am by Rocky
» Zebari regarding targeting the Kormor field: a systematic attack on the economy of Kurdistan
Yesterday at 8:46 am by Rocky
» Saudi Arabia tops, and this is Iraq's rank... a list of major suppliers of crude oil to South Korea
Yesterday at 8:45 am by Rocky
» With a value of 125 million dollars.. Iraq is at the forefront of countries importing Iranian textil
Yesterday at 8:44 am by Rocky
» More than a billion dollars in sales from the Iraqi Central Bank within a week
Yesterday at 8:43 am by Rocky
» Al-Sudani stresses the need for the expertise of the International Labor Organization to legislate a
Yesterday at 8:29 am by Rocky
» Including the return of 21 wanted persons.. The Iraq Money Recovery Fund counts its achievements in
Yesterday at 8:27 am by Rocky
» The path to development is the criterion between true patriotism and political clowning.
Yesterday at 8:25 am by Rocky
» The file of the Presidency of Parliament is on the state administration table... this evening
Yesterday at 8:22 am by Rocky
» Director General of the International Labor Organization: Many challenges in the world of work and t
Yesterday at 8:20 am by Rocky
» Al-Sudani: The world is witnessing crises that reflect negatively on the Arab and international peop
Yesterday at 8:11 am by Rocky
» Prime Minister: Our government has provided great support for the success of the activities, program
Yesterday at 8:08 am by Rocky
» Al-Asadi: Iraq places the social protection file among its priorities
Yesterday at 8:07 am by Rocky
» Al-Sudani: Iraq is one of the first countries in the region to join the International Labor Organiza
Yesterday at 8:05 am by Rocky