CEO Of Winklevoss-Backed Bitcoin Exchange Arrested

HardOCP News

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I don't always use bitcoin, but when I do...it's to buy pot brownies.

According to the charging document, Shrem, 24, chief executive officer of the exchange BitInstant.com, changed cash into bitcoins for Faiella, 52, who ran an underground bitcoin exchange through the username BTCKing on Silk Road's website. The criminal complaint says that Shrem, in addition to knowing that Faiella's business was funneling money into Silk Road, also used Silk Road himself to buy drugs, including marijuana-infused brownies.
 

SonicTron

Snopes is My Fact Checker
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HSBC launders billions upon billions of drug money, nobody gets arrested

BitInstant CEO changes bitcoins into cash and might eat some weed brownies, gets made an example of by the government.
 

InternationalHat

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HSBC launders billions upon billions of drug money, nobody gets arrested

BitInstant CEO changes bitcoins into cash and might eat some weed brownies, gets made an example of by the government.

There is an ongoing criminal investigation which will continue for years in the HSBC case. They'd need to prove intent and wrongdoing on the part of individuals. The case will be developed for as long as needed to gather evidence and be as broad and vertical, reaching as high as it goes, as possible. Rather than just snark, you might want to read up on that a bit. The problem with this protocol is if procedure gets bungled it's easier for defense attorneys.

In this case it was obvious this man was aware that he was laundering drug money and communication proved that. There was no reason to drag on any sentencing.

I don't see any major injustice here aside from the fact that marijuana related charges are almost always absurdly overboard - but that's more general commentary and opinion than anything.
 

WBurchnall

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There is an ongoing criminal investigation which will continue for years in the HSBC case. They'd need to prove intent and wrongdoing on the part of individuals. The case will be developed for as long as needed to gather evidence and be as broad and vertical, reaching as high as it goes, as possible. Rather than just snark, you might want to read up on that a bit. The problem with this protocol is if procedure gets bungled it's easier for defense attorneys.

In this case it was obvious this man was aware that he was laundering drug money and communication proved that. There was no reason to drag on any sentencing.

I don't see any major injustice here aside from the fact that marijuana related charges are almost always absurdly overboard - but that's more general commentary and opinion than anything.

Are you sure about that on-going criminal investigation? I heard they were already fined and I thought the fine they were given would have been the punishment/end of the case? If so, they were fined the equivalent of about 3 days worth of profit if I recall correctly. The Daily Show, CNN, MSNBC and the Colbert Report all reported a figure around that mark setting HSBC back only "1%" of its estimated profit for a year. Aka -- nothing. You're suggesting additional action will be done for the 'same' crime? Isn't that illegal under the whole double-jeopardy aspect of the legal system? Or will this further action be against specific individuals and not the whole corporation.
 

WBurchnall

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God the Winklevoss twins are complete douchebags...

I'd largely agree with this in regards to their constant re-suing of Facebook trying to get more money for an 'idea' they may or may not have had to which they have little to no part of today's "success".

I don't quite see how this story would reinforce that belief. I'd say something akin to proving they lack leadership skills and therefore might be less deserving of their FaceBook suits/settlements. Consider, they basically hired a real hack as a CEO or made a poor CEO decision. If they were running FaceBook and appointed a CEO, would FaceBook have crashed and dived similar to BitInstant's fate with their CEO appointment? I'd be curious to know how much this CEO was being paid.

I can't help but think... if you are making say $3 million a year, can't you find a way to somewhat safely buy 'pot brownies' offline rather than online via an [apparently] easily trackable method and having illegal goods [shipped directly to your door(presumably) or a P.O. Box in your name]
 

Geef

Limp Gawd
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He could have just taken a quick weekend vacation to Colorado or Washington State and eaten all the brownies he could get his hands on and everything would be cool right now... Oh Well. ;)
 

InternationalHat

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Are you sure about that on-going criminal investigation? I heard they were already fined and I thought the fine they were given would have been the punishment/end of the case? If so, they were fined the equivalent of about 3 days worth of profit if I recall correctly. The Daily Show, CNN, MSNBC and the Colbert Report all reported a figure around that mark setting HSBC back only "1%" of its estimated profit for a year. Aka -- nothing. You're suggesting additional action will be done for the 'same' crime? Isn't that illegal under the whole double-jeopardy aspect of the legal system? Or will this further action be against specific individuals and not the whole corporation.

$2 billion they gave back.

And I just looked it up. I mistakenly remembered incorrectly about the criminal investigation's implications. It's ongoing, but no one will actually got to jail over it unfortunately. They just forced them to clean house and dramatically reduce executive pay which isn't much of a deterrent to individuals aside from "don't get caught." I was under the impression from friends that individuals would be investigated further but that does not appear to be the case.

That's unfortunate. Thanks for the catch.
 

nvgrim

[H]ard|Gawd
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The guy sold someone bitcoin,who then that person sold the bitcoin to someone who bought something on silk road. I dont see him getting into too much trouble when everything is over.
 

geok1ng

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Really, i do not understand what these people smoke to jump to that conclusions.:p

Obviously Bitcoins were not designed to help tax evaders and money laundry.:rolleyes:
 

spincut

[H]ard|Gawd
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On the one hand, upon watching the Social Network, I really did feel like Zuckerberg did kind of leave them high and dry and stole their idea.

At the same time, and of course the movie may have taken it's own particular slant in portraying them the specific way they did, they were total douche canoes (that term takes on a particular relevancy in this case given that they rowed crew..). Not surprised they are party to some shady business.

Then again, buying pot brownies with e-currency doesn't sound too terrible :p .
 
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