It would appear that Bitcoin‘s legal troubles are far from over. After the former CEO of BitInstant was indicted recently, Floria police has arrested another three Bitcoin traders over allegations of money laundering.
The main culprit which the Miami Beach Police Department was hunting down goes by the online nick Michelhack at localbitcoins.com. Michelhack has a number of successful Bitcoin trades on his localbitcoins profile and has exchanged more than 150 Bitcoins in the last six months.
However, he has simply been purchasing and selling Bitcoin, from the looks of it. Miami Police Department thought the high-volume Bitcoin transactions were suspicious. So they assigned an undercover cop to set up a meeting with Michelhack and ask him to provide Bitcoin in exchange for cash.
The first transaction between Michealhack, who’s original name turned out to be Michell Abner Espinoza, and the cop, was worth $1000. But since the police needs a transaction of more than $10,000 to indict a person of money laundering, the undercover cop next set up a meeting with Espinoza and asked him to convert $30,000 into Bitcoin. When Espinoza came to finalize the deal, he was apprehended by the police and booked for Florida’s law against unlicensed money transmitters as well as Florida’s anti-money laundering statutes.
Later, his home was raided and his computer systems and other related equipment was seized by the authorities. Police also arrested another man, Pascal Reid, through a similar tactic of setting up a deal with him through an undercover agent and keeping the amount of that deal above the minimum sum needed to involve money-laundering charges.
While these instances show that Bitcoin traders and exchanges are being increasingly targeted by the authorities, it also hints that the federal government and the state authorities are not exactly happy with the possibility of anonymity in Bitcoin transactions. And they are going to push for legal intervention and action against Bitcoin traders, users and exchanges until the crypto-currency is effectively under the regulations, control and monitoring of the authorities.
Courtesy: Krebs On Security