Bitcoin foundation sues for common sense in Florida laundry sting trial

Back in February, Florida police officers posed as money launderers hoping to wash cash by buying bitcoin (BTC) from two men they found on FCA - Bitcoinan on-line bitcoin marketplace. Officers arrested the man and one other after they agreed to convert $30,000 in laundered money into bitcoin, according to reports. The men face charges of unauthorised money transmission.

The Bitcoin Foundation has stepped in with an amicus curiae which intends to protect the wider community of users in Florida from being closed down by ‘laws that put undue restrictions on their ability to transact with the digital currency.’ In short, if the defendants are tried for not being authorised money transmitters, the consequences for bitcoin use in the state could be significant, forcing all users to register as money transmitters.

The Bitcoin Foundation’s legal advocacy committee chair clarified the stance: “The foundation’s position at its core is this: state prosecutors are improperly applying Florida statutes regulating ‘money service businesses’ to individuals conducting peer-to-peer sales of bitcoins.”

Sting in the tail

FCA- stingThe foundation is clearly pushing to protect genuine BTC users and the use of the world’s fastest growing crypto-currency  from regulators who have not yet figured out how to manage the currency and are looking at sledgehammer tactics to close it down before it gets out of their reach. Some would argue that it already is out of their reach, it was designed that way. The only place regulators have in a BTC transaction is when it is exchanged for fiat currency.

But here is something equally important worth noting. Although the men were willing to trade BTC for funds they thought were the proceeds of fraud, and greed usually trips up the unscrupulous (see Ponzi and Advanced Fee Fraud), the cash offered never existed in the first place. It was invented for the purposes of a sting operation, a trap set by Florida State Police. I question the legitimacy of sting operations which are use widely in the US to entrap people who may never have committed a crime in the first place.

 

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