State authorities in Florida on Thursday announced criminal charges targeting three men who allegedly ran illegal businesses moving large amounts of cash in and out of the Bitcoin virtual currency. Experts say this is likely the first case in which Bitcoin vendors have been prosecuted under state anti-money laundering laws, and that prosecutions like these could shut down one of the last remaining avenues for purchasing Bitcoins anonymously.
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Florida prosecutors charge three men who used Bitcoin in illegal operations
Arstechnica
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Published February 10, 2014
TECHi's Take
Apparently for the first time, state laws are being wielded against heavy Bitcoin traders. Florida prosecutors have charged three men, saying that their use of a site called localbitcoins.com violates laws against unlicensed money transmitters, according to a report in the Krebs on Security blog. Krebs quotes UC Berkeley researcher Nicholas Weaver as saying he’s unaware of any other case where state authorities took legal action against a Bitcoin vendor. One user, named Michelhack, claimed to have transferred more than 150 bitcoins (around $110,000 in today’s value) over the past six months. A law enforcement officer contacted Michelhack and said he wanted to use bitcoins to purchase stolen credit cards online. After one transaction, he set up a much larger deal, converting $30,000 in cash into bitcoins. Now prosecutors say Michelhack is 30-year-old Michell Abner Espinoza, of Miami Beach.
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