It's funny govts. always say it is about money laundering, but it's really about taxes..

Are you asking the OP? If so, the link to the article is there, 1st post..

I'm not talking about links, I'm talking about the title of this topic itself being a hysterical one rather than the title being the same as what is written on the article, that's what you normally do when you want to discuss a news article here

P2P on that car deal, no problem; if dealer is involved simply must report.


this is the guide:
http://www.fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html


this is from the horse's mouth:

REMARKS OF JENNIFER SHASKY CALVERY
DIRECTOR
FINANCIAL CRIMES ENFORCEMENT NETWORK
 
THE VIRTUAL ECONOMY: POTENTIAL, PERPLEXITIES AND PROMISES
UNITED STATES INSTITUTE OF PEACE
 
WASHINGTON, DC
JUNE 13, 2013
 
Good afternoon. It is a pleasure to be joining you at this event to discuss the potential,
perplexities, and promises of the virtual economy. I would like to thank our co-hosts, Thomson
Reuters, as well as the International Centre for Missing & Exploited Children, for inviting me to
join you today. I would also like to thank the U.S. Institute of Peace for providing us with such a
beautiful venue for our discussions.
 
First, a few headlines from the past several weeks, which not only sum up the very theme
of today’s discussions, but also illustrate how different our perspectives can be:
 
“Is the Government Trying to Kill Digital Currency?”
 
“Feds shut down payment network Liberty Reserve. Is Bitcoin next?”
 
“FinCEN’s New Regulations Are Choking Bitcoin Entrepreneurs.”
 
Or, on the other hand:
 
“A little regulation may boost Bitcoin’s Main Street cred.”
 
“New Money Laundering Guidelines Are a Positive Sign for Bitcoin.”
 
“Feds don’t plan to take down Bitcoin or other currencies.”
 
But, my personal favorite has to be, “FinCEN boss lays out Bitcoin rules.” If only it was
that easy.
 
One thing is clear – depending on what you read, FinCEN’s virtual currency guidance
has been the worst thing, or the best thing, to ever happen to virtual currency, and Bitcoin in
particular.
  
2
 
Taking a step back, for those of you who might not be as familiar with the work of
FinCEN, let me take a moment to give you a quick overview.
 
FinCEN is a bureau of the Treasury Department, and reports to the Office of Terrorism
and Financial Intelligence. With approximately 340 employees, we are relatively small
considering our broad responsibilities. Our mission is to safeguard the financial system from
illicit use and combat money laundering and promote national security through the collection,
analysis, and dissemination of financial intelligence and strategic use of financial authorities.
 
A key aspect of FinCEN’s mission is to administer and issue regulations pursuant to the
Bank Secrecy Act (BSA). The BSA requires a broad range of U.S. financial institutions --
including banks, money services businesses, casinos, insurance companies, securities and futures
brokers, and some trades or business, like car dealerships -- to assist U.S. government agencies
in the detection and prevention of money laundering. Financial institutions do this by instituting
effective anti-money laundering (AML) programs, and maintaining records and filing reports
with FinCEN. FinCEN, along with its law enforcement partners, uses the data contained in these
reports to detect and deter money laundering, terrorist financing, and other financial crime.
 
Now, back to those headlines I mentioned at the outset. It is in FinCEN’s regulatory area
that our interests first intersected.
 
This March, FinCEN issued interpretive guidance to bring clarity and regulatory certainty
for businesses and individuals engaged in money transmitting services and offering virtual
currencies.
 
Some in the press speculated that our guidance was an attempt to clamp down on virtual
currency providers. I will not deny that there are some troublesome providers out there. But, that
is balanced by a recognition of the innovation these virtual currencies provide, and the financial
inclusion that they might offer society. A whole host of emerging technologies in the financial
sector have proven their capacity to empower customers, encourage the development of
innovative financial products, and expand access to financial services. And we want these
advances to continue.
 
However, equally important is the need to ensure integrity and transparency. Because the
fact is, being a financial institution comes with certain responsibilities. And our recent guidance
is an important step to get us there.
 
FinCEN’s guidance explains that administrators or exchangers of virtual currencies have
registration requirements and a broad range of AML program, recordkeeping, and reporting
responsibilities. Those offering virtual currencies must comply with these regulatory
requirements, and if they do so, they have nothing to fear from Treasury.
 
The guidance explains how FinCEN’s “money transmitter” definition applies to certain
exchangers and system administrators of virtual currencies depending on the facts and
circumstances of that activity. Those who use virtual currencies exclusively for common
personal transactions like buying goods or services online are not affected by this guidance.
  
3
 
Those who are intermediaries in the transfer of virtual currencies from one person to
another person, or to another location, are money transmitters that must register with FinCEN as
MSBs, unless an exception applies. Some virtual currency exchangers have already registered
with FinCEN as MSBs, though they have not necessarily identified themselves as money
transmitters. The guidance clarifies definitions and expectations to ensure that businesses
engaged in similar activities are aware of their regulatory responsibilities and that all who need
to, register appropriately.
 
It is in the best interest of virtual currency providers to comply with these regulations for
a number of reasons. First is the idea of corporate responsibility. Legitimate financial
institutions, including virtual currency providers, do not go into business with the aim of
laundering money on behalf of criminals, such as those who would exploit children. Virtual
currencies are a financial service, and virtual currency administrators and exchangers are
financial institutions. Any financial institution and any financial service could be exploited for
money laundering purposes. What is important is for institutions to put controls in place to deal
with those money laundering threats, and to meet their AML reporting obligations.
 
At the same time, being a good corporate citizen and complying with regulatory
responsibilities is good for a company’s bottom line. Every financial institution needs to be
concerned about its reputation and to go out of its way to show it is operating with transparency
and integrity within the bounds of the law. Customers are going to be drawn to a virtual
currency administrator or exchanger where they know their money is safe and where they know
the company has a reputation for integrity. And banks will want to service administrators or
exchangers that show great integrity, innovation, and transparency.
 
But those institutions that choose to act outside of their AML obligations and outside of
the law are going to be held accountable. FinCEN will act to stop abuses of the U.S. financial
system.
 
Just a few weeks ago FinCEN named Liberty Reserve as a financial institution of primary
money laundering concern under Section 311. Liberty Reserve operated as an online money
transmitter deliberately designed to avoid regulatory scrutiny and tailored its services to illicit
actors looking to launder their ill-gotten gains. According to the allegations contained in a
related criminal action brought by the U.S. Department of Justice, those illicit actors included
criminal organizations engaged in credit card fraud, identity theft, investment fraud, computer
hacking, narcotics trafficking, and most relevant for today’s purposes, child pornography.
 
 The 311 action taken by FinCEN was designed to protect the financial system from the
risk posed by Liberty Reserve – an online, virtual currency, money transfer system that was
conceived and operated specifically to allow – and encourage – illicit use because of the
anonymity it offers.
 
Let me go back to the guidance I discussed earlier. FinCEN has been out front in issuing
our guidance to make it clear that we see virtual currency administrators and exchangers as a
type of money services business. These businesses are as much a part of the financial framework
as any other type of financial institution. As such, they have the same obligations as other
financial institutions, and the same obligations as any other money services business out there.
  
4
 
But keep in mind: this action was taken against one financial institution and one type of
financial service. That’s what a criminal case is, and that’s what a regulatory action is – an
action against a particular violator. With this action we were not painting with a broad brush
against an entire industry. I do not think that is fair to any industry in any situation, let alone this
one.
 
I do want to address the issue of virtual currency administrators and exchangers
maintaining access to the banking system in light of the recent action against Liberty Reserve.
Again, keep in mind the combined actions by the Department of Justice and FinCEN took down
a $6 billion money laundering operation, the biggest in U.S. history.
 
We can understand the concerns that these actions may create a broad-brush, reaction
from banks. Banks need to assess their risk tolerance and the risks any particular client might
pose. That’s their obligation and that’s what we expect them to do.
 
And this goes back to my earlier points about corporate responsibility and why it is in the
best interest of virtual currency administrators and exchangers to comply with their regulatory
responsibilities. Banks are more likely to associate themselves with registered, compliant,
transparent businesses. And our guidance should help virtual currency administrators and
providers become compliant, well-established businesses that banks will regard as desirable and
profitable customers.
 
Every financial institution, whether a brick and mortar bank or a virtual currency
administrator or exchanger, should be concerned about its reputation. Integrity goes a long way.
I recently heard a banker say that there is a reason that financial institutions have to obtain
licenses. It is a great bestowal of trust that enables banks to be part of the U.S. financial system,
to be part of the global financial system. And that trust -- that privilege -- comes with
obligations. One of those obligations is a responsibility to put effective AML controls in place
so that the type of criminal actors that showed up in the Liberty Reserve case are not able to
operate with impunity in the U.S. financial system.
 
In closing, I just want to circle back to the themes of today’s event. Much of what I
discussed today focuses on how we are approaching the “perplexities” of virtual currencies, and
those are discussions we need to continue to have going forward. But the “potential” and
“promise” these advances offer our economy are equally important. The innovations we are
seeing within the financial services industry are a benefit to commerce on many levels. From
providing services to the unbanked, to the development of new financial products, the virtual
economy holds great promise. However, I would like to close with a challenge to our great
innovators: extend your focus to devising creative solutions for preventing the abuse of virtual
currencies by criminals, such as those who would exploit children. We all stand to benefit from
such innovation, and the related transparency and integrity to our financial system.
 
 
###


additional reference:


Money Services Business - The term "money services business" includes any person doing business, whether or not on a regular basis or as an organized business concern, in one or more of the following capacities:

(1) Currency dealer or exchanger.
(2) Check casher.
(3) Issuer of traveler's checks, money orders or stored value.
(4) Seller or redeemer of traveler's checks, money orders or stored value.
(5) Money transmitter.
(6) U.S. Postal Service.

An activity threshold of greater than $1,000 per person per day in one or more transactions applies to the definitions of: currency dealer or exchanger; check casher; issuer of traveler's checks, money orders or stored value; and seller or redeemer of travelers' checks, money orders or stored value. The threshold applies separately to each activity -- if the threshold is not met for the specific activity, the person engaged in that activity is not an MSB on the basis of that activity.

No activity threshold applies to the definition of money transmitter. Thus, a person who engages as a business in the transfer of funds is an MSB as a money transmitter, regardless of the amount of money transmission activity.

Notwithstanding the previous discussion, the term "money services business" does not include:

A bank, as that term is defined in 31 CFR 1010.100(d) (formerly 31 CFR 103.11(c)), or
A person registered with, and regulated or examined by, the Securities and Exchange Commission or the Commodity Futures Trading Commission.
For the complete regulatory definition of "money services business", see 31 CFR 1010.100(ff) (formerly 31 CFR 103.11(uu)).

Note: Each money services business (MSB) is a financial institution. For the regulatory definition of "financial institution," see 31 CFR 1010.100(t) (formerly 31 CFR 103.11(n)).


This is the official site
http://www.fincen.gov/

I guess you haven't read what I wrote a few post before, about the article being misunderstood regarding the story of the stolen cards: he's probably prosecuted not because he said "I'll think about it" re the proposed illicit activity.. that part is written in the document only to prove that he KNEW what the undercover agent was dealing with and which was the purpose of the bitcoins he wanted to buy.

They are probably charging him with ML for promoting the carrying on of specified unlawful activity by conducting (or attempting to conduct) a financial transaction involving property represented to be the proceeds of specified unlawful activity, or property used to conduct or facilitate specified unlawful activity, where the term “represented” means any representation made by a law enforcement officer or by another person at the direction of, or with the approval of, a Federal official authorized to investigate or prosecute violations of this section.

yah Ponzi totally hilarious

While I agree; it's going to be up to the interpretation of the jury to determine his guilt...

The Police don't care if he had any intent. They do nothing but write the summons...

I think he'll get off in court because he owned the Bitcoins and wasn't selling them for somebody else. If he even suggests that he was afraid upon learning that the undercover was potentially an armed criminal and that he had no intentions to ever do business with this person again.

The cops could do this with a used car sale... It's going to be up to the court to determine his guilt...

I'm on record (see wayyy above) for saying that I believe the the effort wasn't worth the charges.   Meaning, I think the only thing these guys are guilty of is not having a MSB license, and being to ambitious in trying to serve their customers.   I further speculated that such a grand effort presumable starting out from a localbitcoin ad is unreasonable. 
My speculation is that those arrested probably screwed too many customers which resulted in the sting and subsequent arrests. 

A plea deal might include them not doing any more MSB for 1 year+.  They can't afford bail, or a private esq, so I'm confident this isn't going to trial, it will plea out and be over with.    If this goes to trial, the court will likely be pissed at the DA even if a conviction is gotten for the no license.   If the ADA moves forward with the ML charge, they must have a whole lot more evidence that what we are prevy to.

Chasing people with made up cases by investigators is a disputed but sometimes used method.
But even if it is accepted as chasing method for criminals then should be used consequently.
When chasing mass murders which are killing with strangulation their victims why investigators don't go to vendors and say 'I want to buy 10 m of rope to strangulate some people' ?
Or asking for a bottle of whiskey and saying to the vendor that he needs to drink during driving the car.
Then put the vendors in jail if they sell them.
Even if the law would be applicable for selling bitcoins it was used very selectively.