Wouldn't anything over 10k USD give Bitpay pause given the regulatory climate as well as the nature of the company involed. Bitpay was well aware of problems and concerns customers had with fraud from BFL considering they shared a booth at conferences.

That's right! You or I go and try purchasing an automobile priced over $9,999.99 USD and see what forms are filled out prior to us being allowed to drive it off the lot.

I'm pretty sure that papers would have had to be filed for each amount over $10K transferred to BFL's bank especially since KYC is in place.

But, again, what BFL did was worse, for they put BitPay in jeopardy by pretending to submit payment for products, when in really BFL was using BitPay as their private exchange.

Now, the three-letter authorities will be getting out their microscopes to look further into BFL's affairs, along with the affairs of BitPay, CoinWare, Netsolus, NimbusMining, LiquidBits, HashTrade, Jeff Ownby, Greg (Gregory) Bachrach, Josh Zerlan (because of his fully paid for half-million-dollar home via BTC), Quentin Page, Remy and Jean-Mark Jacobson, James Gibson, and a few more. All because Sonny Vleisides was "on a new track now" with his past behind him. I say he tried to repeat his past several fold... But failed big time, this time bringing down more folks with this resent fall.

#ASKFTC

I stand corrected: https://bt.irlbtc.com/view/841416

#ASKFTC

PS: Feel free to open this honest nest a little wider with you wonderful insight.

Obviously not enough if you can't convert readers to your narrative.

Money Laundering a Hypothetical Guide Part 1: The Basics

Step 1.  “Placement” (also known as) Deposit your cash in a bank.

Fact: BFL sends 1 million to itself disguised as purchase from HashTrade. Converts the BTC through BitPay to their own accounts as USD.

Next to how you made your money, this is the riskiest phase of the laundering process. To prevent banks from reporting you to the government, keep cash deposits to well below $10,000 and spread it out over 160 accounts in 20 or more banks.

Conclusion: BFL failed at this step miserably.


Step 2. “Layering” (also known as) Move your money around like crazy.

Fact: BFL was layering see expense accounts of BFL executives. Respin boards, buying houses, cars etc as well as over paying for engineering of miners to their 'partners' in the scam. Exchange currencies, buy luxury goods, spends on rents for buildings, spas and burn in rooms or off site server locations.

This is the trickiest and possibly most fun stage of the laundering process. Try changing currencies with 20%. Buying expensive items like houses, cars, and art work with 30%. Investing in legitimate businesses with the final 50%. The point is to make the original dirty money impossible to trace.

Conclusion: Whoops failure too slow and not diversified enough to hide it. FTC has evidence after seizures of laptops etc.


Step 3.  Integration. Your 1 million dollars should look like it came back to you as legit legal transaction.

Fact: Whoops Gleb found out it wasn't pretty easily. Now it is clear HashTrade and BFL are laundering the BTC.

Follow up questions:

Was BitPay involved directly with this scheme and did they have full knowledge?
Did BFL do this BEFORE they hired the accountant?
I wonder what the accountant they hired had to say about it?

Using BTC... you could cut out a lot of the need to bribe fees etc.

I think BFL was hoping no one would track this Gleb. But sticking 1 million in like that was the DUMBEST move possible. Red Flags everywhere. I think they got scared and started looking for ways to get the money hidden.

Look at what was going on with BFL at the time.

1. Lawsuits started coming.
2. DA was looking at them.
3. Houses were being bought.
4. No accountant to help them keep things "hidden" or at least be less conspicuous. Look at the accountant talking on Skype particularly about keep the amounts down.
5. Personal loans from BFL.
6. Personal spending on company credit cards.
7. Extensive overseas trips by BFL even though there no real sales being generated after the 65nm debacle.
8. Expense accounts in BTC for major members of the team.
9. Extensive adverting campaigns.
10. Extensive booth purchases for conferences where they were paying a high premium to be the only mining company at a show.

i have never done this, but i do know of other miners that do this on a regular basis. So, im not shocked at all that this has happened.

I need to see proof of that, bud.

Bitpay is a payment processor. Someone PAID BFL and bitpay PROCESSED the payment, in which BFL received cash (which was supposed to be used to make products, but thats not bitpays business).

Nothing to see here folks.