A Bitcoin Trader in Detroit Sent To Prison. This is something that could become more and more common as digital currencies such as bitcoin enter into the mainstream.
It was in Detroit that a trader of bitcoin received a sentence of 366 days of jail time a result of operating a money services business that was not licensed. This sentence was handed down to him on Monday and he goes by the name of Sal Mansy.
It was back in June of 2015 that he was initially arrested as a result of his efforts to have bitcoin transactions funnelled through a corporation that he owned that is called TV TOYZ. The sum total of these transactions amounted to $2.4 million in the space of two years as reported by the US Attorney’s office that is located in Maine.
It was in May that Mansy made the decision to plead guilty to these charges of buying these bitcoins on the Bitstamp and Coinbase exchanges and subsequently selling them at a profitable price via LocalBitcoins.
As federal law states, a money-service business is not allowed to transfer or exchange bitcoin when they are not registered to do so. It was not a case of not knowing about this law, Mansy knew what he was doing was illegal, but he proceeded to go ahead with it anyway. It was required that he held a FinCEN registration.
After he carries out his jail sentence, Mansy will then have to undergo a further three years of supervised release. He also has to give up $118,000 worth of cash and bitcoin that he obtained by running this illegal scheme. This amount of money was confiscated at the time of his arrest in May with the relevant investigators.
The manner in which Mansy was eventually caught was as a result of an undercover investigation. The investigators made a couple of trades that amounted to 6.32 BTC with Mansy. At that time, they were worth approximately $1,900 ($75,000 at today’s prices).
While this is not the first arrest that has been seen when it comes to illegal activities related to bitcoin, with more of an emphasis being placed on the world of digital currency by the authorities, the amount of these arrests looks set to only rise in the near future.
It was in October that a resident of Michigan named as Bradley Stetkiw faced charges of operating a money transmitting business that was unlicensed after he had sold over $150,000 worth of bitcoin.
He had also utilised the LocalBitcoins site in order to make these transactions, with federal investigators buying $56,000 in bitcoin from the offender at this time.
Another user of the LocalBitcoins network was a resident of Missouri called Jason Klein. Klein was arrested and pleaded guilty to also operating a money transmission business that was unlicensed back in May following his sale of 98 bitcoins (worth over $1 million in today’s prices) to agents who were undercover in 2015 and 2016.
It is clear that people are operating in the shadow economy when it comes to bitcoin, thinking they will not be caught. How wrong they are.