Loading...
One of the first successful implementations of a distributed crypto-currency, Bitcoin was designed around the idea of using cryptography to control the creation and transfer of money, rather than relying on central authorities. The Bitcoin is called a cryptocurrency because it uses public-key cryptography. This means that when paying with Bitcoin, there will be no exchange of digital notes or tokens between the buyer and the seller. Instead, the buyer requests an update to a public transaction log, called the blockchain. This master list of all transactions shows who owns what bitcoins currently and also in the past, and is maintained by a decentralized network that verifies and time stamps the payments. Bitcoins aren’t controlled by any country or banking authority.
The Bitcoin has been a subject of scrutiny due to ties with illicit activity. Partially because Bitcoins exist as software they are sent easily through the Internet, without needing to trust any third party. During 2013 the FBI shut down the billion-dollar Silk Road online black market and confiscated US$28.5 million worth of Bitcoin. And The People’s Bank of China announced on 5 December 2013, that it was prohibiting Chinese financial institutions from using Bitcoins.
Pascal Reid, 29, and Michel Abner Espinoza, 30, were arrested last week in South Florida. Both men who were arrested on February 6 and are being held in Miami-Dade County jails, face two counts of money laundering and one count of engaging in an unlicensed money servicing business, according to Bloomberg News.
The local prosecutor reported that it may be the first state law charges over the use of Bitcoin virtual currency as part of an alleged money laundering scheme. In New York, Federal prosecutors have filed a series of charges tied to Bitcoin since October.
According to court records, both defendants Reid and Espinoza have been appointed defense counsel, and are awaiting bond hearings.
Get JD Journal in Your Mail
Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!
Miami-Dade State Attorney Katherine Fernandez Rundle reported in a statement that, “The use of Bitcoins in the transactions is a new technological flourish to this very old crime.â€
Charlie Shrem is the former vice chairman of the Bitcoin Foundation, an industry representative to regulators formed to oversee the currency’s software protocol. He was also chief executive officer of BitInstant, a Bitcoin exchange company. Charlie Shrem was charged with conspiring to launder more than $1 million in the currency in a case linked to Ross William Ulbricht’s, Silk Road.
Although it has gained some traction with merchants selling legitimate products Bitcoin also has been used to facilitate illegal transactions.
Image Credit: www.googleimages.com
