Bitcoin is in a position right now, where it can get you into a lot of trouble; but apparently out of trouble too! We are not talking about the financial aspect of Bitcoin, but more about how virtual currency knowledge can be wielded to reduce jail time. This scenario played out quite well for Pascal Reid, a person recently convicted for money laundering while selling Bitcoin.
The Trials and Tribulations of Bitcoin Users in the US
While it is technically not illegal for individual Bitcoin users to buy and sell virtual currency to other people in a peer-to-peer fashion, you just never know who you will be dealing with. A few people have been assaulted when dealing with another person for a Bitcoin trade and meeting up to exchange funds.
Especially when you are an individual involved in a less than kosher scenario to begin with, it might be a good idea not to try and launder money through Bitcoin. Pascal Reid and Michel Abner Espinoza were arrested in February of 2014, after selling Bitcoins in person to an undercover federal agent.
The arrest came to be after two government agents bought US$1,500 worth of Bitcoin from both Reid and Espinoza in turn, after finding their listings on the LocalBitcoins platform. The undercover agents told the sellers they were looking to buy some Bitcoins so that they could purchase stolen credit cards.
After spending five weeks behind bars while waiting for his trial, Pascal Reid was sentenced to 90 days in jail, minus the time spent in custody already. The reason he managed to get a very light conviction, despite being involved in a money-laundering scheme, is due to the fact he agreed to train government officials on Bitcoin and virtual currencies.
As a result of pleading guilty to the lesser charge of operating an unregulated and unlicensed money-transmitting business – and agreeing to the training scenario – the second charge of money laundering was completely dropped. Knowledge truly is power and Pascal Reid will be using his knowledge to the fullest extent.
To be more precise, there will be a total of training seminars on Bitcoin being organized by Pascal Reid. These events are scheduled to take place during his probation period of five years and will focus on educating federal agents and financial professionals alike. It is particularly worrying how greed got the best of Pascal Reid though, as he was clearly told what the virtual currency funds would be used for. Had he said no to the deal, none of this would have happened in the first place.
“I regret not recognizing that my actions, without keeping records and complying with reporting and licensing laws, could benefit criminals. I hope that my experience and knowledge of the bitcoin world and practices can now help law enforcement uncover and prevent criminal activity.” – Pascal Reid stated in an interview.
A Clear Call for More Bitcoin Educational Efforts
If there is one thing everyone in the Bitcoin community can take away from this story, it is pretty clear that more educational efforts are needed. Most people have no clue on what Bitcoin and other virtual currencies bring to the table and it looks like government agencies are grasping at straws to expand their knowledge.
While it is positive to see someone using their Bitcoin expertise in a positive manner, the way Pascal Reid got to being in this position leaves much to be desired. Regardless of how you obtain Bitcoin yourself, always be wary when dealing with buyers in person. They might be able to implicate you in their crimes, just because you happened to be in the wrong place at the wrong time.
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