PILOT SPIN
Spin Zone => Spin Zone => Topic started by: PeterNSteinmetz on October 05, 2021, 09:24:50 AM
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Since at least one poster seems interested in this subject, I will comment a bit here on the Costanzo case of 2017, even though it is not aviation related. I am happy to have an opportunity to do so at some length as this would not permitted on PoA. Some background:
Starting in 2014, an IRS agent based in New York began an investigation of Thomas Costanzo because he was a well known bitcoin trader in Phoenix. Over the course of the next 2 years they began telling Costanzo that they were providing him with cash from illegal drug trades in exchange for Bitcoin and began increasing the amounts of value of the trades. In early 2016, having discovered that Costanzo was only able to trade smaller amounts, they approached me and asked me to trade bitcoin for cash which they stated had come from the heroin trade.
Since my policy has always been to never accept any cash from illegal activities in exchange for Bitcoin, I immediately told him no and they we would never execute any trades in the future as that would be the illegal act of money laundering. That appeared to be the end of it at the time; however, apparently this was not good enough for the Federal agents of the DEA who subsequently became involved.
That agent subsequently conspired with Thomas Costanzo to lie to me that the proceeds from a future trade were all legal. In an attempt to generate sufficient probable cause for seizure of my property, they conspired to arrange a complex trade in which Thomas Costanzo purchased bitcoin from me, lied to me that they were being exchanged only for legal cash proceeds, and then resold it to a Federal agent who told him they were illegal proceeds.
Based on this the Federal agents first obtained a warrant for a military style SWAT team raid on my house in which they broke down our front door and pointed automatic weapons at my wife and child (they knew I was not home at the time). They seized cryptocurrencies in this raid. About a month later they obtained a sealed indictment for conspiracy to engage in an unlicensed money transmission business and surprise arrested me on an errand.
This indictment was later dismissed without prejudice and subsequently resolved with a settlement agreement with the prosecutors in which I admitted no wrong doing and had all the cryptocurrencies seized from me returned. Costanzo has agreed in a settlement that he defrauded me and that he will be making an attempt to repay my losses stemming from his fraud.
The primary legal issue in the charges against me was whether simply buying and selling a cryptocurrency for cash which is represented as being legal proceeds requires a money transmission license under 18 USC 1960? Most people that you ask on the street think this is sort of a strange claim. How is selling someone your property, such as Bitcoin, for cash any different than selling your old laundry washer for cash? Nonetheless, the Federal prosecutors in the district of Arizona are on record in the Costanzo case as stating that they believe anyone buying or selling a cryptocurrency for cash requires a money transmission license from the Federal government.
While this issue has arisen in other cases, they also usually involve a money laundering charge where illegal proceeds are being used. There are a few cases where it is a pure 18 USC 1960 issue and these have always been resolved by agreements. So this issue has never been adjudicated by a judge or jury to date. We are trying to find a good case to defend but they are fairly rare.
This was certainly not an intentional political protest on my part. I do believe in cryptocurrencies as an important tool for freedom as an ultra-libertarian and continue to use them. The media of course loves to link these but the indictment for running an unlicensed money transmission business really has little to do with my protest against the TSA.
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What else would you buy it for?
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What else would you buy it for?
Well there are a variety of online exchanges which take bank wires and some places will take credit card charges in exchange for cryptocurrencies.
The specific legal issue was whether you can buy and sell cryptocurrencies for cash in person without being a federally licensed money transmitter. The Federal prosecutor agrees that if you are licensed, then it is legal to do so. That then requires that you keep track of the people that you received cash from above certain amounts.
In my case, I would have had to have filled out some paperwork and then kept an official record of Costanzo having been the one who was buying for cash, how much, and dates. They literally executed this SWAT team raid and charged me because I had failed to fill out some paperwork which they claim, without any actual case precedent to back it up, I should have filled out.
Of course, the underlying factor which motivates both the agents and prosecutors to pursue such dubious charges is that all they need to seize your property is probable cause for a search or arrest. Then you have to prove you are the rightful legal owner to get it back. So in many cases where the facts would allow them to at least go to trial, they seize and then make a deal. We won't take you to trial where you might face years in prison and will drop the charges if you let us keep some of your property.
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Sounds like the feds are trying to use the uncertain status of crypto (because it’s so new) to pursue more ways to get rich by civil asset forfeiture.
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The federal branch hates crypto currency for the same reason their masters in china hate it.
It gives more privacy and control to people instead of the government.
That's all there is to it.
The fucking chinese hate personal freedom almost as much as the democrats do.
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The Federal branch won't hate it if everything is outlawed except their digital currency.
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The Federal branch won't hate it if everything is outlawed except their digital currency.
This “infrastructure bill” has something in there to move us in that direction.
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Don't forget who Biden wants to be his Comptroller of the Currency.
Bongino talked about it again today.