A Michigan man has been charged with running an unlicensed money transmitting business after selling nearly $150,000 in bitcoin online.
According to an indictment released by Detroit TV news services WD-IV Friday, 52-year-old Bradley Anthony Stetkiw ran an exchange through the LocalBitcoins website, conducting transactions at restaurants in the Bloomfield area. Stetkiw is alleged to have sold bitcoin as part of a business venture for approximately two years, at a volume that would make him subject to federal anti-money laundering regulations.
Of the total, the documents, filed with the U.S. District Court for the Eastern District of Michigan, assert Stetkiw sold more than $56,000 worth of bitcoin to federal agents through six meetings.
According to the indictment:
"Operating under the user name 'SaltandPepper,' Stetkiw bought, sold and brokered deals for hundreds of thousands of dollars in bitcoins while failing to comply with the money transmitting business registration requirements set fort in Title 31, United States Code, Section 5330."
The authorities are going after individuals who are operating unlicensed cryptocurrency exchanges. Stetkiw is notably not the first LocalBitcoins user to be charged for trading bitcoin.
Earlier this year, Detroit resident Sal Mansy plead guilty to the charge of operating an unlicensed money services business. He allegedly conducted $2.4 million-worth of transactions over a two-year period ending in July 2015.
Other arrests in Missouri and New York suggest actions against independent U.S. bitcoin sellers are becoming more commonplace.
Last year, a Louisiana chiropractor and his son pleaded guilty to operating an unlicensed money servicing business in which they sold over $3.5 million USD in Bitcoin for fiat currency. Recently, a Florida programmer got sentenced to 16 months in jail for his part in a Bitcoin laundering scheme.
The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) did issue a document in 2013 that stated that users of cryptocurrencies were not money servicing businesses, but those who engage in exchanging those currencies were. The agency said:
"A user is a person that obtains virtual currency to purchase goods or services. An exchanger is a person engaged as a business in the exchange of virtual currency for real currency, funds, or other virtual currency."
So when in doubt, make sure you know the legalities that pertain to what you’re doing. Exchanging Bitcoin and other cryptocurrencies in person could land you in legal hot water.
Sources:
https://www.coindesk.com/michigan-man-charged-unlawful-bitcoin-exchange/
https://bitcoinist.com/michigan-man-busted-unlicensed-bitcoin-exchange-faces-jail-time/
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