Florida state authorities said they had filed criminal charges against three men who they claimed conducted illegal businesses that involved large amounts of cash involving Bitcoins, Krebs on Security reported. According to experts, this is most likely the first case of Bitcoin vendors being prosecuted through the anti-money laundering laws of the state. They added that these kinds of prosecutions could close one of the last platforms where Bitcoins could be bought anonymously, the report said.
The US Secret Service's Miami Electronic Crimes Task Force collaborated with the Miami Beach Police Department and the Miami-Dade State Attorney's Office to get in touch with individuals who facilitated high-dollar deals through localbitcoins.com, a platform that links digital currency buyers and sellers in order for the transactions to be consummated in person, the report said.
A user who goes by the nickname "Michelhack" was one of those that an undercover agent contacted. Michelhack's profile showed that in the past six months, he had at least a hundred confirmed trades which involved over 150 Bitcoins, which when converted to dollars had a value of over $110,000. Court documents showed that the agent informed Michelhack that he wanted to buy stolen credit cards on the internet using Bitcoins. After their initial transaction which involved $1,000, Michelhack allegedly assented to convert $30,000 worth of cash to the digital currency, the report said.
Michelhack was identified as Michell Abner Espinoza. He was arrested after meeting undercover investigators to finish the transaction. He faces felony violations under Florida law regarding unlicensed money transmitters which does not allow "currency or payment instruments exceeding $300 but less than $20,000 in any 12-month period." He also faces charges of violating Florida's anti-money laundering states that don't allow the trade in currency of over $10,000, the report said.
Pascal Reid was also arrested for violating laws in Florida when he met with an undercover agent to complete a transaction involving the sale of $30,000 worth of Bitcoins. Last month, BitInstant CEO Charlie Schrem was also apprehended on money laundering charges, the report said.
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