My Latest Interview with “Wall Street for Main Street” – Technology, Bitcoin and the U.S. Economy

Yesterday, I had the pleasure to record another podcast with Jason Burack of Wall Street for Main Street. This is the first interview I’ve done in a little while, and it went quite a bit longer than either of us expected. I always enjoy doing these podcasts, as it allows me to express myself in … Read more

Some Money Launderers are More Equal than Others Part 2 – CEO of BitInstant is Arrested

No man escapes when freedom fails, the best men rot in filthy jails. And those who cried, “appease appease” are hung by those they tried to please.

– Anon

Last May, I wrote an article titled: Some Money Launderers are “More Equal” than Others, which likened the U.S. government to the pigs that ruled the roost in George Orwell’s classic novel Animal Farm. In that article, I decided to compare the way the “authorities” used money laundering laws against Liberty Reserve, versus the way they tip-toed around massive money laundering for Mexican drug cartels that HSBC engaged in. Since I wrote that article, JP Morgan has been fined tens of billions of dollars for a cornucopia of criminal activities. Meanwhile, we have yet to see a single executive arrested or put behind bars. Why?

I think it is quite obvious. The United States’ “economy” has devolved into nothing more than a state-sanctioned criminal racket. A handful of oligarchs and the corporations they control, are immune from prosecution no matter what they do. They have a complete and total license to steal with impunity. Meanwhile, if a peasant is caught stealing 10 dollars or found with a dime bag of weed, it is jail for life. ‘Merica.

So now I turn your attention to the breaking news that Charlie Shrem, the impressive, young and very talented kid behind Bitcoin exchange BitInstant, has been arrested. I had a chance to meet Charlie in person last summer at the Inside Bitcoins conference in NYC (I will be once again attend their next conference April 7-8). In my wrap-up article on the conference I wrote:

The event kicked off with keynote speaker Charlie Shrem, founder and CEO of BitInstant. For those who aren’t familiar with it, BitInstant is one of the more convenient ways to acquire bitcoins for cash. Incredibly, he is a mere 23-years old and started the company while still enrolled at Brooklyn College. He shared his experience of pitching venture capital firm after venture capital firm, and his subsequent rejection by each and every one of them. He eventually convinced his mother to seed him the $10,000 needed to start the company.

Shortly after the speech, I was able to chat with Charlie in the hallway and he couldn’t have been nicer. He immediately pointed to my “Bought with Bitcoin” shirt and told me he wanted one. The shirt’s in the mail man.

In light of the above, it makes sense that the U.S. government wants him in jail. It has become quite clear that the “authorities” are intent on either putting all our greatest minds in jail, such as Barrett Brown, or driving them to suicide, as was the case with Aaron Swartz, or forcing them into exile, as is the case with whistleblower-hero Edward Snowden. Meanwhile, it is open season for oligarchs to hunt peasants. USA! USA!

From Time:

Charles Shrem, who ran a New York-based Bitcoin exchange, was arrested Monday and charged with engaging in a money laundering scheme with a user of Silk Road, the notorious deep web black market.

In the federal criminal complaint, the Southern District of New York charges Shrem, the 24-year-old CEO of BitInstant, with three counts, including one count operating an unlicensed money transmitting business, one count of money laundering conspiracy and one count willful failure to file suspicious activity report.  Robert Faiella, a Silk Road user who operated under the name “BTCKing,” was charged with one count of operating an unlicensed money transmitting business and one count money laundering conspiracy.

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Inside Bitcoins: Welcome to Satoshi Square

Yesterday was an absolutely amazing, jam-packed day at the Inside Bitcoins Conference in New York City, and I want to start out by thanking MediaBistro for putting it on and for having me as a media partner. 250-300 people attended the event, and roughly 30 of them took it to the next level and paid for their ticket in bitcoin.

BitInstant
The event kicked off with keynote speaker Charlie Shrem, founder and CEO of BitInstant. For those who aren’t familiar with it, BitInstant is one of the more convenient ways to acquire bitcoins for cash. Incredibly, he is a mere 23-years old and started the company while still enrolled at Brooklyn College. He shared his experience of pitching venture capital firm after venture capital firm, and his subsequent rejection by each and every one of them. He eventually convinced his mother to seed him the $10,000 needed to start the company.

Shortly after the speech, I was able to chat with Charlie in the hallway and he couldn’t have been nicer. He immediately pointed to my “Bought with Bitcoin” shirt and told me he wanted one. The shirt’s in the mail man.

Regulatory Panel
From there, the conference proceeded with a perfect mix of both subject specific panels and individual speakers. On the panel discussing regulatory issues, a really interesting debate emerged that I had not read about previously. It revolved around whether under the recent FinCEN guidelines on virtual currencies, bitcoin “miners” are considered money transmitters and thus require registration as such. Neither side could find agreement on the issue, which highlights just how much of a wild, wild-west type environment it still is.

BitPay
CEO Tony Gallippi of BitPay was a huge highlight for me. Not only have I recently integrated BitPay on Liberty Blitzkrieg to sell my Bitcoin shirts, but it was the company’s stunning growth earlier this year that got me obsessed with the entire topic. Back in late March, BitPay had 4,000 merchants and was adding them at a mind-boggling rate of 1,000 per month. Fortunately for them, they continued on that pace and Tony reported 8,000 merchants had signed up as of yesterday. Amazing.

Mr. Gallippi also made a particularly significant point about BitPay that I hadn’t even considered, one which represents a huge positive for any merchant using them. He noted that companies can avoid potentially burdensome accounting and reporting requirements since the merchant doesn’t legally hold any bitcoins themselves unless they want to.

However, the most powerful thing Tony covered was his discussion on some of the ways that banks are already going after merchants for accepting bitcoin by shutting down their bank accounts in retribution. Even more interesting, Tony sees the biggest future concern being that payment companies like Visa and MasterCard will threaten to pull their services from merchants that also accept bitcoin. Since merchants might get 95% of their revenue via the conduit of these payment companies, they would probably quickly kick Bitcoin to the curb. I think his foresight on this issue, as well as the fact he is already rallying people to prepare for it, makes him an even more impressive CEO and leader in the space than I thought.

Adam B. Levine – YouTube is Broken
Adam has a quick and interesting mind, one that hits you like a hurricane the moment he starts speaking. I was really excited for his talk, since he was focused on what I think is one of the biggest business problems on the web today. This has to do with the inefficiencies of website monetization. As a guy that runs podcasts, his particular area of concern was youtube. He demonstrated that by placing a QR code within videos to allow bitcoin donations, he was able to earn multiples of what he could via traditional ad networks. This really impressed me, mainly because such a small percentage of the population has ever owned a bitcoin.

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Join the Inside Bitcoins Conference July 30th in NYC!

After a tiresome, yet breathtakingly beautiful 7 hour drive from Boulder to Telluride, I finally made it to the Bluegrass Festival in time to catch Steve Martin play the banjo and close out day one with some incredible tunes.  Since I’ll be preoccupied through Sunday watching music and enjoying a few of days off, I … Read more