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Bitcoin witch hunts vs Bankster adoration

Mark Jeftovic
By Mark Jeftovic / January 28, 2014

btc_burned_at_the_stakeIt sends a chill down your spine when you hear the news that somebody you had just met at a conference a few months ago, a like minded individual representing a global movement you are  in complete alignment with, was just arrested on federal money laundering charges,

The crime? Charlie Shrem, CEO of Bitinstant and Vice Chairman of the Bitcoin Foundation allegedly sold bitcoins to Silk Road users and then they used them to buy illicit drugs.

Follow that? The implication here is that you are now responsible for the second order actions of your own customers.

Could there be a double standard here?

This is in a slightly different realm than fat blobs suing MacDonalds, smokers suing tobacco companies, or even victims of gun violence suing gunmakers – all are civil actions and there at least being a (tenuous) first order line between “because of A, then B”

But criminally charging the CEO of a currency exchange service because of what some people did with said currency after they exchange it is a whole new level.

Am I now responsible for what my employees do with the money I pay them?

Do banks face culpability when customers withdraw cash and then use it buy drugs?

Perhaps this is how HSBC could rationalize their new policy of demanding proof of what you will do with your cash before they will let you withdraw it (while that policy was hastily reversed after the ensuing backlash, Zerohedge reports that a large-ish Russian bank just halted all cash withdrawals this morning.).

In fact HSBC ( them again ) was specifically and explicitly not charged with money laundering after being caught red handed doing  the actual deed.

Let’s compare. So what did BitInstant do?

They allegedly sold 1 million dollars worth of Bitcoin to Silk Road users who then may have used them to purchase illicit drugs. CEO Charlie Shrem is also accused of buying drugs for personal use (namely, marijuana, which is becoming rapidly decriminalized anyway).

And HSBC?

According to Matt Taibbi’s expose:

For at least half a decade, the storied British colonial banking power helped to wash hundreds of millions of dollars for drug mobs, including Mexico’s Sinaloa drug cartel, suspected in tens of thousands of murders just in the past 10 years – people so totally evil, jokes former New York Attorney General Eliot Spitzer, that “they make the guys on Wall Street look good.” The bank also moved money for organizations linked to Al Qaeda and Hezbollah, and for Russian gangsters; helped countries like Iran, the Sudan and North Korea evade sanctions; and, in between helping murderers and terrorists and rogue states, aided countless common tax cheats in hiding their cash.

(emphasis added)

And what happened to HSBC?

The deal was announced quietly, just before the holidays, almost like the government was hoping people were too busy hanging stockings by the fireplace to notice. Flooring politicians, lawyers and investigators all over the world, the U.S. Justice Department granted a total walk to executives of the British-based bank HSBC for the largest drug-and-terrorism money-laundering case ever.

Once again there are two sets of rules

There is one set of rules for the banking elite – who get bailed out when they blow themselves up, who get to privatize profits and externalize losses and who get a free pass when caught actually breaking laws.

Then there is he rest of us, we’re the rabble, the little people, the nobodies.

We don’t get charged for, you know, actual crimes. We face charges for the mere fact of being involved with a movement or innovation that challenges the hegemony of the elite.

This is part of a bitcoin witch hunt pure and simple – get used to it.

If you live in the United States and you want to be involved in the crypto currency business, you should follow Dollar Vigilante Jeff Berwick’s who opined on facebook:

I said in my speech yesterday and to many people that you are crazy if you operate a bitcoin company in the US and told people to get out. Some people thought I was crazy for saying that. Then this happened the next day.

The moral of the story, if you’re going to be aligned against the leviathan of entrenched interests and fading empire, you should think long and hard (and quickly!) about getting out of the belly of the Beast.

Further Reading

About the author

Mark Jeftovic

Mark Jeftovic is the creator of Wealth.net, founder and CEO of Canadian domain registrar and DNS provider easyDNS.com and member of the indie rock sensations The Parkdale Hookers.

His personal blog is at markable.com

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