Illegal sales of Bitcoin: Controversy in the United States

What We Have Covered in This Article

1 Easy financing and payment method
2 Simple to hide
3 Legal gaps
4 Current situation
5 Reflection

Last Updated on April 29, 2018 by Editor Futurescope

In previous posts, we explain the topics related to the cryptocurrencies. Such as its ease of usages and freedom when making transactions. This time, we will show its negative side; being just this the justification that the regulators and legislators of each country or company possess.

We will use as a reference the report made by CNBC entitled “How Bitcoin is fueling the US opioid crisis?” Which exposes the case of Aaron Shamo, the millionaire scout who trafficked Opio.

Easy financing and payment method

Aaron Shamo was a typical university student, even leader of an Eagle Scout group. In 2009, he get an idea of a currency that can be used to make transactions without the need of third parties. Such as banks or financial entities, that is why he decides to utilize his computer for mining.

According to the report, it is estimated that it raised US $ 700,000 for being mined for 8 years. Therefore, when the 2017 boom occurs, the estimated value of his asset at 10 million dollars.

The problem of the situation was that he invested it, decided to use his fortune to build an opium network in his city. The authorities took approximately a year to track it, because it acquired and sold its merchandise through Bitcoin transactions.

This type of situations are those that generate distrust in the currency, because they facilitate the acquisition of capital of people of this type, allowing them to increase their level of reach. In addition, as cryptocurrencies are completely anonymous and decentralized. Tracing and locate participants in the illicit market is almost impossible.

Simple to hide

Shamo not only used bitcoins to sell his product, he also planned to purchase it, according to the report. He had the idea that Opium came from China, where the cheapest and deadliest of powders is produced. As the cryptocurrencies do not need to be handled by financial entities, such as Commercial Banks or Central Banks, there is no way to handle the international transaction, because the exchange of foreign currency is not necessary.

Legal gaps

The authorities that were in charge of the investigation asked themselves how he could cross the customs without being detected, questioning him was that he got the solution: cheap shipments.

Shamo used shipping services that do not request a recipient or issuer, it was only necessary to send and receive it in their offices. The way to hide it was to make sure that they were sent to the sites that received around a thousand packages a day and were only checked by dogs and X-rays.

By combining these cheap services with a currency that cannot be track, a legal gaps made his job easy!

Current situation

Shamo’s trial is scheduled to be held in August of this year. If found guilty of the accused crimes, he will have to serve a life sentence. CNBC follows the situation of this trial. Will continue to make reports as allowed by the authorities.

Reflection

Knowing the benefits and risks associated with cryptocurrencies, placing you in the position of developers / investors and legislators; do you consider that cryptocurrencies should be regulated? What would you do?

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