Bitcoin Crimes

bitcoin crimesYou’re probably familiar with “bitcoin” and other virtual cash systems that flourish in cyber space.  As you know, they provide an alternative to a credit card/cash driven world.  Here’s an interesting article about how the founder of Mt. Gox, the largest bitcoin exchange in the world, Mark Karpeles found himself in bitcoin crimes.

You know how bitcoin exchanges work: instead of banks and cash and credit balances, the exchange is totally virtual.  There isn’t any paper, coins, bank regulations, or government supervision.  And it’s anonymous—something that has led to increased bitcoin crimes.  Later about that.

Mark Karpeles is a Frenchman who moved to Japan and discovered bitcoin trading.  He had been a computer geek for years and saw the potential in bitcoin.  People deposit real cash in exchange for units or shares of bitcoins.  These shares may be traded with anyone anywhere in the world.  Like a foreign currency exchange, the value of the shares depends on the honesty of the people running the exchange.  Many of them are totally legit.

Why would people use a bitcoin exchange?

1.  There are no government regs or interference with the exchange.  Many people hate banks and governments so they use a bitcoin exchange instead.

2.  If a person can’t get a credit card by the usual means, they can transact business in this alternative method.  Maybe the person’s credit score is shot and they can’t get a card.  Instead, they could use a bitcoin exchange for those merchants who participate in them.

3.  The people transacting business on a bitcoin exchange can remain anonymous.  This is the big draw for most people.  There is never any tracking and reporting—as is required of banks in certain transactions.  But this has also led to bitcoin crimes.

Here’s an article about bitcoin crimes—they’re used often by criminals.  Also, the terrorist group ISIS is using bitcoin exchanges to transact their deadly business.

Let’s get back to Mark Karpeles.  He is accused of bitcoin crimes when, in February 2014 almost a half billion shares (dollars) were missing from Mt. Gox.  He can’t explain where all the shares went  Up to now, Mark Karpeles has denied participating in any bitcoin crimes.  His case is still pending, but for the people who had deposited real cash, a half a billion in real dollars is gone!

There are certainly lots of legitimate bitcoin exchanges, but the opportunities for fraud are enormous.  It’s well known that drug money or illegal proceeds are laundered through bitcoin exchanges—because the traders are anonymous and the transactions can’t be traced.

Have you ever used a bitcoin exchange?  Are you worried about bitcoin crimes?

This entry was posted in Uncategorized and tagged , , by Colin Nelson. Bookmark the permalink.

About Colin Nelson

Colin T. Nelson worked for 40 years as a prosecutor and criminal defense lawyer in Minneapolis. He tried everything from speeding tickets to first degree murder. His writing about the courtroom and the legal system give the reader a "back door" view of what goes on, what's funny, and what's a good story. He has also traveled extensively and includes those locations in his mysteries. Some are set in Southeast Asia, Ecuador,Peru, and South Africa. Readers get a suspenseful tale while learning about new places on the planet. Colin is married, has two adult children, and plays the saxophone in various bands.

Leave a Reply

Your email address will not be published. Required fields are marked *