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2 arrested in Bitcoin money laundering scheme: A first in Florida

Two men have been arrested in what police suspect to be the first case of its kind in this state. The two Florida men are suspected of money laundering using the new Internet currency known as Bitcoins. Both men were taken into custody and sent to Miami-Dade County jails.

Bitcoins, established in 2008, are growing as a valuable currency, largely based on the fact that it uses no central authority when issuing the currency. Instead, it uses a system involving a public ledger in order to verify the encrypted transactions. The currency has recently become popular in legal as well as illegal transactions.

In this case, Miami police officers went undercover to monitor users who had a high volume of Bitcoin activity. Two separate officers allegedly bought $1,500 in Bitcoins from the two men in different transactions. The officers also supposedly told each man that they were using the currency for illegal means — buying stolen credit card numbers. The officers later tried to buy $25,000 and $30,000 worth of Bitcoins, but only the former transaction went through. The exact details of why the two were arrested were not given, but they have been charged with two counts of money laundering as well as one count each of engaging in an unlicensed money servicing business.

White collar crimes such as money laundering can prove difficult for police to target a particular suspect; moreover, when the Internet is involved, it can prove even more difficult. Especially since Bitcoins are apparently based on using encryption, actually gathering the evidence to successfully prosecute both men may prove problematic. Regardless of the fact that this case may be the first of its kind in Florida, the men still have legal rights that they will obviously want to protect as their individual cases move forward.

Source: Bloomberg Businessweek, Miami Bitcoin Arrests May Be First State Prosecution, Susannah Nesmith, Feb. 10, 2014