Yesterday, the charges against a Michigan bitcoin trader known as SaltAndPepper (S&P) were dropped due to the governments inability to sufficiently build a case.

As we reported last year, S&P (Mr. Bradkey Stetkiw) operated in the state of Michigan where we outlined the details of how money transmissions charges against him might not stick and that we felt he had a very good chance of beating them.

In a nutshell we came to the conclusion that according to Michigan state law and regulations in the Act that governs this type of activity, S&P would not meet the criteria for being defined as a "money transmitter service" and this, the federal government had nothing to stand on.

As it turns out, S&P won't even have to defend himself at all. Due to the governments lack of evidence and apparent additional parties in question, they were unable to build a case within the allotted 30 day time period as prescribed by the Speedy Trial Act (18 U.S.C. §§ 3161(b), 3161(h)).

His attorney moved for a dismissal based on these grounds of which was granted.

No Money Transmission

As we stated last year, it didn't appear that under the laws within S&P's jurisdiction, that he had done any form of money transmission. At worst, he violated federal law if he weren't registered with FinCEN or the CFTC, however, that was not the charge against him.

He was specifically charges with transmitting money and the reasons given were once again the HSI setting him up and some apparent other parties one of which so called "deals" was debunked by the governments own evidence listed in court documents.

They state that S&P brokered a large cash deal and stated this as one of the points of concern and evidence supporting the charges, however, in their own statements they state that S&P himself said that he received absolutely no fee for the arrangement and merely pointed them in the direction of another individual to help.

Not only is that not money transmission, it's not even a crime of any kind at all and rather ridiculous that anything at all was even mentioned regarding that transaction.

The government couldn't build a case because the had nothing to build a case on. This was the correct outcome for this case and it can certainly be argued that there never should have been a case to begin with.

We are happy to have predicted this one partially wrong. We were right in that there was no case to begin with as we stated in last years article, however, we were afraid they would impose a lesser charge if S&P took a plea bargain as we predicted. We're glad that didn't happen and even if it had, would have likely just resulted in a small fine and some probation time at worst.

It poses the question about the charges themselves having any warrant at all. Should they have ever existed in the first place?

Obviously since there was no case built, there are things we simply are not aware of regarding the evidence that may or may not have been available, but clearly if a case cannot be put together within a reasonable amount of time then there's no reason the damn thing should have been there to begin with.

It sure appears as if S&P was unfairly indicted for selling bitcoin for no other reason than the HSI tried to set him up and it didn't fly.

You can view the motion here and the order here.


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  1. On cannot look at stuff in a vacuum .... Two weeks ago a Jury convicted another bitcoiner of Money laundering. Money Laundering has two part, trying to conceal the provenance and failing to report.

    S&P like many Localbitcoin traders were charged with failing to report and not trying to conceal.

    In Arizona, the government clearly said that LocalBitcoin was legal, trading on LocalBitcoin was legal and that traders on LocalBitcoin were not institutions, and institutions are those that can convicted on failing to file.

    We are waiting for the transcript to be published.
    https://twitter.com/2dinbits/status/988863340230430720

    ReplyDelete
    Replies
    1. Agreed and we've covered just about all of the cases in great detail:

      This link should give you a search: https://news.dinbits.com/search?q=trader+arrested

      Likely won't pick everything up, but it'll give you an idea.

      This search link: https://news.dinbits.com/search?q=case+review

      Should give you the cases where we've done in-depth case reviews, you may find it useful. Also if you click the regulatory map, under each state there's a "case law" tab that has various legal cases. Although that's not 100% up to date, it does contain a good deal of information.

      Hope you find it useful.

      Delete
  2. One need to look carefully at this story. https://news.dinbits.com/2018/04/arizona-bitcoin-trader-convicted-of.html

    ReplyDelete

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