Perhaps BitInstant CEO Charlie Shrem, who was arrested and charged with money laundering today, should have taken the advice he gave during a speech at the Bitcoin Conference in 2013.
Shrem, who was giving a talk on "Cash Deposits, Challenges and Ideas," is one of the more visible characters in the nascent industry and a founding member of the Bitcoin Foundation. At 26:52 in the video of his speech, Shrem recommends operating with the utmost of care:
"Companies like mine operating in the space need to be super careful on who they accept Bitcoin from, where they send their Bitcoin, who they're moving money around from."
"You have to know your customer. Let me say it again: you have to know your customer. Any startup, any Bitcoin company, anyone doing anything in the Bitcoin space, you have to know your customer. It's a very, very big problem when you have someone trying to start a Bitcoin company and saying, 'You know what, I'm just gonna not care, I'm just gonna let anyone use my system and have a nice day.'
You can't do that. Because if you're going to be operating a company in the United States, and if you're going to have employees, if you're going to be paying them health benefits, if you're going to be paying them salaries, if you're going to be running and operating a real company, you have to be compliant in that country. Whether or not you agree with the laws or not, you gotta follow them or you got to leave.
If the allegations in the criminal complaint filed against Shrem and his co-defendant Robert Faiella are true, it appears that Shrem did not think those warnings applied to him.
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