A 52-year-old Michigan man has recently been charged with running an unlicensed money transmitting business for selling the equivalent of nearly $150,000 in bitcoin online through popular peer-to-peer exchange LocalBitcoins, according to an indictment published by Detroit TV news outlet WD-IV.
The man, Bradley Anthony Stetkiw, ran his unlawful exchange on LocalBitcoins, as he sold the number one cryptocurrency at a premium to interested buyers, meeting them at restaurants in the Bloomfield area to conduct these transactions.
Reports suggest Stetkiw sold bitcoins as part of a business venture for about two years, and the volume of transactions would require him to follow federal anti-money laundering regulations.
Notably, to catch Stetkiw court documents filed with the U.S. District Court for the Eastern District of Michigan show that federal agents, over the course of six meetings, bought over $56,000 (over one-third of the volume) worth of bitcoin from him. According to authorities, Stetkiw also broke deals with out of state sellers.
The indictment reads:
“Operating under the username ‘SaltandPepper,’ Stetkiw bought, sold and brokered deals for hundreds of thousands of dollars in bitcoins while failing to comply with the money transmitting business registration requirements set forth in Title 31, United States Code, Section 5330.”
Not the first LocalBitcoins-related arrest
Notably, this isn’t the first time a trader is prosecuted for using LocalBitcoins. Back in 2014, Krebs on Security revealed that two Floridians were arrested for breaking anti-money laundering laws in place in Florida, following meetings with undercover police officers who had arranged to buy bitcoins from them.
Last year, a similar case was reported in Egypt, where the Egyptian police arrested a 30-year-old dentist for trading bitcoin. Authorities contacted him on LocalBitcoins and arranged to exchange nearly $14,000 for Bitcoin at a rate of $570 per coin. Once they met, authorities arrested him.
These arrests make it clear that bitcoin is still far from being a mainstream currency and that governments still have to go a long way to accept cryptocurrencies. Although most central banks still express concern over the risks associated with bitcoin and other cryptocurrencies, some executives and renowned individuals have already weighed in on the advantages they bring to the table.