#CyberFLASH: How a Canadian was charged with money laundering in sale of bitcoins


On a hot Florida morning a week ago, a young Quebecker named Pascal Reid showed up at a boutique hotel in Miami’s Art Deco district, carrying a laptop and an electronic wallet that held $316,000 in digital currency.

Mr. Reid was expecting to meet a man who had purchased bitcoins from him before. The buyer was, in fact, an undercover agent for the U.S. Secret Service, which arrested Mr. Reid and charged him with money laundering.

The case has shone a spotlight on the way that virtual currencies such as bitcoin have been used for illicit purposes. The arrest is also significant because it targeted people using Localbitcoins.com, an online directory that is one of the last places where bitcoins can be traded anonymously, an expert said.

“Bitcoin may be pseudonymous, but actually buying and selling bitcoins anonymously is not easy,” Nicholas Weaver, a senior researcher at the University of California at Berkeley’s International Computer Science Institute, said in an e-mail interview.

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