Well, since they were arrested for "money laundering" it can easily be generasiled to any Bitcoin exchange...
"SHREM, who personally bought drugs on Silk Road, was fully aware that Silk Road was a drug-trafficking website, and through his communications with FAIELLA, SHREM also knew that FAIELLA was operating a Bitcoin exchange service for Silk Road users. Nevertheless, SHREM knowingly facilitated FAIELLA’s business with the Company in order to maintain FAIELLA’s business as a lucrative source of Company revenue. SHREM knowingly allowed FAIELLA to use the Company’s services to buy Bitcoins for his Silk Road customers; personally processed FAIELLA’s orders; gave FAIELLA discounts on his high-volume transactions; failed to file a single suspicious activity report with the United States Treasury Department about FAIELLA’s illicit activity, as he was otherwise required to do in his role as the Company’s Compliance Officer; and deliberately helped FAIELLA circumvent the Company’s AML restrictions, even though it was SHREM’s job to enforce them and even though the Company had registered with the Treasury Department as a money services business."
http://www.businessinsider.com/report-ceo-of-major-bitcoin-e...
Anyway, the market doesn't appear to be crashing, yet.
Should the U.S. decide to "start a war" against bitcoin just like they did with Poker, we'd end up in the same situation: servers outsides of the U.S., not using .com domain names, without the reach of the U.S.
I'm pretty sure that any Bitcoin exchanges outside the U.S. (like MtGox, BTC-E, Bitstamp... which are the three biggest ones) and their employees are shielded from U.S. laws. If they can't extrade Snowden out of Russia, I don't see how the U.S. could reach the BTC-E russian Bitcoin exchange.
The U.S. have been unable to stop online poker worldwide. Should they try to stop bitcoin worldwide, they'd fail too.
Now that said I don't think the U.S. government is going to ban bitcoin or to go on a crusade against bitcoin. At least I hope not.
The major charges against Pokerstars were bank fraud and money laundering. If those crimes occur in the US, the DOJ does not care where you are based.
How? Are you saying that BTC exchanges necessarily fail to comply with money laundering laws in the way the offenders here are accused of? They weren't charged with money laundering for selling bitcoins, they were charged with money laundering for doing things that would have been money laundering if they were done with dollars, euros, or anything else.
No, but
a) a lot don't,
b) all are way smaller than banks, much less cautious with accounting practices and with much reduced legal representation (lawyers) and political pressure.
> No, but
> a) a lot don't,
Well, yeah, I would a assume a lot don't fail to comply the way that occurred here (that is, a lot don't have their official responsible for AML compliance actively conspiring with money launderers to enable violations of the exchange's own AML policy and to conceal those violations from both the government, other officials of the exchange, and business partners of the exchange.)
That's rather my point.
I personally wouldn't put it past the US government targeting honest bitcoin exchanges but that doesn't seem like the case here
Most bitcoin exchanges require proof of identity, proof of residency, only accept wire transfer coming from the same identity as the owner of the account, etc. I wouldn't be surprised if they were soon to add a token sent by snailmail to the address given (like Poker sites in Europe do).
Transaction of fiat to/from Bitcoin exchanges are basically one of the easiest thing to track.
Many honest people are using Bitcoin exchanges and doing legitimate trading. Some may be doing "money laundering" just as criminals are using $100 and 500 EUR bills and are using highways. Most people using highways and bills are still honest people...
This entire "Bitcoin is only about money laundering / selling cocaine" is getting a bit old (but maybe I misunderstood your message).
I don't think VCs (and now business angels) would all be investing in Bitcoin / cryptocurrencies startups if they thought it was mostly money laundering.