Startups like Bitcoin are a Breeding Ground for Fraud

Startups like Bitcoin are a Breeding Ground for Fraud

 

Bitcoin has been in the news recently when their CEO was arrested for money laundering through the site, and setting a tone for a very dangerous precedent .  There is popular a misconception among Startups, that because they are tougher for the government to regulate that they’re off the radar completely.  Arrogant founders violate and exploit this perceived weakness creating a greater opportunity for personal gain and fraud (A characteristic in The Sociopathic Business Model. ™)

‘In the federal criminal complaint, the Southern District of New York charges Shrem, the 24-year-old CEO of BitInstant, with three counts, including one count operating an unlicensed money transmitting business, one count of money laundering conspiracy and one count willful failure to file suspicious activity report.  (Trouble with the law is another characteristic of The Sociopathic Business Model ™.

Shrem talks of having to hire lawyers to make sure he stays out of jail; but, it would be easier to not let greed get in the way of good business.  (Lack of Accountability is yet another characteristic of The Sociopathic Business Model ™)

It will be interesting to see how the DOJ prosecutes this case or if he walks with a slap on the wrist.   If the DOJ doesn’t make an example out of people like Shrem, who have blatant disregard for the law, then they’re sending a message to all Startups that it’s ok to game the system and it will be encouraged, replicated and rewarded, at all too high of a cost to tax payers.

 

Thanks for reading-Melayna Lokosky

http://www.wired.com/threatlevel/2014/01/bitcoin-exchangers-arrested/

http://beta.slashdot.org/story/197389