Burton Wagner, purportedly a bitcoin trader from Colorado, is reportedly facing up to five years in jail for unlicensed money transmission involving bitcoins. Prosecutors have also been seeking a $250,000 fine.
DC Magnates has not yet been able to obtain details of the exact nature of his business activities or the amount transmitted.
However, it would seem odd for such charges to be applied to bitcoin trading, which should then incriminate thousands of individuals. Intuitively, buying/selling bitcoins is not the same as moving them or fiat on behalf of third parties. Indeed, Wagner claimed in his defense, “The federal prosecutor believes a person must have a money transmittal license to buy and sell Bitcoins for individual investment.”
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The court document outlining the charges, however, claims that his business “involved the transport and transmission of funds that were known to the defendant to have been derived from a criminal offense and were intended to be used to promote and support unlawful activity.”
His website, bitcoinme.com, mostly contains links to various bitcoin-related resources.
It is also alleged that he assisted Trendon Shavers in his Bitcoin Ponzi scheme, for which the latter faces up to twenty years in prison. Posts on Bitcointalk from 2012 accuse him of knowingly participating in the scam and profiting from it. Documentation of his indictment makes no specific reference to the scam.
Correction: An earlier version of this article said Wagner was reportedly sentenced to 5 years in prison.