Unlicensed P2P Bitcoin trading will lead to jail time, and there have been several similar cases in the United States

The U.S. Department of Justice’s Maine Attorney’s Office recently announced: “A Detroit man was sentenced to one year in prison for operating an unlicensed Bitcoin business.” Sal Mansy’s actions involved different government agencies in two U.S. states, which ultimately led to his arrest. He was prosecuted for failing to report his P2P Bitcoin sales and the proceeds from them in advance, and was eventually sentenced to prison.

P2P Bitcoin Trading

Localbitcoins is a P2P exchange where buyers and sellers can safely trade cryptocurrencies without the need for fiat currencies. However, US law enforcement frequently targets the service, using currency laws to punish bitcoiners, despite the fact that lawmakers have long made it clear that bitcoin is not a currency.

Sal Mansy of Detroit is the third case of this kind. Mansy has been under investigation for a year for trading Bitcoin through Localbitcoins. The Department of Justice, the Treasury Department, the Financial Crimes Enforcement Network, Immigration and Customs Enforcement, Homeland Security Investigations, and the Saco Police Department are all involved in the investigation.

It is reported that Mansy traded $2.4 million worth of Bitcoin in two years starting in 2013. In June 2015, the agent and Mansy conducted two transactions of about 6 Bitcoins, which were worth $2,000 at the time.

Court documents allege that Mansy illegally operated an unauthorized money transmission business, in this case related to the virtual currency Bitcoin.

As a result, he faces a maximum of five years in prison and a $250,000 fine.

Other similar cases

This is the third case of this kind in the United States, two of which are from Michigan. Detroit is now almost synonymous with depression. As early as 2014, the city declared bankruptcy. So it is surprising that law enforcement targeted Mansy: he seemed to be one of the few residents in Detroit who was able to conduct financial transactions.

Mansy used his company Tv Toyz to store the proceeds from his Bitcoin transactions, which triggered a series of charges related to money laundering, fraud and operating without a license. Mansy will serve one year in prison and pay a fine of $118,000 (cash + Bitcoin). In addition, he must serve three years of parole.

The court documents do not mention that Mansy used the proceeds from his bitcoin trading to conduct illegal activities. But he is still considered a villain because he was forced to give up four years of his free life for "trading bitcoin without a license."

There are two other similar cases in the United States this year: Bradley Stetkiw, also from Michigan, was arrested by agents for sting operations; Jason Klein was charged with operating an unauthorized money service. Both are still awaiting final sentencing.