Congressional Carnival [S1E3.1]: US Treasury Dept's Overreach Exposed as Bitcoin Traders Sentenced to Jail [STEEMIT EXCLUSIVE #2]
- The Emergency Banking Relief Act of 1933 expanded the presidential power of the purse during States of Emergency.
- The United States of America has remained in a "State of Emergency" since the Emergency Banking Act was passed by both houses of Congress and signed into law by President Franklin D. Roosevelt.
- Congress is obligated by the Emergency Banking Act to review all proclaimed States of Emergency within six months. According to this report, Congress rarely exercises their review responsibility.
Congressional Carnival
think-liberty.com
The Grand Jury Indictment for Two Bitcoin Traders Charged with "Conspiracy to Operate an Unlicensed MSB"
In Episode 2, I made the bold claim: "A law must exist before it can be broken." Unfortunately, that little bit of logic escaped the varied enforcement agencies which are content applying rules where no law exists. And, considering that the judiciary is complicit in allowing this farce, the "last hope" branch responsible for checking misappropriation of powers has effectively become the usher seeing Americans to their new prison homes.
A Grand Jury indicted Randall Lord and his son, Michael, on November 18th, 2015. They were sentenced to 46 and 106 months in jail, respectively. Doesn't do much for one's faith in a system of "checks and balances." And it doesn't bode well for crypto traders like the Lords. I went through the indictment and pulled out all the references to specific laws. From what I can tell, there are 19 laws which the U.S. Government (IRS-CI, ICE, HSI, FBI, and PIS) accused the Lords of breaking.
Let me ask. I just can't resist.
How much time have you spent reading the U.S. Code or the Code of Federal Regulations? Right. Because there's only two types of people who sit down with the CFR and a cup of hot coffee. And, the majority of people aren't them.
In Episode 3.1 of Congressional Carnival, we're looking at Title 31 of the U.S. Code and Title 31 of the C.F.R. which is where "Conspiracy to Run an Unlicensed Money Services Business" can be found. We'll take a look at the remaining laws in later episodes. The links, in the list below, go to the U.S. Code hosted by the Cornell Online Law Library.
Title 31 United States Code: Money and Finance
- 31 U.S.C. § 5313 - Reports on domestic coins and currency transactions
- 31 U.S.C. § 5317 (a)(1) - Search and forfeiture of monetary instruments
- 31 U.S.C. § 5318 - Compliance, exemptions, and summons authority
- 31 U.S.C. § 5322 - Criminal penalties
- 31 U.S.C. § 5331 (a) - Reports relating to coins and currency received in nonfinancial trade or business
Title 31 Code of Federal Regulations: Money and Finance: Treasury
- 31 C.F.R. 103 - Financial Recordkeeping and Reporting of Currency and Foreign Transactions
- recodified 31 C.F.R. Chapter X: 1010, 1022, 1023 - Financial Crimes Enforcement Network, Department of the Treasury
How can a law—31 USC 5313—which applies to "domestic financial institutions" and exempts "depository institutions" be applied to the business dealings of two crypto traders?
31 USC 5311: Declaration of purpose
It is the purpose of this subchapter (except section 5315) to require certain reports or records where they have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings, or in the conduct of intelligence or counterintelligence activities, including analysis, to protect against international terrorism.
With this Code, Congress requires financial institutions "reports or records" because "they have a high degree of usefulness." As in, without this data being given to the government, it is likely that no charges could be applied to otherwise innocent citizens. This type of blanket collection is no different from going to everyone's house and demanding that they show where they're keeping their on-hand savings. Can you see a Financial Census agent asking which mattress you keep your savings in? That's precisely what this code requires of financial institutions. But, don't worry, if you keep your life savings in cash and decide to move it from one location to another, you're bulk cash smuggling if it's over $10,000.
31 U.S.C. 5312: Definitions and applications [continued]
(3) ‘‘monetary instruments’’ means—(A) United States coins and currency; (B) as the Secretary may prescribe by regulation, coins and currency of a foreign country, travelers’ checks, bearer negotiable instruments, bearer investment securities, bearer securities, stock on which title is passed on delivery, and similar material; and (C) as the Secretary of the Treasury shall provide by regulation for purposes of sections 5316 and 5331, checks, drafts, notes, money orders, and other similar instruments which are drawn on or by a foreign financial institution and are not in bearer form.
Believe it or not, this section describes what constitutes a "financial institution" (the list was too long to copy over, but it includes things like banks, pawn brokers, and casinos) and crypto trader is not on the list. Congress has the power and capacity to add crypto trader if they want, yet they haven't. As you can see from the definition of "monetary instruments" digital currency, virtual currency, and cryptocurrency are not listed.
31 U.S.C. 5313: Reports on domestic coins and currency transactions
When a domestic financial institution is involved in a transaction for the payment, receipt, or transfer of United States coins or currency (or other monetary instruments the Secretary of the Treasury prescribes), in an amount, denomination, or amount and denomination, or under circumstances the Secretary prescribes by regulation, the institution and any other participant in the transaction the Secretary may prescribe shall file a report on the transaction at the time and in the way the Secretary prescribes. A participant acting for another person shall make the report as the agent or bailee of the person and identify the person for whom the transaction is being made.
This section clearly describes financial institutions "involved in a transaction" using US-issued coins, currency, or monetary instruments; it grants ambiguous power to the Secretary of the Treasury; and requires domestic financial institutions to report client transactions to the government. That this law only applies to financial institutions dealing in currency is written in pretty plain language, considering the general condition of legalese.
The importance of defining terms is seen below:
31 U.S.C. 5313: Reports on domestic coins and currency transactions (continued)
(g)Depository Institution Defined.—For purposes of this section, the term “depository institution”— (1) has the meaning given to such term in section 19(b)(1)(A) of the Federal Reserve Act; and (2) includes— (A) any branch, agency, or commercial lending company (as such terms are defined in section 1(b) of the International Banking Act of 1978); (B) any corporation chartered under section 25A of the Federal Reserve Act; and (C) any corporation having an agreement or undertaking with the Board of Governors of the Federal Reserve System under section 25 of the Federal Reserve Act.
Of the varied types of financial institutions out there, only the "depository institution" is exempt from these reporting requirements; which doesn't matter at all to crypto traders, convenience stores, or any other non-financial institution (or legal person). From this definition, you can see that Congress clearly had banks and businesses that dealt with banking under the Federal Reserve Act (we'll cover this later, too).
That means, by law, crypto traders aren't financial institutions and cryptocurrency isn't money.
What do these laws have to do with the Lords? Good question. They were accused of "Failure to File CTRs" which means "currency transaction reports." Are you following this? Two guys who were trading cryptocurrency not "monetary instruments" and who were by definition not "financial institutions" didn't file a report that only financial institutions are required to file.
We'll pick up the injustice trail in a couple days, after I've had a chance to sit down with the next two laws on our list: 31 U.S.C. § 5317 and 31 U.S.C. § 5318. In the mean time...
Who can help?
How can YOU help?
- Resteem, upvote, and comment on this post. 100% of the proceeds will be used to support the Lord Legal Defense Fund.
- Share this post on LinkedIn, Twitter, Facebook, and whatever other social media networks you prefer. Use the tag: #freethelords
- Contact the ACLU and ask them to stand up and protect cryptotraders from government infringement of our civil liberties.
- Stay tuned for upcoming "Congressional Carnival" posts where we’ll dissect the Lords' grand jury indictments, examine the language of the laws (USC) and regulations (CFR), as well as discover what court precedence has already been set.
- Write a SteemIt post about interactions between governments and cryptotraders. Put your link into the comments!
- Sign the Whitehouse.gov Petition to have the Lords pardoned.
Up Next on Congressional Carnival [S1E3.2]
Congressional Carnival [S1E3.2]: US Treasury Dept's Overreach Exposed as Bitcoin Traders Sentenced to Jail [STEEMIT EXCLUSIVE #3]
Further Readings: In No Particular Order
Detailed Guide to U.S. Code
U.S. Code: Positive Law vs. Non-Positive Law
31 USC 5304: Regulations & 31 USC 5311: Declaration of Purpose (reports)
31 CFR 1020-220: Customer Identification Program
Office of the Comptroller of the Currency: History
OCC: BSA and Related Regulations
Money Laundering Control Act of 1986
February 2, 1934 - Executive Order 6581 Creating The Export-Import Bank of Washington
Export-Import Bank Act of 1945
EXIM: Export-Import Bank of the United States
EXIM: Due Diligence Standards (KYC)
IRS: List of Approved Know Your Customer Rules
[DISCLAIMER: I am a blogger. This article is presented for informational purposes. If you're a crypto trader seeking legal advice, get a lawyer and read up on the laws that "apply". We're treading over new ground and what we do next will set the precedence.]
Twitter: mfinley80
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Woah! You are well-read with the law! I can see you've put a lot of effort into this and I wish more people get to read this. Very interesting stuff. I bet a lot of crypto buffs would appreciate the research you did for this!
I hope more people take a look. I know legalese is tough to read, I'm hoping to help folks get through it. This is so important for every US citizen using cryptocurrencies. Randall and Michael Lord could be anyone of us. It's crazy to me that all over America, families are torn apart by overreaching bureaucracy hellbent on maintaining their relevancy and their budgets. 5% of the world population, 25% of the world prison population. I've never been good with statistics, but I comprehend that the ideals of "freedom" don't include shackles.
Yeah, I guess it affects only US citizens considering all of the laws. In a way, it still has some global ramification, because the sentiment could echo to other countries as well.
It really is a global issue. What with the US taking foreign banks to US court. And, as you say, "the sentiment could echo to other countries as well."
Since the whole world is so globalized now, what happens to one country can't help but have ramifications for others. It's tough to be isolated now. Heck, even what goes on in NoKor affects other countries as well.
Once again: True Dat!
Wow. This is some terrible stuff.
It really is. The deeper I dig into the Randall Lord case, the scarier the overreach gets. And, now, with the recent "ruling" by the SEC... it looks like it wont stop anytime soon, unless we do something about it.
We may have a tough road ahead of us but they will learn this is something they can't control.
That's what they fear most.