This is what happens to the "Taxation is Theft" crowd.

"A 21-year-old Bitcoin dealer from California has been indicted on several counts of crime which include money laundering and operating an unregistered money transmitting business. Jacob Burrell Campos was ordered held without bail on August 17 after investigations by the US Department of Justice reportedly unearthed a thriving underground Bitcoin exchange business that he operated."

It's not hard to imagine exactly what this guy was doing. Reading up on the plans of the government, Jacob kept the faith of Bitcoin as a peer to peer, anonymous cryptocurrency. He looked at all of the ID verification AML & KYC policies on Coinbase and was like "No, I don't want these people to trace every one of my transactions, Bitcoin is meant to be outside of the system."

So he bought some Bitcoins locally and traded his way up the ladder. He saw the opportunity of converting his Bitcoin into cash (again without the government figuring him out) by becoming his own exchange. Since Bitcoin was to be peer to peer, he just thought "Ah, I'll trade out the Bitcoins for cash and charge a small rate for the anonymity."

No verification, no AML laws, no compliance.

So it blows up in popularity, the government tracks him down, and now he's facing a potential 40 years in prison and a $1 million dollar fine. Simple as that.

Is this the price of freedom?

Face it, guys: The early days of Bitcoin are over. Just play it safe against the powers that be and pay your taxes, and if you're lending or exchanging cryptocurrencies, follow the regulations.

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