Law Office of John W. Noonan
925-463-3340 Call For A Free Initial Consultation Se Habla Español Available 24/7

Bitcoins turn out to be another bad bet for the Winklevoss twins

“Truly innovative business models don’t need to resort to old-fashioned law-breaking,” Manhattan’s U.S. Attorney said in a statement. That’s precisely the point that storied investor-twins Cameron and Tyler Winklevoss were expected to make at hearings last week before banks and regulators.

The twins, best known for their decades-long ownership dispute with Facebook, had invested in the electronic currency Bitcoin and were hoping to convince the financial sector that Bitcoins are a perfectly legitimate form of currency -- not tokens used to pay for illegal drugs online or in connection with other cybercrime.

Unfortunately, the Winklevoss twins’ latest enterprise took an unfortunate hit just as they were preparing their arguments for the full acceptance of Bitcoins. Their largest Bitcoin investment -- $1.5 million -- was in a company called BitInstant, and the founder of BitInstant was arrested on Jan. 26 on charges of using Bitcoins to launder money for use on the black-market drug trafficking website known as the Silk Road.

Bay Area residents may recall that the alleged mastermind of the Silk Road, a man known on the web as “Dread Pirate Roberts,” was arrested in San Francisco’s Glen Park Branch Library in October and charged with offenses ranging from narcotics trafficking to attempted murder.

The 24-year-old founder of BitInstant is accused of taking $1 million in cash from a man called “the BTCKing” in exchange for Bitcoins he planned to use on the Silk Road. The BTCKing was arrested on Jan. 27.

Both men are facing a number of cybercrime charges, including conspiracy to launder money and operating an unlicensed money-transmitting business. The founder of BitInstant is also charged with willful failure to file a suspicious activity report as required by the anti-money laundering provisions of the Bank Secrecy Act. If BitInstant ‘s founder is convicted on all charges, he could face a maximum sentence of 30 years in federal prison.

“When Bitcoins, like any traditional currency, are laundered and used to fuel criminal activity, law enforcement has no choice but to act,” reads the rest of that statement from the U.S. Attorney in Manhattan. “We will aggressively pursue those who would co-opt new forms of currency for illicit purposes.”

So, the Winklevoss twins have made another awkward investment in an online phenomenon. They have not been accused of any crime.

Source: Upstart Business Journal, “Horrible timing on Winklevoss investment arrests for Silk Road money laundering,” Michael del Castillo, Jan. 27, 2014

Recent Case Results

  • Drunk Driving Offenses

    John was able to get client a reduction of charge of a DUI because of being a nurse it could mean her license.

    He secured a Drunk in Public , and she would attend a 3 month program. Additionally, the dmv hearing was also set aside.

    Both being a win for the client.

    Read More
  • Domestic Violence

    A client was arrested for a Felony Domestic Violence, could have devastated her potential for future employment. John was able to get the case dismissed. Client was thrilled.

    Read More
  • Juvenile Charges

    A juvenile was arrested for 2nd Degree Robbery. After 6 months the case was dismissed.

    A juvenile was arrested for Sexual Battery. After 6 months and 80 hours of Community service, the case was dismissed.

    Read More
  • Drunk Driving Offenses

    A client with a 1st DUI arrest. Fearing she would go to jail; lose her license for a year and lose her job. Got a wet reckless and minimal fines.

    Read More
  • Drug Charges

    A client with 4 Felony charges on a Transportation Charge, a Attempt to Sell, Possession of Marijuana, (50 pounds), Conspiracy Charge all where reduced to 1 Misdemeanor. No Jail.

    Client was charged with 6 Felony drug possessions. Facing jail time. The results: Client got a deferred entry of judgment and then dismissed.

    Client charged with several felony counts of possession of Marijuana with intent to sell. Client was involved in a medical marijuana grow. Case was reduced and later dismissed.

    Read More
  • Sex Crimes

    A client with alleged 2 Felony Sex charges and he faced jail and sex registration. The case was entirely dismissed.

    Client charged with prostitution; facing jail time and sex offender registration. Result: NO JAIL TIME AND NO SEX OFFENDER REGISTRATION Deferred Entry of Judgment.

    Read More
  • Domestic Violence

    Client charged with domestic violence, with great bodily injury. Case reduced to a misdemeanor with time served.

    Read More
Email Us For A Response

Learn How We Can Help

Contact Information

Areas We Serve

Dublin Office
6379 Clark Avenue
Suite 250
Dublin, CA 94568

Phone: 925-463-3340
Fax: 925-479-0015
Dublin Law Office Map

Manteca Office
210 East Center Street
Suite 10
Manteca, CA 95336

Phone: 925-463-3340
Fax: 925-479-0015
Manteca Law Office Map

Back To Top