“Bitcoins for cash in bags” trader gets 12 months in prison
We found the full story in what’s called the Sentencing Position document filed by the United States of America in its federal court case against Theresa Tetley, aka the “Bitcoin Maven”. The Bitcoin Maven (a maven, in case you are wondering, is an expert or connoisseur) had already pleaded guilty to money laundering charges relating to bitcoins; this time she was back in court to be sentenced. Simply put, Tetley did indeed buy bitcoins for hard cash, according to the prosecutors.
Buying bitcoins, even for hard cash, even in huge amounts, isn’t illegal, provided that you comply with the relevant laws relating to trading in cash. And that’s where she got into trouble. Firstly, if you do cash trades as your profession, rather than just as a hobby, you’re a “money transmitting business” and you need to register, something Tetley didn’t do.
Prosecutors pointed out that Tetley most certainly did operate as a business, given that she maintained ledgers, owned a money-counting machine “to ensure that she was always accurate”, and had paid out between $6,000,000 and $9,500,000 in cash over three years. Six million, it seems, is a bit much for a hobby. Secondly, if you do any individual trades involving more than $10,000 in cash, you have to declare them.
It would have been tricky for Tetley to have complied with this part of the law without incriminating herself on the first point – and prosecutors knew she had done at least three transactions over $10,000 because they’d had undercover federal agents do those deals.