Investigation into alleged unlicensed money transmission business uncovers an additional charge

Quick Take

  • Homeland Security Investigations investigated Bradley Stetkiw for potentially running an unlicensed money transmission business because of his Bitcoin exchange service
  • During the search of Stetkiw’s computer, investigators discovered he was in possession of child pornography
  • There was a dispute over the warrants used to search Stetkiw’s computer, and which evidence could be applicable in court, since the child pornography was uncovered during a search for evidence of an unlicensed money transmission business

Disclaimer: These summaries are provided for educational purposes only by Nelson Rosario and Stephen Palley. They are not legal advice. These are our opinions only, aren’t authorized by any past, present or future client or employer. Also we might change our minds. We contain multitudes.

As always, Rosario summaries are “NMR” and Palley summaries are “SDP".

[related id=1] United States v. Stetkiw, 2019 U.S. Dist. LEXIS 111216 (E.D. Mich. decided July 3, 2019)[NMR]

This is a criminal case that has resulted in some new precedent in the Eastern District of Michigan relevant to crypto. This is just further evidence that blockchain and cryptocurrency are slowly edging their way into the mainstream. Alright, great, what’s this case about?

Homeland Security Investigations was investigating Bradley A. Stetkiw for potential violations of 18 USC §1960, e.g., the prohibition against running an unlicensed money transmission business, because of Stetkiw’s Bitcoin exchange service. As part of that investigation the government obtained a warrant to search a computer for image and data files related to his running of the service that may be potential evidence. During that search the special agent for HSI found an image of child pornography, and immediately stopped his search. The agent then procured a second warrant for searching for child pornography. That warrant was granted, and ultimately, Stetkiw was charged with crimes related to running an unlicensed money transmission business, and possessing child pornography. So, what is this particular ruling about?

Well, the Fourth Amendment to the Constitution states “…no Warrants shall issue, but upon probable cause, supported by Oath or affirmation,