Be Careful When Trading Bitcoins for Cash – Bad Things Can Happen

I was at an airport killing some time talking to a random guy. He mentioned his neighbor was robbed the previous night. The story he told me was that this guy was “big into trading Bitcoins” ¬†and met some strangers at the local Starbucks to give some bitcoins in exchange for cash. Well, these guys followed him home and robbed him at gunpoint.

This highlights some of the problems when using LocalBitcoins.com or other such site. Yes, the transaction is anonymous but you run a really high risk of dealing with criminals. Plus if you’re a seller you could be in legal trouble as the government might label you a moneytransmitter, which requires extensive licensing.

Curiously the story was in the news, but doesn’t mention anything about Bitcoins.

Yorba Linda, CA Man Robbed at Gunpoint:

Orange County sheriff’s deputies are searching for four suspects accused of robbing a man at gunpoint in front of his Yorba Linda home.

The victim was approached by four men as he returned home around 9 p.m. Tuesday on Channing Lane, officials said.

One of the robbers was armed with a gun and demanded cash from the homeowner. Unconfirmed reports say the victim was robbed of up to $25,000.

The suspects, who officials said were wearing hoods and baseball caps, fled the scene with the money and the victim’s phone in what was believed to be a red four-door car.

The victim was not hurt in the crime.

Anyone with information on the suspects or the robbery was urged to contact the Orange County Sheriff’s Department.