Entrapment has been and always will be a common tactic amongst law enforcement in America.
If they know people wan't prostitutes they will set up fake prostitution stings , if they know people want drugs they will have undercovers selling drugs, if they know people want to launder their illegally gained funds they will set up sting ops that would attract those type of people.
I don't think this is an attack on bitcoin so much, just another example of police going undercover and offering illegal things/services and then see who bites.
In a normal case of entrapment, everyone involved knows the product is illegal. Bitcoin is not illegal.
Unless there's more to this than just selling Bitcoin, which is a commodity, not a recognized form of money that goes through the banking system, this would be setting people up for something they had no reason even to believe was illegal, because this is a completely novel interpretation of the law.
Assuming, that is, that there is nothing more than selling Bitcoin involved here.
Knowing that the person you're selling bitcoin to is using them as a means to make an anonymous purchase of stolen credit card information would be considered aiding in money laundering as far as I see it. Selling bitcoin to someone is fine, selling bitcoin to someone who has told you he's converting his dollars so he can buy stolen credit card information with the bitcoins and he's told you this multiple times over a 2 month span is where things start to turn illegal.
Same would be true if someone approached you with cash and told you the money was stolen so he needed to exchange it for your cash so it wouldn't come back to him, that would be a similar situation. Trading cash isn't illegal, but in that situation you'd be helping someone launder money and you'd be aware of it since they told you the reason for the exchange.
So just to clarify, a lot of articles are leaving out the part about the undercover cop telling the bitcoin seller he needed the bitcoin to buy stolen cc info with it, supposedly the undercover agent said this multiple times over a 2 month span so the bitcoin seller has little excuse for saying he "didn't know"