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BTC-e and its founder charged in 21-count indictment over hack of Mt. Gox

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Re: BTC-e and its founder charged in 21-count indictment over hack of Mt. Gox

#71

Post by sitharus »

khuey wrote: post #65
jcranmer wrote: post #56

Earlier quoted context omitted.

The concept involved here is extraterritorial jurisdiction--the US claims the right to enforce its laws on its citizens abroad in some circumstances. The most notorious uses in the US are FATCA (basically forcing foreign banks that do business with US citizen to hand information over to the US) and the FCPA (allowing anyone with pretty much tangential relationship to the US to be sued for bribery). It's telling that…

None of that unparalleled power is needed in this case. Greece and the US have an extradition treaty, the crimes alleged by the US are serious, dual criminality exists, they're not political offenses, the guy isn't facing the death penalty, and he's not even a Greek citizen. This is a by-the-book extradition.

Traditionally an extradition treaty would require the crimes to have occurred on US soil. We’re slowly figuring out how this applies to the digital age.

Re: BTC-e and its founder charged in 21-count indictment over hack of Mt. Gox

#72

Post by khuey »

modeless wrote: post #67
openmosix wrote: post #22

The question for me is: why US? He is a Russian citizen, the company is based in Bulgaria, servers in Russia, legal HQ in Cyprus and all the services operated from Seychelles - arrested in Greece. The MtGox hack affected a Japanese company. I'm not debating the nature of the crimes, etc - I am just wondering, when does it become a US case? I can get the "there were US customers" - but why not Europe? Or Japan? Or Rus…

Look at the actual charges in the indictment. All the BTC-e stuff is not what he's charged with. He's charged with transferring stolen Mt Gox Bitcoins to Tradehill, a San Francisco based exchange (now defunct). That's the US connection that will seal his extradition. They also allege that BTC-e is (at least partially) hosted in the US and does business with many US companies, which is likely true. But that's not what…

Yes, the blockchain is a fantastic resource for Feds prosecuting financial crimes. In order to get away with these things you need to have flawless opsec, because the moment they can connect one thing to you everything quickly unravels.

Re: BTC-e and its founder charged in 21-count indictment over hack of Mt. Gox

#73

Post by kijin »

lettergram wrote: post #16

I still don't understand, the U.S. is charging a Russian with a white collar crime? The crime was committed outside the U.S., he didn't come to the U.S., the servers weren't in the U.S., Mt.Gox was based out of Japan, and Greek police arrested him. I've seen this enough to know this is common, but what is going on with this world?

As soon as you touch USD, you're fair game for US authorities. It's like a shrink wrap license.

Re: BTC-e and its founder charged in 21-count indictment over hack of Mt. Gox

#74

Post by comex »

modeless wrote: post #67
openmosix wrote: post #22

The question for me is: why US? He is a Russian citizen, the company is based in Bulgaria, servers in Russia, legal HQ in Cyprus and all the services operated from Seychelles - arrested in Greece. The MtGox hack affected a Japanese company. I'm not debating the nature of the crimes, etc - I am just wondering, when does it become a US case? I can get the "there were US customers" - but why not Europe? Or Japan? Or Rus…

Look at the actual charges in the indictment. All the BTC-e stuff is not what he's charged with. He's charged with transferring stolen Mt Gox Bitcoins to Tradehill, a San Francisco based exchange (now defunct). That's the US connection that will seal his extradition. They also allege that BTC-e is (at least partially) hosted in the US and does business with many US companies, which is likely true. But that's not what…

For one of charges in the indictment, "Operation of an Unlicensed Money Transmitting Business" (18 USC § 1960), they allege that BTC-e satisfied two conditions, either of which alone would have been sufficient to prove the charge. One of the conditions is knowingly transmitting funds derived from a criminal offense, but the other one is just "fail[ing] to comply with the money transmitting business registration requirements set forth in [31 USC § 5330]". So I'd say the BTC-e stuff is indeed part of "what he's charged with", albeit not the main focus.

Re: BTC-e and its founder charged in 21-count indictment over hack of Mt. Gox

#75

Post by School-Cotton »

openmosix wrote: post #22

The question for me is: why US? He is a Russian citizen, the company is based in Bulgaria, servers in Russia, legal HQ in Cyprus and all the services operated from Seychelles - arrested in Greece. The MtGox hack affected a Japanese company. I'm not debating the nature of the crimes, etc - I am just wondering, when does it become a US case? I can get the "there were US customers" - but why not Europe? Or Japan? Or Rus…

Russia "can" do whatever it wants to you while you're in its territory, because it's a sovereign state.

Any "international law" that would stop this is toothless.

Re: BTC-e and its founder charged in 21-count indictment over hack of Mt. Gox

#76

Post by khuey »

sitharus wrote: post #71
khuey wrote: post #65

Earlier quoted context omitted.

None of that unparalleled power is needed in this case. Greece and the US have an extradition treaty, the crimes alleged by the US are serious, dual criminality exists, they're not political offenses, the guy isn't facing the death penalty, and he's not even a Greek citizen. This is a by-the-book extradition.

Traditionally an extradition treaty would require the crimes to have occurred on US soil. We’re slowly figuring out how this applies to the digital age.

The charges in the indictment are for illicit transactions with TradeHill which was based in the US.

Re: BTC-e and its founder charged in 21-count indictment over hack of Mt. Gox

#77

Post by vkou »

lettergram wrote: post #16

I still don't understand, the U.S. is charging a Russian with a white collar crime? The crime was committed outside the U.S., he didn't come to the U.S., the servers weren't in the U.S., Mt.Gox was based out of Japan, and Greek police arrested him. I've seen this enough to know this is common, but what is going on with this world?

> The crime was committed outside the U.S., he didn't come to the U.S., the servers weren't in the U.S., Mt.Gox was based out of Japan, and Greek police arrested him.

No, but he either robbed, or laundered money for people who robbed US citizens (MTGOX customers.)

Re: BTC-e and its founder charged in 21-count indictment over hack of Mt. Gox

#78

Post by kobeya »

modeless wrote: post #67
openmosix wrote: post #22

The question for me is: why US? He is a Russian citizen, the company is based in Bulgaria, servers in Russia, legal HQ in Cyprus and all the services operated from Seychelles - arrested in Greece. The MtGox hack affected a Japanese company. I'm not debating the nature of the crimes, etc - I am just wondering, when does it become a US case? I can get the "there were US customers" - but why not Europe? Or Japan? Or Rus…

Look at the actual charges in the indictment. All the BTC-e stuff is not what he's charged with. He's charged with transferring stolen Mt Gox Bitcoins to Tradehill, a San Francisco based exchange (now defunct). That's the US connection that will seal his extradition. They also allege that BTC-e is (at least partially) hosted in the US and does business with many US companies, which is likely true. But that's not what…

As an actual cryptographer who has looked into it, I wouldn't put too much faith in Monero's fungibiliry. The story is not as good as the PR would have you believe, and is really not all that different from Bitcoin with CoinJoin.

Re: BTC-e and its founder charged in 21-count indictment over hack of Mt. Gox

#79

Post by nubela »

kobeya wrote: post #78
modeless wrote: post #67

Earlier quoted context omitted.

Look at the actual charges in the indictment. All the BTC-e stuff is not what he's charged with. He's charged with transferring stolen Mt Gox Bitcoins to Tradehill, a San Francisco based exchange (now defunct). That's the US connection that will seal his extradition. They also allege that BTC-e is (at least partially) hosted in the US and does business with many US companies, which is likely true. But that's not what…

As an actual cryptographer who has looked into it, I wouldn't put too much faith in Monero's fungibiliry. The story is not as good as the PR would have you believe, and is really not all that different from Bitcoin with CoinJoin.

Elaborate. Your statement says nothing but "I'm a software engineer so believe me what I say Slack app sucks'

Re: BTC-e and its founder charged in 21-count indictment over hack of Mt. Gox

#80

Post by reitanqild »

MichaelGG wrote: post #64
olalonde wrote: post #48

Earlier quoted context omitted.

> that money came from sources in the US What I meant is I've been to a restaurant which turned out to be a money laundering front but I can't seriously describe myself as a victim. In fact, the food there was cheap and delicious! But I appreciate your clarification. To rephrase what you are saying: it falls under US jurisdiction because some US persons were victims of a crime and some of that crime money ended up be…

Yeah my favourite pharmacy just closed - pretty sure it was a money laundering op. Huge warehouse, fully staffed, inventory from pharmacy to electronics, hardware to perishable goods (but just random retail packages). In a couple years I've never seen more than 1 other car in the 50-space parking lot. Amazing service. And of course there's no victims in money laundering. It's a victimless crime that has the sole purp…

And of course there's no victims in money laundering. It's a victimless crime that has the sole purpose of helping prosecutors when they aren't able to find a real crime.

While the laundry operation is victimless it often directly assists crimes that have very real crimes:

Trafficking

Drug abusers [0]

Illegal weapons trade [1]

[0]: Esp. as since it is currently illegal they suffer a lot as getting their drugs means dealing with people you normally don't want to deal with and doing stuff you rather wouldn't do.

[1]: no, I'm still pro guns. I just don't want them sold illegally.

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