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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

#81

Post by ccrush »

Dolores12 wrote: post #51

1) Arresting btc-e admin made all US customers to lose their balances on btc-e exchange. I highly doubt btc-e will come back online. 2) If you run online exchanger and have a single US customer, then you have to register your operation in USA. I find it ridiculously stupid.

It gets better: while criminal charges for illegal banking practices are part of United States Code (title 18 covers crimes), the banking REGULATIONS that one must adhere to are codified at the State level. This means you must apply for 50 or so different licenses in order to legally do business as a Money Transfer Agent and Money Services Busimess in the United States. Although it seems overly burdensome and deliberately conceived to hinder practicing this line of business, the truth is that it creates an environment where consumers of the products and services offered by these businesses are better protected from fraud, as well as fostering an ecosystem of diverse business practices which leads to an advanced rate of innovation. It's a strange system, but it works very well. The downside is that it takes about $30M in cash to start one of these businesses just to fulfill regulatory requirements vis-à-vis the licensing, deposit, and audit requirements.

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

#84

Post by wbl »

nubela wrote: post #79
kobeya wrote: post #78

Earlier quoted context omitted.

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'

Analysing monero traceability is hard. Early wallets picked addresses to use in bad ways. A lot of academic work us needed. Luckily ZeroCoin exists.

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

#85

Post by RandVal30142 »

smitherfield wrote: post #69
RandVal30142 wrote: post #23

Earlier quoted context omitted.

> If you start a gay social network in US, can Russia come in (the first time you are flying in one of the Russia's partners territories) and say "you are breaking Russian gay laws, you are under arrest"? Yes.

You're right, despite being downvoted, although such an arrest would almost certainly become a major diplomatic incident. OTOH someone who broke a Russian law we don't find objectionable (and who isn't connected or famous) would be unlikely to get much assistance from the embassy beyond basic legal advice and help hiring a lawyer.

>despite being downvoted

Ain't no thang but a chicken wang.

I have a few deep biases against the Russian govt for reasons I won't delve into here. Despite this I believe in extradition laws as a tool of enforcement beyond borders and a means of political outreach/goodwill building.

If Russia made unreasonable demands then we would be right to turn them down. If they need assistance with something truly heinous and actionable then it feels like our duty to act upon it. These international interactions are just as important as education & commerce to building lasting diplomatic relations.

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

#86

Post by jordanbaucke »

jcranmer wrote: post #56
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…

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…

@jcranmer agreed. US financial markets (breadth/depth) / US law influence over multi-jurisdicational banking entities, ensures that US law can/will be enforced by almost all players.

Should the authorities in a particular jurisdiction fail to enforce financial crimes, indicting a bank or sanctioning an individual in that region can effectively block all counter-parties from doing business with them (as they are now doing business with a sanctioned or indicted party).

It's hard to explain in laymens terms without sounding like some kind of "Illuminati-nut" (for lack of a better term) ):

And also requires a better understanding of interbank standards and practices, money/current-markets, SWIFT, etc.

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

#87

Post by wbl »

frozenport wrote: post #58
sigmar wrote: post #32

Earlier quoted context omitted.

Countries charge foreign nationals of crimes all the time. The fact that this is surprising to many people in these comments is horrifying.

That's not confusing, what's confusing is his lack of direct association with the USA. There are a handful of other countries that would appear to be more responsibility for his actions.

He conducted transactions with US persons as part of the illegal conduct. That's a sufficient nexus.

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

#88

Post by gst »

Dolores12 wrote: post #51

1) Arresting btc-e admin made all US customers to lose their balances on btc-e exchange. I highly doubt btc-e will come back online. 2) If you run online exchanger and have a single US customer, then you have to register your operation in USA. I find it ridiculously stupid.

> 1) Arresting btc-e admin made all US customers to lose their balances on btc-e exchange. I highly doubt btc-e will come back online.

I wouldn't be too sure about the US having control over the BTC-e wallets. Their Ethereum hot wallet[1] (with around $100M funds in it) has been untouched since the website has gone down. I'd assume that there's more than one person at BTC-e having access to those funds. Assuming the US government has access to the keys - why didn't they move the funds somewhere else in order to secure them?

[1] https://etherscan.io/address/0x91337a300e0361bddb2e377dd4e88...

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

#89

Post by reitanqild »

mirimir wrote: post #47
ajross wrote: post #44

Earlier quoted context omitted.

Uh, "surely"? It seems extraordinarily unlikely that in a $4 BILLION money laundering effort that none of that money came from sources in the US. More to the point though: money laundering statutes were written (speaking very broadly) because they don't have to prove the underlying crime. It's criminal to be evading disclosure and tracking requirements even if all the money was obtained legally.

> It's criminal to be evading disclosure and tracking requirements even if all the money was obtained legally. It was criminal to help fuel a nuclear arms race that put everyone at risk of nuclear holocaust. It was criminal to destroy Iraq for bullshit reasons. It's criminal to kill people with drones based on metadata. But criminalizing money laundering? That's just power tripping.

I've answered this elsewhere but basically money laundering is responsible for keeping the wheels turning in a lot of real criminal activities like human trafficing and illegal weapons trade.

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

#90

Post by dragonwriter »

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.

> Traditionally an extradition treaty would require the crimes to have occurred on US soil.

No, they wouldn't have. While each extradition treaty is to an extent sui generis—they are individually negotiated, not boilerplate—extradition under such treaties for non-digital, meatspace offer see where the accused's acts at issue are not charged to take place in the physical territory of the extraditing country are often within their scope. In particular, no territorial restriction on the location of the offense eligible for extradition appears, unless I've overlooked it, in the US-Greece extradition treaty, which long predates the digital age.

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