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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

#181
post #103
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.

How are Confidential Transactions in combination with Ring Signatures not way better than Bitcoin+CoinJoin? If you focus on the transactions after the RingCT merge and not older 0-mixins, it's seems pretty strong to me.

This paper explains in some basic detail why CoinJoin is a half-solution vs. Ring sigs + RingCT

http://weuse.cash/2016/06/09/btc-xmr-zcash/

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

#182

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.

> 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. When you don't know much about something, it can often look stupid. This isn't new or complex, though. If you do business across a border, governments on either sides of the border may take an interest in the transaction. If you don't like that, don't do business across a border…

    > When you don't know much about something,
    > it can often look stupid.
This is just a rude remark. Do you think it's appropriate if I said "Heh, cute, wpietri, but many things are only defensible when you don't understand them."

Also, "if you don't like it, don't do it!" is not a commentary on the issue.

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

#183

Earlier quoted context omitted.

Only way to launder BTC - break the history chain, so to speak - is to first pull it out of the network - which requires either an exchange, or like a street deal (cash for BTC). Exchanges require identification so either there's a dodgy one that doesn't ask for that, or you get a mule. Anyway, then you have cash money, you buy BTC back. Or keep the cash, I mean I wouldn't want to keep BTC if I had stolen it. It's pr…

Actually you don't need to get it to cash, change it to another crypto such as LTC or ether on an exchange, send it off exchange to another exchange and buy back btc to have unlinked coins. You could also use a mixer for the alt coin as you move it between exchanges for further obfuscation. Most exchanges that deal in alt coins only require ID/verification if you want to exchange to fiat, so crypto to crypto can be d…

If you think about it, we are one step away from tracking everyone's crypto transactions.

That step is putting pressure on exchanges to blacklist coins that have been through a mixer.

Cash is the ultimate mixer because of lack of technology.

But it's not hard to put pressure on exchanges.

This is why digital money is ultimately traceable. And the most tracdabke money is one that has a global, distributed ledger :)

Far better to have trustlines. You would have to track down friends of friends, and deanonymize people's public keys. Unlike Bitcoin, anyone can start a trustline with anyone else without authorization from the government :)

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

#184
post #60

Although I don't understand the US's involvement in this -- a man breaking the rules is being put to justice, and I'm very glad. I'm also impressed by the feds work in the cryptocurrency space. In recent years the fed has really started to reverse the trope of the government not being technologically adept. There are too many that become wealthy through illicit means and it's good news that something effective is bei…

>Although I don't understand the US's involvement in this -- a man breaking the rules is being put to justice, and I'm very glad.

This is a terrifying comment.

Not much different than a Thai person saying the same about a German rotting in their jail because he offended their king on Twitter. "Justice!"

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

#185

Question is who has the control over BTC-e's crypto? Will they be returned to users?

The will be auctioned since they were forfeiture by Feds, like this:

http://thehill.com/policy/technology/290745-feds-to-auction-...

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

#186

Earlier quoted context omitted.

So then TradeHill should be the ones arrested, surely?

TradeHill no longer exists, but I wouldn't want to be their ex-CEO. Their culpability depends on whether or not they knew the money being laundered was dirty, and whether or not their AML and KYC were good enough.

My point was just that TradeHill, being the US entity, is the one in the US jurisdiction and that a criminal doing business with them doesn’t magically fall under US jurisdiction. I’ve no problem with BTC-e or whoever getting arrested, since they were clearly criminals, but I am concerned about US laws becoming a thing that applies to non-US citizens outside of the US (the implication in the comment I replied to being (as I read it) that BTC-e falls under US jurisdiction because they were doing business with a US company, which in my opinion is overreach)

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

#187

Earlier quoted context omitted.

That might be totally true, but money laundering as a crime itself is just a cover for prosecutors inability to find the real crimes. It's about as morally defensible as asset seizures.

That seems pretty bogus. You're telling me that you think if I operate a front business and help human traffickers launder their money (thereby helping them to cover up their crime), but don't involve myself with human trafficking itself, I've done nothing wrong, and prosecuting me would be morally indefensible?

Yes. The crime in question is the human trafficking. Pursue and prosecute that.

If you go by the economic definitions of money, which generally include uniformity and fungibility, money laundering is really a whinge from law enforcement that police work is difficult, and can't they please go after someone who may be less dangerous and less guilty, but is much easier to catch?

You can't reasonably expect people to investigate the full history of all money they receive as payments. Merchants have the right to presume that their customers are innocent in the absence of blatantly obvious evidence to the contrary.

As they say, gold has no smell. A coin that was obtained by murdering its former owner cannot carry residual guilt from the crime. Once it is used to buy a sack of oranges at market price, it is indistinguishable from a coin that was mined and refined by devout monks, repeatedly donated to charity, sequentially blessed by all the religious figures at that bar where all the jokes happen when they walk into it, and then spent on a sack of grapefruits.

If you buy a house with 50% legit income, and 50% black market contraband profits, you don't seize half the house and claw the other half back from the previous owner. The proceeds of criminal activity attach to the criminal, not to the property. The money has no soul or conscience. It is innocent whenever the person who carries it is.

And money laundering is not a crime, in my opinion, because in order for it to be a crime, certain inaccurate assumptions about money have to be true--namely that money is not uniform and fungible. It artificially makes money from a marijuana dispensary business different from money from a pharmacy. Cash should be cash, agnostic of the sins of its bearer.

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

#188
post #10

Earlier quoted context omitted.

https://data.bitcoinity.org/markets/volume/30d?c=e&t=b BTC-e was still pretty big.

When they say that "Bitcoin Exchange Alleged to Have Received Deposits Valued at Over $4 Billion", does that really mean $4 Billion USD? How is that exchange value established?

As I remember, all exchange transactions on btc-e were public, so anyone could sum/verify the amount of money going through exchange. I've used btc-e actively in 2013, earning good money on trading BTC to USD and back during the period of rapid price growth.

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

#189
post #43

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…

In many countries, it is illegal for lawyers to charge a percentage of the obtained damages. But in the US, a lawyer can propose: "I'll help you suing this bastard for free if I get half of the awarded damages." This incentivizes US lawyers to be more confrontational and to seek higher damages than anywhere else. Edit, found this: "FinCEN today assessed a $110 million civil money penalty against BTC-e for willfully v…

> But in the US, a lawyer can propose: "I'll help you suing this bastard for free if I get half of the awarded damages." This incentivizes US lawyers to be more confrontational and to seek higher damages than anywhere else.

But it also gives poor people a chance to sue someone big, because their lawyer isnt asking for a fixed fee.

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

#190

Earlier quoted context omitted.

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.

OK, so to play the devil's advocate, let's take the example of btc-e. btc-e did do a lot of business with criminal enterprises, it appears, but they also had a lot of legitimate users. So how is that different from a restaurant deep in mob territory in some urban area that serves tons of mobsters dinner every evening? Should that restaurant be prosecuted? How about the corner grocery that serves the same mobsters? I…

So how is that different from a restaurant deep in mob territory in some urban area that serves tons of mobsters dinner every evening? Should that restaurant be prosecuted? How about the corner grocery that serves the same mobsters?

No, IMO it should not be prosecuted as long as they are only serving food and getting paid the normal way.

They might very well get in trouble if they for example

start offering the mobsters empty "takeaway food" for 1000 monies,

transfer 900 monies in payment for non-existent ingredients to a shell company run by mobsters.

Warning: IANAL. And I made this example to be simple and clear. I guess you could get in trouble for less than that.

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