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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

#211

Earlier quoted context omitted.

> If hosting is enough to be considered present in the US, then the US cloud providers better get ready for some unpleasantly stiff competition. That has been the case for a really long time, hasn't it?

I'm surprised no one here as mentioned Kim Doctcom, who is still trying to fight his extradition from New Zealand. He's a German, who has never set foot in America, was illegally spied on by NZ (which is now retroactively legal thanks to former PM John Key's GCSB law) and for a charge that isn't a crime in NZ.

Kim Dotcom and The Pirate Bay are, essentially, extralegal cases. KD and TPB consistently frustrated interests that are powerful enough to get bureaucrats to supersede the legal system (as long as it's ambiguous and rare enough not to comprise a slam dunk against the bureaucrat). A bit of pressure and the problem gets solved one way or another.

Sweden only moved against TPB after the WTO threatened them with sanctions. It's likely that New Zealand caved in the belief that they'd face similar unpleasantness.

We must understand that underneath the fancy dressings and the formalities that we create to make ourselves feel important, humans are essentially the same; our psychologies are all dictated by the same biological processes. We must not kid ourselves about this. It is always dangerous to upset or frustrate powerful interests. If you taunt someone much more powerful than you, as TPB did, do not expect formalities like law to make a difference.

A lot of starry-eyed entrepreneurs go in thinking that everyone will be pleasant and sportsmanlike, and see their work as a friendly collaborative competition. This is not true! People will skirt and break every rule they can to win, because they see the competition as a matter of survival, not as a fun game.

The copyright cartel is out of control along every axis. Not only do they make use of an artificially-granted, market-destroying monopoly to stifle the creative speech of the public, but in multiple cases now, they've triggered an extralegal override of national sovereignty to persecute a little guy who was frustrating their oppressive business model in ways that were completely legal within his/her jurisdiction.

If our politicians want to get out under these peoples' thumbs, they need to seriously revise copyright law, and tell the fat cats that they're going to have to be productive to make money instead of milking royalties for 100+ years and sending the feds across the world to black bag entrepreneurs.

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

#212

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?

Ask your lawyer before committing too many international crimes.

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

#213

Earlier quoted context omitted.

Good point. I think it will take a fairly significant transition away from fiat currencies before that situation is eliminated... But one of the incentives of getting rid of cash is to transform the money into something that can be efficiently sent over a large distance, which is something cryptocurrencies already do.

> I think it will take a fairly significant transition away from fiat currencies before that situation is eliminated... Not really, so long as the IRS and taxes remain a thing. And someone notices the guy who hasn't had a job in the last five years is driving around in a brand new Tesla and living it up in a mansion.

Perhaps, but I think you assume a much greater level of enforcement than actually exists.

Most tax evasion enforcement is on relatively small subset of taxpayers and is for fairly easy-to-detect fudges. There has been a lot of work between the IRS and banks to set up heuristics and flag suspicious activity, but that all ends up pretty worthless with an anonymous cryptocurrency.

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

#214

Earlier quoted context omitted.

Can you explain this? If someone has a bundle of cash from illegally selling drugs, then they give it to their store front to "launder" as retail income, aren't they now paying tax they wouldn't otherwise pay?

When you earn your income, you pay a tax, and when you spend it, the business pays a tax. In money laundering, only the retail business pays the tax, so effectively its not the equivalent taxation.

Why would there be personal income tax on the criminal activity? Guy sells drugs but obviously can't record the profits as DrugCo's profits, so he records it as RetailCo's income. If DrugCo was legal, the taxes would be on that company instead. His personal income tax is unchanged: whatever he takes out of RetailCo is still taxed, and RetailCo pays whatever corp taxes are applicable.

The only difference is in the details of the corporate taxation. Selling meth legally might be taxed differently than laundromat services. So an ethical money launderer should look to use front businesses that have an equivalent tax rate and not take advantage of any special tax discounts that wouldn't apply to the original source.

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

#215

Earlier quoted context omitted.

> I think it will take a fairly significant transition away from fiat currencies before that situation is eliminated... Not really, so long as the IRS and taxes remain a thing. And someone notices the guy who hasn't had a job in the last five years is driving around in a brand new Tesla and living it up in a mansion.

Perhaps, but I think you assume a much greater level of enforcement than actually exists. Most tax evasion enforcement is on relatively small subset of taxpayers and is for fairly easy-to-detect fudges. There has been a lot of work between the IRS and banks to set up heuristics and flag suspicious activity, but that all ends up pretty worthless with an anonymous cryptocurrency.

You're assuming that in a world with only anonymous cryptocurrency there won't be banks and credit cards and the like. Keeping cryptocurrency saved on your personal hard drive with backups or something is equivalent to keeping your money under your mattress today. Banks provide you with interest on your savings and security.

I suspect in a world with only cryptocurrency instead of fiat, trying to make a direct peer-to-peer transaction to purchase an expensive item like a house or car will be met with the same reaction as trying to do that today with a duffel bag full of cash.

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

#216

Earlier quoted context omitted.

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 in…

You seem to be conflating multiple issues here. As far as I know, nobody considers it money laundering to unwittingly accept money from illegal activities as payment. But I don't buy the idea that if I knowingly set out to conceal the source of ill-gotten funds then I've done nothing wrong. I've colluded with criminals to abet their crime in that scenario.

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

#217

Earlier quoted context omitted.

It's not clear that you can really cast it as a successful effort to save lives either, given that it's plunged Libya into violent, sectarian civil war.

Would the humanitarian cost be less if NATO hadn't intervened? There was already a civil war in progress in Libya, after all. NATO didn't and hasn't gotten involved in Syria (with the exception of a limited air strike this year in response to the Syrian government's use of chemical weapons on civilians, a strike of limited strategic value) and the situation there is one of the worst humanitarian crises today. I think…

> Would the humanitarian cost be less if NATO hadn't intervened?

Yes, that is what I think.

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

#218
post #78

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.

This extraordinary claim is going to need some extraordinary evidence, re: Monero's fungibility.

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

#219

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…

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…

Open a bank in Cyprus, and that's it. Many people suspect that majority of Russian banks in Cyprus do not have a single real board member.

Believe me or not, in some countries it is possible to setup a bank without having a single in-person visit by an official.

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