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Feds arrest couple, seize $3.6B in hacked Bitcoin funds

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Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#291

Post by notch656a »

Firmwarrior wrote: post #257
xtracto wrote: post #219

Earlier quoted context omitted.

If you read the original DOJ filing, they actually did that. They used : > anonymity-enhanced virtual currency (AEC), in a practice known as “chain hopping”; and using U.S.-based business accounts to legitimize their banking activity. Their problem was that they "closed" the money circle by sending it to real bank accounts. That's how they caught their trace. It seems that laundering billions of dollars is not as eas…

Someone was saying they could have moved to South America and laundered $1000 at a time, but you'd think that the US government could've easily tracked that down as well.. "Hmm, it appears someone is living off this stolen 3 billion dollars in South America"

How would you trace $1000 to a larger source after it passes through a privacy coin? The only way to do that is either with some side channel information, or by monitoring the person selling the funds. In a cash economy in the third world the odds of that look pretty poor. I think what happened is large deposit in bank account caused some to start asking questions.

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#292

Post by kingcharles »

tiffanyh wrote: post #234
d23 wrote: post #223

Earlier quoted context omitted.

That's the standard for our criminal justice system, not for us as individuals. It sounds from the release that the justice department has a boatload of compelling evidence against them.

> "It sounds from the release that the justice department has a boatload of compelling evidence against them." You'd hope that before someone is arrested, the prosecutor has ample evidence to prove guilt. I don't understand your point. These individuals have not been proven guilty yet. Why are you editorializing their presumed guilt in this matter. Note: I have no affiliation with these individuals nor case.

Grand juries indict in >99% of cases. It's just a rubber-stamp. The grand jury only hears the prosecutor's side. They can say pretty much anything. Please find me a case where a prosecutor or LEO was charged with perjury for lying to a grand jury.

I've been indicted twice and both times the grand jury transcripts were just lies.

In fact, I got someone released after 16 months in jail on a burglary charge because their grand jury was lies. The story the cop told was a complete fabrication.

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#293

Post by acchow »

austincheney wrote: post #230
codespin wrote: post #216

Earlier quoted context omitted.

Interesting point, but if the government considered whoever had control of the coins the rightful owner and not stolen, would it be laundering then? It doesn't sound like a problem of taxes.

Laundering is any process to legitimize illicit income. It does not matter who owns the coins or other assets in question. What matters is if the coins represent any vehicle of fund transfer that originate from any form of criminal enterprise or other unreported financial activity.

So they could have reported the stolen coins it as income, paid taxes, and they'd be in the clear?

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#295

Post by JumpCrisscross »

What possesses someone who just stole billions to stay in New York while trying to launder their money? Staying and pretending it didn't happen, I get. Pulling a Marsalek, I get. But staying? While continuing to try and access that wealth?

Is it arrogance? Stupidity? Misplaced faith in the anonymity of crypto?

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#296

Post by PragmaticPulp »

fxtentacle wrote: post #4

Shouldn't all true crypto believers hate this news? It's the government trying to enforce their opinion of who should own those Bitcoins, thereby taking power away from the owner that the network has decided on, which would be "whoever has the cryptographic keys".

> It's the government trying to enforce their opinion of who should own those Bitcoins, thereby taking power away from the owner that the network has decided on, which would be "whoever has the cryptographic keys".

I really don't understand these arguments.

The law still applies whether or not you use cryptocurrency. Using cryptocurrency doesn't free someone from the consequences of their actions.

Illegal acts are still illegal acts.

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#297

Post by PragmaticPulp »

kelseyfrog wrote: post #62
fxtentacle wrote: post #4

Shouldn't all true crypto believers hate this news? It's the government trying to enforce their opinion of who should own those Bitcoins, thereby taking power away from the owner that the network has decided on, which would be "whoever has the cryptographic keys".

As a crypto unbeliever I hate this too. Legal enforcement legitimizes crypto as property. It expands the definition of property by institutionally conferring the status of "owned" to a functional configuration of bits distributed over thousands of computers. Do we have this concept for other things? yes. But I'd rather like to contract the space of property rather than expand it.

> It expands the definition of property by institutionally conferring the status of "owned" to a functional configuration of bits distributed over thousands of computers. Do we have this concept for other things?

Intellectual property has been a thing for a long, long time. You don't literally need to have a physical thing somewhere for laws to apply.

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#298

Post by mardifoufs »

AlexanderTheGr8 wrote: post #64

> “After the execution of court-authorized search warrants of online accounts controlled by Lichtenstein and Morgan, special agents obtained access to files within an online account controlled by Lichtenstein,” the press release said. “Those files contained the private keys required to access the digital wallet that directly received the funds stolen from Bitfinex, and allowed special agents to lawfully seize and rec…

You have to keep in mind that a lot of those highlighted "trivial" series of mistakes can be just the result of parallel construction, and what evidence really "did them in" can be completely different from what's stated by the prosecution. It is very easy to find tons of small mistakes once you already know what you have to look for thanks to an undisclosed huge exploit/honeypot/technically-illegal-seizures that you can use.

Proving this is hard by design, but a good example of that would be how they used the Hansa market as a honeypot by running the market themselves for months.

The entire investigation around Alphabay and how they got to the owner is a bit shady, too, and there have been tons of rumors of the entire official case being based on ad-hoc parallel construction.

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#299

Post by localhost »

pdog wrote: post #215

Ilya Lichtenstein (YC S11) is the co-founder of YC-backed MixRank. Heather Morgan, his wife, is apparently a serial entrepreneur, investor, and "contributor" to Forbes.

She's also a rapper, and not a very good one: https://www.youtube.com/watch?v=_DIuPPmY9mw

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#300

Post by duxup »

caseysoftware wrote: post #151
duxup wrote: post #74

Earlier quoted context omitted.

I was wondering about this. I would think the most obvious path would be to find some other criminals (now you've got new risks) who don't care about the provenance of the coins, will pay cash for some coins at a discount, and you somehow launder that cash.... Could at least get a couple bucks from it, possibly.

Or weaponize the coins. Take 10 BTC and give them to 100 groups/people you don't like. Investigators make their lives miserable for a while. For normal people, that'd be ridiculously expensive but since they didn't pay for the coins and have 100k+ more they can't use, it's "free."

I feel like you'd just be making 100 enemies...

They could easily point and say "dude I don't know who that was, here's those coins FBI".

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