SEC Charges Texas Man With Running Bitcoin-Denominated Ponzi Scheme

Post by dobbsbob » Tue, Jul 23, 2013, 10:41 PM UTC

nullc wrote: post #44

dobbsbob wrote: post #16

Earlier quoted context omitted.

His "fund" was a mixing service. He was getting mined coins in and paying out probably with SR coins. Originally I'm pretty sure he was laundering for himself or somebody else, or ran his own mixing service like bitcoinfog then it became a ponzi and fell apart. He was also a chronic gambler with delusions of being a good poker player, a lot of coins prob went to gambling

This was one of several rumors he benefited from (and carefully, quietly encouraged). There doesn't appear to be any strong factual basis for it beyond speculation, but it sure helped people believe the insane rewards. It doesn't really make a ton of sense when you think about it: "Laundering" Bitcoin doesn't really do you a ton of good as you still end up with a bunch of inexplicable Bitcoin, and if you were launder…

Post by mindslight » Tue, Jul 23, 2013, 11:01 PM UTC

modeless wrote: post #51

mindslight wrote: post #32

This is yet another step on the path of Bitcoin exposing that it is not the operational-semantics/capability/irreversibility based cryptocurrency many people wishfully thought that it was. The POW-based solution to the Byzantine agreement problem was quite novel. It's unfortunate that this novelty was wasted on the same old title-based accounting rather than something more appropriate for a fungible commodity. A syst…

This is good news, all things considered. A digital currency truly out of reach of regulators would just be outlawed. Exchanges would be raided and shut down. If regulators feel comfortable with bitcoin, it can grow and thrive for now. Then, when someone invents a truly anonymous currency, call it A-coin, bitcoin will be a stepping stone to it. Here's how it could work: You will buy bitcoins at regulated, fully legal…

Post by modeless » Tue, Jul 23, 2013, 11:51 PM UTC

mindslight wrote: post #54

modeless wrote: post #51

Earlier quoted context omitted.

This is good news, all things considered. A digital currency truly out of reach of regulators would just be outlawed. Exchanges would be raided and shut down. If regulators feel comfortable with bitcoin, it can grow and thrive for now. Then, when someone invents a truly anonymous currency, call it A-coin, bitcoin will be a stepping stone to it. Here's how it could work: You will buy bitcoins at regulated, fully legal…

Except the exchanges will be heavily regulated and required to record your identity, and converting them to A-coins will be illegal. Even if enforcement is spotty, one can't take the process for granted and the common view will be that A-coins are for criminals. Primarily functioning as a temporary medium of exchange for identity-based systems means it's only a matter of time until the ambient authority infects the s…

Post by sirsar » Wed, Jul 24, 2013, 2:07 AM UTC

nrivadeneira wrote: post #50

biot wrote: post #9

It's just like what happened in EVE Online[0], only with real-world consequences instead of "that sucks, but player beware". [0]: http://www.tentonhammer.com/eve/news/eve-online-ponzi-scheme...

I think this is actually a really interesting parallel. They're both virtual currencies, but one carries actual legal risk and the other doesn't. The question is, are they really all that different?

Post by foobarbazqux » Wed, Jul 24, 2013, 7:15 PM UTC

foobarbazqux wrote: post #23

wmf wrote: post #21

Earlier quoted context omitted.

If you're some kind of anonymous money-laundering genius perhaps.

Smithers! Have that bozo start up the Tor reactor!