Justice playing whac-a-mole
BTC-e and its founder charged in 21-count indictment over hack of Mt. Gox
61–70 of 256 posts
Re: BTC-e and its founder charged in 21-count indictment over hack of Mt. Gox
#62This illustrates how the DOJ is years behind when it comes to understanding cryptocurrency technology and markets.
It won't take long for one of the cryptocurrencies with private transactions to rise in dominance, since this sort of crackdown imposes costs and uncertainty on all participants.
If the goal of the DOJ was to fight crime, the most effective approach would have been simply to infiltrate mixers and trace money flows relevant to investigations, something BTC is perfect for.
Instead, this move sends a strong signal to the cryptocurrency community that hardening measures are needed.
For instance: http://zerocoin.org/
Re: BTC-e and its founder charged in 21-count indictment over hack of Mt. Gox
#63An interesting analysis of the evidence here:
Breaking open the MtGox case, part 1 http://blog.wizsec.jp/2017/07/breaking-open-mtgox-1.html
Re: BTC-e and its founder charged in 21-count indictment over hack of Mt. Gox
#64Earlier 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.
> that money came from sources in the US What I meant is I've been to a restaurant which turned out to be a money laundering front but I can't seriously describe myself as a victim. In fact, the food there was cheap and delicious! But I appreciate your clarification. To rephrase what you are saying: it falls under US jurisdiction because some US persons were victims of a crime and some of that crime money ended up be…
Yeah my favourite pharmacy just closed - pretty sure it was a money laundering op. Huge warehouse, fully staffed, inventory from pharmacy to electronics, hardware to perishable goods (but just random retail packages). In a couple years I've never seen more than 1 other car in the 50-space parking lot. Amazing service.
And of course there's no victims in money laundering. It's a victimless crime that has the sole purpose of helping prosecutors when they aren't able to find a real crime.
Re: BTC-e and its founder charged in 21-count indictment over hack of Mt. Gox
#65The 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…
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.
Re: BTC-e and its founder charged in 21-count indictment over hack of Mt. Gox
#66This illustrates how the DOJ is years behind when it comes to understanding cryptocurrency technology and markets. It won't take long for one of the cryptocurrencies with private transactions to rise in dominance, since this sort of crackdown imposes costs and uncertainty on all participants. If the goal of the DOJ was to fight crime, the most effective approach would have been simply to infiltrate mixers and trace m…
Pretty sure that won't matter. Monero will hinder blockchain analysis, but if you're wiring out millions they can just demand you prove the legitimacy. "I got untraceable coins" is on the level of excuse as "I got this sack full of cash".
So long they prevent people from cashing out big time, then they're on the same level as cash (see, needing to deposit boxes of cash with HSBC).
Re: BTC-e and its founder charged in 21-count indictment over hack of Mt. Gox
#67The 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…
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 they charged him with. Maybe that will come later after he's extradited and they have a chance to go through the evidence they no doubt collected when they arrested him.
On an unrelated note, it looks like the traceability of Bitcoin transactions played a major role in this. It turns out that Bitcoin is really not a great way to launder money, unless you want a record of your money laundering archived forever, redundantly, on a distributed system of computers around the world! I expect future crypto-locker viruses to switch to Monero instead of Bitcoin now that they can no longer cash out through BTC-e. Subsequently I expect to see Monero delisted from any exchange that follows KYC after some pressure from law enforcement.
Re: BTC-e and its founder charged in 21-count indictment over hack of Mt. Gox
#68This illustrates how the DOJ is years behind when it comes to understanding cryptocurrency technology and markets. It won't take long for one of the cryptocurrencies with private transactions to rise in dominance, since this sort of crackdown imposes costs and uncertainty on all participants. If the goal of the DOJ was to fight crime, the most effective approach would have been simply to infiltrate mixers and trace m…
Pretty sure that won't matter. Monero will hinder blockchain analysis, but if you're wiring out millions they can just demand you prove the legitimacy. "I got untraceable coins" is on the level of excuse as "I got this sack full of cash". So long they prevent people from cashing out big time, then they're on the same level as cash (see, needing to deposit boxes of cash with HSBC).
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.
Re: BTC-e and its founder charged in 21-count indictment over hack of Mt. Gox
#69The 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…
> 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.
Re: BTC-e and its founder charged in 21-count indictment over hack of Mt. Gox
#70Earlier 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.
Given that Greece is willing to extradite him and we haven't heard anything from the numerous countries where this guy has a business presence, I suppose most of the other countries involved are happy to have the USA deal with this guy.
Not every country has the resources to track down billions of dollars' worth of BTC transactions and use them to build a bulletproof case against a specific person. So if someone else offers to do it for free, why say no?