11 ms·

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 f

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 Russia? Or Australia? I'm sure BTC-e had customers from all over the world (and money laundry is pretty much a crime everywhere). So, when does it become "you have broken the US law and you are under arrest"?. Does it work the other way around too? 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"?

RandVal30142 9y ago
> 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.
- toomuchtodo 9y ago
  People often don't realize that if you fly through US airspace after violating certain US laws as non-citizens, you will be apprehended through an emergency layover coordinated with the carrier. That's a contributor to why US federal three letter agencies constantly ingest passenger manifests.
  - khuey 9y ago
    Like this guy http://www.cbc.ca/news/canada/montreal/man-removed-from-aeromexico-flight-id-d-1.904877 http://www.cbc.ca/news/canada/montreal/man-removed-from-aero...
    - dumbneurologist 9y ago
      what ever happened to him? the news with his name stops the day he was arrested.
      - throwawayjava 9y ago
        > the news with his name stops the day he was arrested. That's usually a good sign that nothing exciting happened; business as usual. He was arrested in early June and by early July was on parole with family in Seattle: http://databank.isranet.org/article.asp?article=64465 http://databank.isranet.org/article.asp?article=64465 After which terror charges were never filed and the gov't began seeking deportation on extraordinarily pedestrian grounds, with his lawyer speaking publicly about the case: http://www.kolkenandkolken.com/index.php?src=news&srctype=detail&category=Immigration%20Case%20Successes&refno=3268 http://www.kolkenandkolken.com/index.php?src=news&srctype=de... Can't find anything after that, but he's not listed in the USCIS's Online Detainee Locator System and AFAIK could not have been legally deported to Somalia. WikiLeaks documents on him, combined with other sources, paint a picture that he's either a) a somewhat prolific terrorist/human trafficker; or b) a politically active Muslim immigrant in the USA who might be kinda sorta guilty of some clerical crimes and may've acted a teensy bit dodgy when returning to the USA. (b) is probably way more likely given that DHS was apparently OK releasing him on parole.
- sigmar 9y ago
  Countries charge foreign nationals of crimes all the time. The fact that this is surprising to many people in these comments is horrifying.
  - frozenport 9y ago
    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.
    - kijin 9y ago
      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?
    - wbl 9y ago
      He conducted transactions with US persons as part of the illegal conduct. That's a sufficient nexus.
    - PeterisP 9y ago
      Ah, but the fact that there are a handful of other countries doesn't change anything - he can be prosecuted in all and each of these countries for various parts of that scheme. USA prosecuting him doesn't mean that other countries can't, it simply means that USA was a bit quicker to do so. For example, it's technically possible that he's acquitted in USA for the AML part, but immediately after that gets extradited to Japan for some charges regarding the MtGox hack.
- smitherfield 9y ago
  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.
  - RandVal30142 9y ago
    >despite being downvoted Ain't no thang but a chicken wang. I have a few deep biases against the Russian govt for reasons I won't delve into here. Despite this I believe in extradition laws as a tool of enforcement beyond borders and a means of political outreach/goodwill building. If Russia made unreasonable demands then we would be right to turn them down. If they need assistance with something truly heinous and actionable then it feels like our duty to act upon it. These international interactions are just as important as education & commerce to building lasting diplomatic relations.
- stepik777 9y ago
  Russia mostly prefers to block websites instead of prosecuting their creators. E.g. btc-e.com (but not btc-e.nz) was blocked in Russia but they didn't care about its owners.
ajross 9y ago
The "why" is just "because the DoJ made a case before Europe or Japan". The "how" is just extradition. Greece was willing to extradite him to the US to face these charges. The US would do the same with Greece, though not with Russia as we lack an extradition treaty with Russia (and probably not to face a charge that would be a clear first amendment violation anyway).
- olalonde 9y ago
  I don't mean to be argumentative but surely no [BTC-e] US customer was a "victim" of any money laundering that may have been going on? Edit: Since my question wasn't clear, the emphasis was on customer, as in: "customers of a business that also engages in money laundering aren't usually considered victims of that money laundering."
  - ajross 9y ago
    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.
    - mirimir 9y ago
      > It's criminal to be evading disclosure and tracking requirements even if all the money was obtained legally. It was criminal to help fuel a nuclear arms race that put everyone at risk of nuclear holocaust. It was criminal to destroy Iraq for bullshit reasons. It's criminal to kill people with drones based on metadata. But criminalizing money laundering? That's just power tripping.
      - reitanqild 9y ago
        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.
tgarma1234 9y ago
I mean seriously. These ponzi schemes all involve american buys propping up the money and it is an absolute miracle that the US government is willing to invest time and money in creating a system of justice that at the very minimum punishes clear breaches of trust in this system. The only alternative is that any money invested in this technology at all is wasted on Russian fraudsters. I mean honestly is everything just pure bullshit in this world or what?
usaphp 9y ago
> Russian gay laws What are those?
- openmosix 9y ago
  https://en.wikipedia.org/wiki/LGBT_rights_in_Russia#Propaganda_bans https://en.wikipedia.org/wiki/LGBT_rights_in_Russia#Propagan...
Hermel 9y ago
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 violating U.S. anti-money laundering (AML) laws. Alexander Vinnik was assessed $12 million for his role in the violations." In the US, government agencies can keep such fines for themselves, providing them with a nice incentive to go after such cases.
- bb611 9y ago
  It's not clear what exactly the outcome is in this case, but in many civil cases the US Treasury uses the penalties to repay the original injured parties. It generally doesn't cover all their losses.
- splintercell 9y ago
  > 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.
  - greenshackle2 9y ago
    Yes. My friend is a Canadian lawyer who does class action lawsuits. When it's a big corp screwing over thousands or millions of customers, usually none of the customers can afford or are willing to front the money to fight Big Corp in court. So they take a cut of the winnings instead. (There are special loans and insurance they can get for this sort of thing.)
jcranmer 9y ago
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 the FIFA corruption scandal was brought, not by any EU courts, but by the US federal prosecutors. In these sort of situations, the main thing that tends to apply is not the ability to get a judgement in court but the ability to get that judgement enforced. So if, say, Fiji were to make up a law and convict, say, Donald Trump under it, no one would care--Fiji would have no practical way to enforce that judgement. But the US can generally get its judgements enforced, even outside the US. In the specific case of the financial world, the size and importance of the US financial markets gives the US unparalleled power to enforce judgements. The US could not only lock you out of dealing with USD transactions directly, they could also direct banks that do business in the US to not do business with you.
- khuey 9y ago
  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.
  - sitharus 9y ago
    Traditionally an extradition treaty would require the crimes to have occurred on US soil. We’re slowly figuring out how this applies to the digital age.
    - khuey 9y ago
      The charges in the indictment are for illicit transactions with TradeHill which was based in the US.
modeless 9y ago
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.
- khuey 9y ago
  Yes, the blockchain is a fantastic resource for Feds prosecuting financial crimes. In order to get away with these things you need to have flawless opsec, because the moment they can connect one thing to you everything quickly unravels.
  - vocatus_gate 9y ago
    For me it's now Monero or nothing.
    - mahyarm 9y ago
      I would treat Monero & Zcash as the beta software it is. I wouldn't rely on it for anything for years.
      - Taek 9y ago
        Yeah new research is coming out frequently enough that reveals new and previously unknown weaknesses and patterns in the mixing strategies. The teams do a good job of responding quickly to address new issues, but previous trades that leaked information can't be fixed. The information is out there forever. If you are trying to stay out of jail, I'd consider Monero a good mid-term strategy. Anything else (including Zcash) of probably not even that great in the short term. (So few people use the anonymous part of Zcash that you have a terrible anonymity set). Dash, pivx , etcetera are just plain insecure.
umanwizard 9y ago
Russia "can" do whatever it wants to you while you're in its territory, because it's a sovereign state. Any "international law" that would stop this is toothless.
juandazapata 9y ago
He used the US banking system to launder money. That's exactly the same reason why European FIFA executives and Brazilian Odebretch executives were arrested as well.
csomar 9y ago
The US has this "thinking" that the world is just their backyard. It is not really in the law, strictly speaking. But if you have been watching the news, they strongly interfere with countries for their own (or their politicians) benefit. For example, they hit Libya with missiles right when Al-Gaddafi sent troupes to defend from future-ISIS militants. So yes, the US will get involved in stuff that matters to it. > The question for me is: why US? Because if you know the US is coming and dropping bombs, who the hell wants to fight it? Even Russia is abstaining hard to prevent the nuclear war possibility though the US have been doing all it can to start it.
- hectorr1 9y ago
  You're not wrong, but also dismiss some tough moral choices. I'd argue that attacking Libya was against U.S. strategic interests. Since 9/11 Gaddafi had substantially improved relations with the west. He gave up his nuclear program and was basically acting as Europe's bouncer. Since he fell the migrant crisis has exploded. North Korea and Iran learned that despite all promises otherwise, the only way to ensure regime survival is nukes. So why did the U.S. intervene? Gaddafi was going to ruthlessly slaughter everyone in Benghazi. He said so, and had the tanks to do it rolling across the desert. It turns out that the U.S. military is really good at killing tanks in the desert (esp in a low air defense threat environment), so the White House and DoD knew that they would have blood on their hands if they stood by and watched. Also, unlike Syria, Gaddafi had no strategic allies to complicate things. That is, other than us. And now we get to suffer the long term consequences of preventing that genocide by stabbing a new friend in the back. We saved lives in Benghazi and toppled a ruthless dictator. We also fueled the rise of ISIS, and helped pave the way for nuclear confrontations in Korea and the Middle East.
  - emodendroket 9y ago
    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.
    - openasocket 9y ago
stillhere 9y ago
They even put government agents from other countries on their most wanted websites: https://www.fbi.gov/wanted/cyber/igor-anatolyevich-sushchin https://www.fbi.gov/wanted/cyber/igor-anatolyevich-sushchin I'd like to see them try to extradite this guy. LOL!
bradleyjg 9y ago
I can get the "there were US customers" - but why not Europe? Or Japan? Or Russia? Or Australia? I'm sure BTC-e had customers from all over the world (and money laundry is pretty much a crime everywhere). So, when does it become "you have broken the US law and you are under arrest"?. Does it work the other way around too? 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"? The best way to think about this is in terms of the laws of the country you are in. We might be a outraged that Otto Warmbier was treated so harshly (killed really) by North Korea for allegedly stealing a propaganda poster, but at the end of the day we understand that he went to North Korea and in North Korea, North Korean laws apply. The next step is to ask about actions that took place outside the country you are in but are illegal under that countries laws. So if, for example, Seth Rogen who famously made a movie making fun of Kim Jung-Un were to travel to North Korea we would not at all be surprised if we were arrested and sentenced to a very harsh punishment. Finally, consider that extradition laws are just like any other domestic laws. The treaty between Greece and the United States means that for the purpose of a lot of criminal laws, physically entering Greece is the same as physically entering the United States. In this case it was ultimately Greece that decided that what Vinnik did was sufficient to take away his freedom. He subjected himself Greece's judgment by going to Greece. If he had stayed in Russia he probably would not have been extradited. Going to another country is something many of us take lightly, but it can be a really big deal.
onestone 9y ago
Why is it always assumed that the "company" was based in Bulgaria? Which "company" is it? As a Bulgarian myself I've seen that mentioned several times in the past, even on reputable sites, but never seen any actual evidence. P.S. An investigation from 2 days ago also fails to find any Bulgarian connection to BTC-e: https://bivol.bg/en/no-bulgarian-connection-found-so-far-in-us-indicted-bitcoin-exchange-btc-e.html https://bivol.bg/en/no-bulgarian-connection-found-so-far-in-...

RandVal30142 9y ago

> 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.

toomuchtodo 9y ago
People often don't realize that if you fly through US airspace after violating certain US laws as non-citizens, you will be apprehended through an emergency layover coordinated with the carrier. That's a contributor to why US federal three letter agencies constantly ingest passenger manifests.
- khuey 9y ago
  Like this guy http://www.cbc.ca/news/canada/montreal/man-removed-from-aeromexico-flight-id-d-1.904877 http://www.cbc.ca/news/canada/montreal/man-removed-from-aero...
  - dumbneurologist 9y ago
    what ever happened to him? the news with his name stops the day he was arrested.
    - throwawayjava 9y ago
      > the news with his name stops the day he was arrested. That's usually a good sign that nothing exciting happened; business as usual. He was arrested in early June and by early July was on parole with family in Seattle: http://databank.isranet.org/article.asp?article=64465 http://databank.isranet.org/article.asp?article=64465 After which terror charges were never filed and the gov't began seeking deportation on extraordinarily pedestrian grounds, with his lawyer speaking publicly about the case: http://www.kolkenandkolken.com/index.php?src=news&srctype=detail&category=Immigration%20Case%20Successes&refno=3268 http://www.kolkenandkolken.com/index.php?src=news&srctype=de... Can't find anything after that, but he's not listed in the USCIS's Online Detainee Locator System and AFAIK could not have been legally deported to Somalia. WikiLeaks documents on him, combined with other sources, paint a picture that he's either a) a somewhat prolific terrorist/human trafficker; or b) a politically active Muslim immigrant in the USA who might be kinda sorta guilty of some clerical crimes and may've acted a teensy bit dodgy when returning to the USA. (b) is probably way more likely given that DHS was apparently OK releasing him on parole.
sigmar 9y ago
Countries charge foreign nationals of crimes all the time. The fact that this is surprising to many people in these comments is horrifying.
- frozenport 9y ago
  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.
  - kijin 9y ago
    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?
  - wbl 9y ago
    He conducted transactions with US persons as part of the illegal conduct. That's a sufficient nexus.
  - PeterisP 9y ago
    Ah, but the fact that there are a handful of other countries doesn't change anything - he can be prosecuted in all and each of these countries for various parts of that scheme. USA prosecuting him doesn't mean that other countries can't, it simply means that USA was a bit quicker to do so. For example, it's technically possible that he's acquitted in USA for the AML part, but immediately after that gets extradited to Japan for some charges regarding the MtGox hack.
smitherfield 9y ago
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.
- RandVal30142 9y ago
  >despite being downvoted Ain't no thang but a chicken wang. I have a few deep biases against the Russian govt for reasons I won't delve into here. Despite this I believe in extradition laws as a tool of enforcement beyond borders and a means of political outreach/goodwill building. If Russia made unreasonable demands then we would be right to turn them down. If they need assistance with something truly heinous and actionable then it feels like our duty to act upon it. These international interactions are just as important as education & commerce to building lasting diplomatic relations.
stepik777 9y ago
Russia mostly prefers to block websites instead of prosecuting their creators. E.g. btc-e.com (but not btc-e.nz) was blocked in Russia but they didn't care about its owners.

ajross 9y ago

The "why" is just "because the DoJ made a case before Europe or Japan". The "how" is just extradition. Greece was willing to extradite him to the US to face these charges. The US would do the same with Greece, though not with Russia as we lack an extradition treaty with Russia (and probably not to face a charge that would be a clear first amendment violation anyway).

olalonde 9y ago
I don't mean to be argumentative but surely no [BTC-e] US customer was a "victim" of any money laundering that may have been going on? Edit: Since my question wasn't clear, the emphasis was on customer, as in: "customers of a business that also engages in money laundering aren't usually considered victims of that money laundering."
- ajross 9y ago
  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.
  - mirimir 9y ago
    > It's criminal to be evading disclosure and tracking requirements even if all the money was obtained legally. It was criminal to help fuel a nuclear arms race that put everyone at risk of nuclear holocaust. It was criminal to destroy Iraq for bullshit reasons. It's criminal to kill people with drones based on metadata. But criminalizing money laundering? That's just power tripping.
    - reitanqild 9y ago
      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.

tgarma1234 9y ago

I mean seriously. These ponzi schemes all involve american buys propping up the money and it is an absolute miracle that the US government is willing to invest time and money in creating a system of justice that at the very minimum punishes clear breaches of trust in this system. The only alternative is that any money invested in this technology at all is wasted on Russian fraudsters. I mean honestly is everything just pure bullshit in this world or what?

usaphp 9y ago

> Russian gay laws What are those?

openmosix 9y ago
https://en.wikipedia.org/wiki/LGBT_rights_in_Russia#Propaganda_bans https://en.wikipedia.org/wiki/LGBT_rights_in_Russia#Propagan...

Hermel 9y ago

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 violating U.S. anti-money laundering (AML) laws. Alexander Vinnik was assessed $12 million for his role in the violations." In the US, government agencies can keep such fines for themselves, providing them with a nice incentive to go after such cases.

bb611 9y ago
It's not clear what exactly the outcome is in this case, but in many civil cases the US Treasury uses the penalties to repay the original injured parties. It generally doesn't cover all their losses.
splintercell 9y ago
> 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.
- greenshackle2 9y ago
  Yes. My friend is a Canadian lawyer who does class action lawsuits. When it's a big corp screwing over thousands or millions of customers, usually none of the customers can afford or are willing to front the money to fight Big Corp in court. So they take a cut of the winnings instead. (There are special loans and insurance they can get for this sort of thing.)

jcranmer 9y ago

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 the FIFA corruption scandal was brought, not by any EU courts, but by the US federal prosecutors. In these sort of situations, the main thing that tends to apply is not the ability to get a judgement in court but the ability to get that judgement enforced. So if, say, Fiji were to make up a law and convict, say, Donald Trump under it, no one would care--Fiji would have no practical way to enforce that judgement. But the US can generally get its judgements enforced, even outside the US. In the specific case of the financial world, the size and importance of the US financial markets gives the US unparalleled power to enforce judgements. The US could not only lock you out of dealing with USD transactions directly, they could also direct banks that do business in the US to not do business with you.

khuey 9y ago
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.
- sitharus 9y ago
  Traditionally an extradition treaty would require the crimes to have occurred on US soil. We’re slowly figuring out how this applies to the digital age.
  - khuey 9y ago
    The charges in the indictment are for illicit transactions with TradeHill which was based in the US.

modeless 9y ago

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.

khuey 9y ago
Yes, the blockchain is a fantastic resource for Feds prosecuting financial crimes. In order to get away with these things you need to have flawless opsec, because the moment they can connect one thing to you everything quickly unravels.
- vocatus_gate 9y ago
  For me it's now Monero or nothing.
  - mahyarm 9y ago
    I would treat Monero & Zcash as the beta software it is. I wouldn't rely on it for anything for years.
    - Taek 9y ago
      Yeah new research is coming out frequently enough that reveals new and previously unknown weaknesses and patterns in the mixing strategies. The teams do a good job of responding quickly to address new issues, but previous trades that leaked information can't be fixed. The information is out there forever. If you are trying to stay out of jail, I'd consider Monero a good mid-term strategy. Anything else (including Zcash) of probably not even that great in the short term. (So few people use the anonymous part of Zcash that you have a terrible anonymity set). Dash, pivx , etcetera are just plain insecure.

umanwizard 9y ago

Russia "can" do whatever it wants to you while you're in its territory, because it's a sovereign state. Any "international law" that would stop this is toothless.

juandazapata 9y ago

He used the US banking system to launder money. That's exactly the same reason why European FIFA executives and Brazilian Odebretch executives were arrested as well.

csomar 9y ago

The US has this "thinking" that the world is just their backyard. It is not really in the law, strictly speaking. But if you have been watching the news, they strongly interfere with countries for their own (or their politicians) benefit. For example, they hit Libya with missiles right when Al-Gaddafi sent troupes to defend from future-ISIS militants. So yes, the US will get involved in stuff that matters to it. > The question for me is: why US? Because if you know the US is coming and dropping bombs, who the hell wants to fight it? Even Russia is abstaining hard to prevent the nuclear war possibility though the US have been doing all it can to start it.

hectorr1 9y ago
You're not wrong, but also dismiss some tough moral choices. I'd argue that attacking Libya was against U.S. strategic interests. Since 9/11 Gaddafi had substantially improved relations with the west. He gave up his nuclear program and was basically acting as Europe's bouncer. Since he fell the migrant crisis has exploded. North Korea and Iran learned that despite all promises otherwise, the only way to ensure regime survival is nukes. So why did the U.S. intervene? Gaddafi was going to ruthlessly slaughter everyone in Benghazi. He said so, and had the tanks to do it rolling across the desert. It turns out that the U.S. military is really good at killing tanks in the desert (esp in a low air defense threat environment), so the White House and DoD knew that they would have blood on their hands if they stood by and watched. Also, unlike Syria, Gaddafi had no strategic allies to complicate things. That is, other than us. And now we get to suffer the long term consequences of preventing that genocide by stabbing a new friend in the back. We saved lives in Benghazi and toppled a ruthless dictator. We also fueled the rise of ISIS, and helped pave the way for nuclear confrontations in Korea and the Middle East.
- emodendroket 9y ago
  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.
  - openasocket 9y ago

stillhere 9y ago

They even put government agents from other countries on their most wanted websites: https://www.fbi.gov/wanted/cyber/igor-anatolyevich-sushchin https://www.fbi.gov/wanted/cyber/igor-anatolyevich-sushchin I'd like to see them try to extradite this guy. LOL!

bradleyjg 9y ago

I can get the "there were US customers" - but why not Europe? Or Japan? Or Russia? Or Australia? I'm sure BTC-e had customers from all over the world (and money laundry is pretty much a crime everywhere). So, when does it become "you have broken the US law and you are under arrest"?. Does it work the other way around too? 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"? The best way to think about this is in terms of the laws of the country you are in. We might be a outraged that Otto Warmbier was treated so harshly (killed really) by North Korea for allegedly stealing a propaganda poster, but at the end of the day we understand that he went to North Korea and in North Korea, North Korean laws apply. The next step is to ask about actions that took place outside the country you are in but are illegal under that countries laws. So if, for example, Seth Rogen who famously made a movie making fun of Kim Jung-Un were to travel to North Korea we would not at all be surprised if we were arrested and sentenced to a very harsh punishment. Finally, consider that extradition laws are just like any other domestic laws. The treaty between Greece and the United States means that for the purpose of a lot of criminal laws, physically entering Greece is the same as physically entering the United States. In this case it was ultimately Greece that decided that what Vinnik did was sufficient to take away his freedom. He subjected himself Greece's judgment by going to Greece. If he had stayed in Russia he probably would not have been extradited. Going to another country is something many of us take lightly, but it can be a really big deal.

onestone 9y ago

Why is it always assumed that the "company" was based in Bulgaria? Which "company" is it? As a Bulgarian myself I've seen that mentioned several times in the past, even on reputable sites, but never seen any actual evidence. P.S. An investigation from 2 days ago also fails to find any Bulgarian connection to BTC-e: https://bivol.bg/en/no-bulgarian-connection-found-so-far-in-us-indicted-bitcoin-exchange-btc-e.html https://bivol.bg/en/no-bulgarian-connection-found-so-far-in-...