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Why the feds took down one of Bitcoin’s largest exchanges
- ryanlol 9y ago“Anybody who thought about this for a second understood that law enforcement was working on a case against BTC-e,” said Jerry Brito, executive director of Coin Center. “The question was just whether the government would catch them.”
- rothbardrand 9y agoJerry's a great guy and Coin Center is the EFF of crypto. Everyone should send them some coins.
- firethief 9y agoAnother speakeasy bites the dust; the Wild West is ending.
- ryanlol 9y agoQuite possible that that's the joke here, but people have been saying this since the Wild West was actually ending.
- erikpukinskis 9y agoWhat happens when someone builds an autonomous Bitcoin exchange on Ethereum?
- jeremyt 9y agoDecentralized exchanges are already in the works.
- explodingcamera 9y agoThere are plenty of already working one
- gruez 9y agotoo bad they're more decentralized marketplaces than decentralized exchanges.
- jstanley 9y agohttps://bisq.io/ https://bisq.io/ is a decentralised exchange.
- gruez 9y agosorry i didn't clarify in my first post but by "exchange", i mean a place where there is 1 orderbook that every participant uses and transactions are done automatically, rather than some ad-hoc system where participants transact between each other. exchanges: gdax, bitstamp, nyse marketplaces: localbitcoins, bitcointalk, otc markets bitsquare is closer to localbitcoins than bitstamp.
- StavrosK 9y agoHow are you going to do transactions automatically when you can't send your money to one place? Whose bank account will your USD end up in so you can get some balance in this system?
- steveeq1 9y agoEtherdelta already works: https://etherdelta.github.io/ https://etherdelta.github.io/
- honestlyreally 9y agoWhich sadly doesn't get enough love. It's going to take Gox 2.0 before people realise its true value.
- StavrosK 9y agoIt's really slow to load for me, but can you buy BTC with USD from it, for example? Otherwise it's not really solving the hard part of the problem...
- free2rhyme214 9y agoEven better, the 0x protocol.
- pmorici 9y agoIt still has to interact with the banking system at some point unless all your pairs are only cryptos.
- maxerickson 9y agoI though we all agreed to call them cybers?
- ineedasername 9y agoThis is what I never understood about bitcoins's reputation, especially earlier on, about its supposed anonymity. I suppose that's much less the case now. But it always seemed odd that people considered it at all anonymous when the blockchain kept a record of everything. Sure it might not be immediately identifiable with a specific individual, but unless it was a wholly closed system, entry & exit points would always be clear, along with all the hops from wallet to wallet along the way. And the longer the system exists, the more information will accumulate that would allow anyone with an interest in doing so to correlate blockchain transactions to "real-world" people & systems. I'm sure I'm missing something though, since I'm by no means a cryptologist, or more than an interested spectator on crypto-coins. (I mined about 0.1 bc back when it was still possible to do that in a week or so on a mid-range AMD GPU. and, shocked at the rise in value, cashed it in for about $200 a few years ago.)
- TylerE 9y agoAnonymous != Untraceable. Anonymous means, well, anonymous.
- ineedasername 9y agoNice, succinct, seems the essence of the misconception. Thanks :D
- Dylan16807 9y agoNot really. The transactions are very far from anonymous. You don't have to attach your real name, which makes it pseudonymous. Cash is actually anonymous (assuming no serial number tracking).
- stale2002 9y agoThe technology is getting better and better. These days there are things like mixers that make it extremely difficult to track. There are even crytocurrencies where mixing is built in and every transaction effectively goes through a mixer.
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- ithought 9y agoThe charges seem exaggerated. If he's responsible or directly involved in the Mt. Gox theft, then they should prosecute him for that. The referencing of Internet usernames as evidence of crimes indicates they have a weak case or they're using it as public relations campaign against bitcoin. The price of Litecoin was usually higher on btc-e I think solely because people would deposit btc and buy ltc as a way to hide the source of their coins. It was widely considered shady but trustworthy by its longevity.
- eadz 9y agoThese domain name seizures from non US-resident entities keep coming. But more worryingly, "The language in the indictment about BTC-e’s “criminal design” mimics the indictment against Liberty Reserve". This also mimics the Kim DotCom / MegaUpload take down, along with a likely "FBI" operation in a foreign country. It seems there is now a policy of taking down things that are "criminal in design" - waiting for the next raid on "criminal in design" encryption software...
- hexc0de 9y agoLike Telegram Messenger
- spacemanmatt 9y agoOr Signal
- blubb-fish 9y agoespecially signal!
- mirimir 9y agoIt's more like a turf war between gangs. The US is just the world's meanest bastard, and isn't reticent about using its power.
- chx 9y ago> There are many legitimate uses of Bitcoin What are those. I have claimed here and will repeatedly do so -- there are none. I mean, sure, there are a few companies which integrate the sell-your-bitcoins-buy-our-product in one go but the volume of that is near irrelevant. And no, international transfers do not count as a usage because not only the sender needs to buy bitcoins the seller needs to sell them too...
- andrepd 9y agoYou mean, what are legitimate uses for decentralized internet cash? Besides everything that physical cash is good for, plus many more uses made possible because you can send money without exchanging physical tokens? Come on...
- honestlyreally 9y agoVery bizarre to state the obvious use cases, then nullify it with handwaving. The current cost to move $10m of bitcoin across international borders is about $1. Attempt the same via conventional means and you'll quickly realise it's benefits go beyond monetary efficiency. As for current working use cases Factom[0] stores an auditable timestamped data trail in a merkle tree structure, which is then anchored into the bitcoin blockchain. This is a tech minded site, I would hope people here understand the value of immutability. Real immutability, data that can't be altered or undone in anyway. Many seem upset at bitcoins meteoric rise and the rampant speculation for good reason, but make no mistake blockchains will be around long after we are gone. [0] www.factom.org
- tyingq 9y agoDid they get http://btc-e.nz http://btc-e.nz also?
- FRex 9y ago>Money laundering is the process of transforming the profits of crime and corruption into ostensibly "legitimate" assets. >A cryptocurrency tumbler is a service offered to mix potentially identifiable or 'tainted' cryptocurrency funds with others, with the intention of confusing the trail back to the fund's original source. English might not be my native language but I can see lots of parallels. I never actually considered this before but a mixer is the physical world would be getting mailed (by anonymous parties) 10 bags of money, 9 legitimate ones and one known to be from mafia and with sequential bill numbers known to feds and then repacking and mixing up the banknotes and receiving 10 visitors, each of whom gets one bag from you. You just laundered the money, sort of... it gets screwy (that's a very technical term ;) although does it really? From 9 legitimate bags you made 10 (functionally) legitimate ones. You can't trace the mafia guy after your mixing, you can't pick a guy with a bag at random and say he is the mafia perp, you can't say each of these guys now has 10% of illegitimate money in his bag because they can't be responsible (and don't even know) about actions of other people who mailed you money. An entire money bag just got laundered (by the definition above, it was crime proceeds and is now ostensibly legitimate because it can't be distinguished).
- SAI_Peregrinus 9y agoOne minor difference with Bitcoin is that there are no serial numbers. Every bitcoin is identical to every other bitcoin. The blockchain tracks transaction source, destination, and amount, but there's no way to identify a specific bitcoin. Such a concept is actually meaningless, there are no bitcoins, just transactions. This means that when a mixer or exchange wallet gets the bitcoins they can't be individually tracked anymore. This doesn't really matter in practice since all transactions are public.
- FRex 9y agoThe bag analogy still works if you remove serial numbers and just say that one of the bags was known to have came from mafia. You still can't identify which of the end receivers was the mafia and the effect is still a 'cleaning' process: dirty and clean go in, only clean (as in clean or dirty but not provably distinguishable from clean) comes out.
- microsage 9y ago> The language in the indictment about BTC-e’s “criminal design” mimics the indictment against Liberty Reserve — an anonymous currency service taken down by law enforcement in 2013 — which also accused the online exchange of having a “criminal design” and a system “designed so that criminals could effect financial transactions under multiple layers of anonymity.” Basing the indictment on the intent of the design - something hard to prove or reason about objectively - seems like a very slippery slope. Couldn't a similar statement be made about almost any system that protects user privacy? Or maybe they're referring to specific legal requirements not being conformed to rather than a general "criminal design"?
- 21 9y agoThere is no such thing as privacy from the state when dealing with money. I don't know your salary and income, you don't know mine, but the state wants to know this for everybody. This is the law of the land pretty much anywhere, and any large scale operations which try hiding this from the state (not from you and me) will be in trouble. So if you don't do the KYC/AML thing, that can be called "criminal by design" since KYC/AML is kind of universal in the western world (including Bulgaria/Cyprus/BVI)
- rothbardrand 9y agoThe money laundering statutes are so broad that you are a felon under them if you take money out of your savings and put it in your checking in order to make your credit card payment one month. Even if all three are at the same bank and none of the money is the result of a criminal activity.
- dboreham 9y agoCitation?
- thephyber 9y agoI highly doubt that scenario exists without some other incriminating action, behavior, or police observation. Civil Asset Forfeiture is an attack on private property and the legal principle of "innocent until proven guilty", but there has to be _some_ suspicion of a crime (usually alleged drug paraphernalia) or simple corruption on the part of the police and/or judges. There is a money-laundering-related charge, IIRC called "structuring", in which the reporting threshold of $10k/day/person is intentionally avoided (eg. by $9,999 transactions on consecutive days). This isn't usually charged "out of the blue". In the recent Hastert structuring case[1], he told a bank employee that he was avoiding the reporting threshold even though his money transfers weren't actually money laundering after profiting from a crime. There is a lot that I disdain about money laundering laws and civil asset forfeiture, but I'm not inclined to believe that "rothbard-rand" (the surnames of two famous Libertarians) has no dogs in this fight, so to speak. [1] https://en.wikipedia.org/wiki/Dennis_Hastert#Indictment https://en.wikipedia.org/wiki/Dennis_Hastert#Indictment
- mikulas_florek 9y agoWhat about ordinary people who had money/bitcoins/other cryptocurrency on btc-e? What will happen with money in btc-e's wallets?
- tyingq 9y agoIt sounds like the US just got control of the domain, not the server(s). Some reports that their other domain may still be up (btc-e.nz), but it just hangs for me.
- mikulas_florek 9y agoOf course they have no way to get btc-e's bitcoins, unless Vinnik tells them the private key, which I bet he will. So it's basically US stealing from people, yet again.
- zeep 9y agoWould their IP still work then?
- tyingq 9y agoThey used to be hosted at cloudflare. So, you could put "104.23.131.83 btc-e.com" in your /etc/hosts file and try it. I did that, but cloudflare times out.
- beautifulfreak 9y agoI wonder if the Mt Gox parties et al who were robbed will be refunded their bitcoin, since there is a ledger, or if the government will just keep everything. How could a refund be accomplished anyway? Would one need proof of owning a wallet that was emptied?
- necessity 9y agoAside from theft - of which the only evidence is money passing through the wallet of people associated with him - it seems that no crime was committed. Another attack on Bitcoin, and the war on drugs continues to kill more than the drugs themselves.
- 21 9y agoLike it or not, the lack of KYC/AML is in itself a crime. Maybe you should rephrase "Nothing which I would consider a crime happened"
- mirimir 9y agoOK, so it's cool to see some of this background. But far more important is the challenge of designing an exchange that can't be taken down.
- ttam 9y ago> Japanese exchange run by Frenchy gets hacked by Russian, fences BTC through a Bulgarian exchange and is arrested in Greece for USA warrant https://twitter.com/cactuspits/status/890358676300718081 https://twitter.com/cactuspits/status/890358676300718081