4 ms·

This comment by Andre is enlightening: > I know how this is done. It is the best way to launder bitcoin revenue generated from all kinds of illegal activities.

This comment by Andre is enlightening: > I know how this is done. It is the best way to launder bitcoin revenue generated from all kinds of illegal activities. They go to Giftly or Gyft and by Amazon gift cards for the bitcoin. Then they just pay themselves. That is the only way to not get your account closed. It is not credit card fraud!!! Gift cards are always under the radar on Amazon.

bobcostas55 9y ago
...aren't those gift cards you buy with bitcoin bought with stolen CCs?
- jacobush 9y ago
  I guess, but the scam is robust because they "outsource" the illegality of stolen credit cards to the person selling the gift card. Pretty insidious.
  - matte_black 9y ago
    Defrauding a seller with stolen credit cards is despicable. I know someone who had an online startup selling tickets and was massively defrauded by foreign hackers with stolen credit cards. He was personally liable for the losses and it ended up bankrupting him. His life was a downward spiral after that, resulting in divorce, losing his home, and ultimately committing suicide.
    - jlgaddis 9y ago
      Why was he personally liable?
      - majjam 9y ago
        I suspect its because he won't have setup the company as one with limited liability: https://en.wikipedia.org/wiki/Limited_liability https://en.wikipedia.org/wiki/Limited_liability the result being that when people sued, they sued him personally rather than the company.
        morogop 9y ago
        or he had it as an LLC, but made a mistake along the way that pierced the corporate veil. Or as a small business, he was just straight-up forced to pierce the corporate veil. (banks do this to small biz all the time).
        matte_black 9y ago
        It's not always so simple when you're a small company owned by one person. Even if you have an LLC, if you run into significant money problems someone with enough resources WILL come after you personally.
      - rbcgerard 9y ago
        More than likely he borrowed money and despite the entity structure, personally guaranteed it (which is typical for most small business loans)
      - phil21 9y ago
        If you are a small business with no significant assets or revenue - say you are plugging away making $4k/mo scraping by - you will likely not be getting a merchant account without a personal financial guarantee. The corporate veil is mostly a fiction for small bootstrapped startups without initial seed capital.
    - maaaats 9y ago
      Remember reading here about how candy japan being hit by something similar. [0] [0]: https://www.candyjapan.com/behind-the-scenes/candy-japan-hit-with-credit-card-fraud https://www.candyjapan.com/behind-the-scenes/candy-japan-hit... / https://news.ycombinator.com/item?id=10237697 https://news.ycombinator.com/item?id=10237697
    - chatmasta 9y ago
      What's crazy is it only takes one bad actor to cause problems like this. Often fraudsters will just use one website to "test" if a card is good, by using it to make a small purchase. If it goes through, the card is good. One fraudster might do this 100 times on a small site. The merchant is liable for the chargebacks that will come within 30 days, and each chargeback typically costs $15. Additionally, if the percent of chargebacks as a total of all transactions goes over 2%, the merchant account provider will likely close the account due to risk.
- willvarfar 9y ago
  Or the ransoms people pay for decrypting their harddrives etc. Lots of ways to get bitcoin and want to get cash.
- justonepost 9y ago
  Drug dealers profiting from bitcoin need to get their money out too, ya know.
- nocobot 9y ago
  Gyft appears to me to be a legit business (I only had a short look at their website). Buying gift cards at regular prices and then selling them with a small markup while providing anonymity for your customers seems plausible.
  - deleted 9y ago
    [deleted]
- masklinn 9y ago
  The bitcoins could also come from drug sales, extorsion, betting, fencing stolen property, …
nocobot 9y ago
Unless I'm missing something this doesn't really seem to launder the money. Sure you have converted bitcoin to cash but the cash still doesn't look like legitimate income if you don't sell the books under your own name (which they clearly don't). So wouldn't it be easier to just sell bitcoin on exchanges like localbitcoin?
- tantalor 9y ago
  > the cash still doesn't look like legitimate income It would if you used your real identity for the "book" sales instead of fraudulent id. Then the proceeds are legitimate. Govt would have to prove you faked the sales, which is easy to hide.
  - jonwachob91 9y ago
    It also doesn't seem that far fetched to actually write a 60 page book. One topic per book (civil war, computers, carbons, whatever) copy and paste wikipedia articles on various points related to the topic, some crappy pics, and bam, one day of work and you've got something you could claim to be a real book if anyone started investigating.
    - tantalor 9y ago
      Or just publish one of these: https://en.wikibooks.org/wiki/Guitar https://en.wikibooks.org/wiki/Guitar https://upload.wikimedia.org/wikipedia/commons/7/74/Guitar.pdf https://upload.wikimedia.org/wikipedia/commons/7/74/Guitar.p...
  - arctica27 9y ago
    I don't think it would be that easy to hide. It would be easy to dragnet and find suspects by getting Amazon to report % of purchases by gift card by author, and then following up manually with a few customers should be enough to filter out any false positives and snare the scammers.
    - tantalor 9y ago

bobcostas55 9y ago

...aren't those gift cards you buy with bitcoin bought with stolen CCs?

jacobush 9y ago
I guess, but the scam is robust because they "outsource" the illegality of stolen credit cards to the person selling the gift card. Pretty insidious.
- matte_black 9y ago
  Defrauding a seller with stolen credit cards is despicable. I know someone who had an online startup selling tickets and was massively defrauded by foreign hackers with stolen credit cards. He was personally liable for the losses and it ended up bankrupting him. His life was a downward spiral after that, resulting in divorce, losing his home, and ultimately committing suicide.
  - jlgaddis 9y ago
    Why was he personally liable?
    - majjam 9y ago
      I suspect its because he won't have setup the company as one with limited liability: https://en.wikipedia.org/wiki/Limited_liability https://en.wikipedia.org/wiki/Limited_liability the result being that when people sued, they sued him personally rather than the company.
      - morogop 9y ago
        or he had it as an LLC, but made a mistake along the way that pierced the corporate veil. Or as a small business, he was just straight-up forced to pierce the corporate veil. (banks do this to small biz all the time).
      - matte_black 9y ago
        It's not always so simple when you're a small company owned by one person. Even if you have an LLC, if you run into significant money problems someone with enough resources WILL come after you personally.
    - rbcgerard 9y ago
      More than likely he borrowed money and despite the entity structure, personally guaranteed it (which is typical for most small business loans)
    - phil21 9y ago
      If you are a small business with no significant assets or revenue - say you are plugging away making $4k/mo scraping by - you will likely not be getting a merchant account without a personal financial guarantee. The corporate veil is mostly a fiction for small bootstrapped startups without initial seed capital.
  - maaaats 9y ago
    Remember reading here about how candy japan being hit by something similar. [0] [0]: https://www.candyjapan.com/behind-the-scenes/candy-japan-hit-with-credit-card-fraud https://www.candyjapan.com/behind-the-scenes/candy-japan-hit... / https://news.ycombinator.com/item?id=10237697 https://news.ycombinator.com/item?id=10237697
  - chatmasta 9y ago
    What's crazy is it only takes one bad actor to cause problems like this. Often fraudsters will just use one website to "test" if a card is good, by using it to make a small purchase. If it goes through, the card is good. One fraudster might do this 100 times on a small site. The merchant is liable for the chargebacks that will come within 30 days, and each chargeback typically costs $15. Additionally, if the percent of chargebacks as a total of all transactions goes over 2%, the merchant account provider will likely close the account due to risk.
willvarfar 9y ago
Or the ransoms people pay for decrypting their harddrives etc. Lots of ways to get bitcoin and want to get cash.
justonepost 9y ago
Drug dealers profiting from bitcoin need to get their money out too, ya know.
nocobot 9y ago
Gyft appears to me to be a legit business (I only had a short look at their website). Buying gift cards at regular prices and then selling them with a small markup while providing anonymity for your customers seems plausible.
- deleted 9y ago
  [deleted]
masklinn 9y ago
The bitcoins could also come from drug sales, extorsion, betting, fencing stolen property, …

nocobot 9y ago

Unless I'm missing something this doesn't really seem to launder the money. Sure you have converted bitcoin to cash but the cash still doesn't look like legitimate income if you don't sell the books under your own name (which they clearly don't). So wouldn't it be easier to just sell bitcoin on exchanges like localbitcoin?

tantalor 9y ago
> the cash still doesn't look like legitimate income It would if you used your real identity for the "book" sales instead of fraudulent id. Then the proceeds are legitimate. Govt would have to prove you faked the sales, which is easy to hide.
- jonwachob91 9y ago
  It also doesn't seem that far fetched to actually write a 60 page book. One topic per book (civil war, computers, carbons, whatever) copy and paste wikipedia articles on various points related to the topic, some crappy pics, and bam, one day of work and you've got something you could claim to be a real book if anyone started investigating.
  - tantalor 9y ago
    Or just publish one of these: https://en.wikibooks.org/wiki/Guitar https://en.wikibooks.org/wiki/Guitar https://upload.wikimedia.org/wikipedia/commons/7/74/Guitar.pdf https://upload.wikimedia.org/wikipedia/commons/7/74/Guitar.p...
- arctica27 9y ago
  I don't think it would be that easy to hide. It would be easy to dragnet and find suspects by getting Amazon to report % of purchases by gift card by author, and then following up manually with a few customers should be enough to filter out any false positives and snare the scammers.
  - tantalor 9y ago