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FBI Looking for Hashflare Victims
- andrewfromx 4y agoseems to be a legit request from the fbi about a web3 token
- simple-thoughts 4y agoWho in their right mind would share their wallet info with the FBI. That’s an easy way to get shortlisted.
- nindalf 4y agoYeah! Don’t trust the man! The man is only interested in … something! There must be an ulterior motive in trying to bring scammers to book! Just think for a second. If someone has been scammed out of millions, you think they’re not going to talk to law enforcement about it? They wouldn’t only if they were perpetrating their own scam. At some point privacy nuts on HN have to really stop and think before typing.
- nonethewiser 4y agoI'm not exactly sure what the FBI would gain here, and it may be nothing, but distrusting them by default seems rational given their long history of corruption.
- nindalf 4y agoAgain, this communication from the FBI is specifically targeted at victims of a particular scam. The victims have already lost more than what the FBI could hypothetically maybe do to them. Unless we live in Scooby Doo-verse and the FBI agent removes his mask to reveal that he was the IRS all along and this was all a ploy to get people to pay their taxes.
- jojobas 4y agoI guess if you used crypto to trade in heroin you could lose quite a bit more.
- saalweachter 4y agoDo you get to write off rug pulls like any other capital loss? For that matter, what are the tax implications of getting mugged?
- nradov 4y agoLosses from theft are generally tax deductible. https://www.irs.gov/taxtopics/tc515 https://www.irs.gov/taxtopics/tc515
- kolbe 4y agoI think the real fear is that you never know what the FBI really wants. So unless you feel confident that you've covered all of the possible angles that an intelligence agency with 10000x the information you have could only be seeking exactly what they claim to be seeking, then sure, answering their call is fine. But the general rule is to never ever talk with them unless you have a lawyer present. You have no clue whether you're the target of an investigation. You have no clue whether the FBI knows some percentage of their targets were victims of this scam, and are using it to get an in with them (you). You just don't know anything going on behind the scenes.
- dsfyu404ed 4y agoBy corruption I assume you mean "a 100yr history doing nasty things that benefit the agency and/or the political goals of specific agency leaders and/or the political goals of specific people close to those leaders in direct or near direct contradiction of the organization's mandate and/or law. Basically they're evil, not corrupt.
- themitigating 4y agoTheir long history of corruption compared to all the non-corrupt things they have done?
- simple-thoughts 4y agoWhen considering which corporate bodies to trust, I consider their public statements and policies, their historical behaviors, and reports from other users of their services. The FBI’s official policy is to harasses individuals they place on secret watchlists. Historically, the agency has been one of the most corrupt from the beginning, especially the Hoover era, and has never gone through a period of substantive reform to resolve these issues. Additionally, multiple victims of crimes who have reported their situation to the FBI have either seen no positive actions or have even been harassed themselves by FBI employees. Currently there’s a severe shortage of reputable cybercrime security providers that also have enough capabilities to enforce the result of investigations, but the FBI is such a poor organization that it would be foolish to even consider requesting their services.
- themitigating 4y ago"Historically, the agency has been one of the most corrupt from the beginning," What proof do you that the FBI is more corrupt than other government agencies?
- simple-thoughts 4y agoMost USG agencies did not have programs similar to COINTELPRO. The FBI is the USG secret police and as such share they same set of problems other secret police have in other countries - since secret police suppress internal dissent with tactics veiled in secrecy, they are able to violate human rights much more easily than agencies that have more openness and less political valence.
- themitigating 4y ago" they are able to violate human rights much more easily than agencies that have more openness and less political valence." I asked you to show evidence for this statement ""Historically, the agency has been one of the most corrupt from the beginning". Not if it's easier for them to violate human rights. "Most USG agencies did not have programs similar to COINTELPRO." COINTELPRO is a secret surveillance program. There's been similar secret surveillance programs from the CIA and NSA, many discussed here regarding internet surveillance. [1][2] You also claim the FBI is the US secret police, similar to other countries secret police. What makes them like other countries secret police? What makes them more secret than the NSA or CIA? "since secret police suppress internal dissent with tactics veiled in secrecy," How is the FBI suppressing internal dissent? [1] https://www.brennancenter.org/our-work/analysis-opinion/how-cia-acting-outside-law-spy-americans https://www.brennancenter.org/our-work/analysis-opinion/how-... [2]https://www.eff.org/nsa-spying https://www.eff.org/nsa-spying
- burner9918 4y agoGive the Minneapolis FBI whistleblower account a read and then think for a second https://www.nytimes.com/2021/09/01/magazine/fbi-terrorism-terry-albury.html https://www.nytimes.com/2021/09/01/magazine/fbi-terrorism-te...
- nindalf 4y agoThank you for sharing this.
- voytec 4y agoNot sure about the right mind but the BTC core developer who "lost" 216 BTC a few days back apparently tried asking FBI for help[1]. [1] https://twitter.com/LukeDashjr/status/1609630432546406404#m https://twitter.com/LukeDashjr/status/1609630432546406404#m
- judge2020 4y agoAs long as you were going to pay taxes and weren’t actually defrauding people, might as well file a report in case anything comes of it.
- lfodofod 4y agoIt’s worth noting that Luke would be a prime target for nation state hackers from DPRK and the likes. What happened here was likely a failed attempt to slip a backdoor into bitcoin core, attackers pulled out and took his bitcoins as a consolation prize after he realised his server had been compromised. The FBI should absolutely be jumping on this, not because of bitcoin, but because of the likely perpetrators.
- luma 4y agoLuke had his wallet sitting on a server that he knew to be compromised for months. There is no reason to expect a nation state actor, his loss was 100% his own poor security. It also says a lot about the "wisdom" of hosting your own wallet. Can't trust the exchanges, and you can't trust your own wallet.
- neilv 4y agoI default to pro-privacy, on principle, but are you talking about a more specific threat? A threat that outweighs the benefits of: possibly increasing the likelihood/degree of takedown of an alleged scammer, and also possibly being more likely to be compensated for losses?
- simple-thoughts 4y agoThe FBI maintains databases of individuals that they consider potential terrorism with such weak definitions that anyone who uses a blockchain application would qualify[1]. When you are put on the list, they will never confirm or deny whether you are on the list. However you will find yourself losing rights to internationally travel freely without harassment, may have computing devices compromised by agents, may have wiretaps or microphones placed in your residence, and more. I will admit that they do target US citizens less than others, but most hashflare victims are not US citizens and do not get those protections. [1] https://www.fbi.gov/investigate/terrorism/tsc https://www.fbi.gov/investigate/terrorism/tsc
- pjc50 4y agoIf you're not a US national, you've no reason to appeal to the FBI anyway; speak to your local authorities.
- jsmith99 4y agoThey also specifically ask for people who made withdrawals. In a fraud like this, those who lost money often recover from the people who got out in time. Eg almost 90% of the losses from Bernie Madoff were recovered by suing those who innocently withdrew their 'gains' before the ponzi scheme was discovered.
- Waterluvian 4y agoI guess they can’t just ask people to hand over all “proceeds from a crime” and expect much response.
- avsteele 4y agoThat's fascinating. It would seem to set up a situation where your incentive, if you suspect a Ponzi scheme, is to quietly withdraw your money early then keep your mouth shut. Unfortunate if true.
- londons_explore 4y agoI would imagine the FBI to be able to trace the holders of all the big withdrawals through the blockchain.
- yellow_lead 4y agoHow? The blockchain doesn't store names or SSNs for every address. If the victim/user uses a mixer they can get their coins out easily and anonymously.
- chrisjc 4y agoI've been watching some of Coffeezilla's videos lately and he often gets into the analysis of "following the money" from one crypto wallet to another to show how lots of his subjects conducted their scams. Were these individuals just sloppy (probably) or is there some kind of forensic analysis that can be performed blockchains to trace the path of tokens/funds/credits through a mixer? Although I know nothing about crypto, blockchain, defi, I imagine credits/tokens/funds can be split and merged in every imaginable way by a "mixer" and transactions can probably occur across different blockchains via exchanges as well as occur outside in the real world, but I'm curious about any sort of signal that might be extracted from such analysis, other than signals arising from just pure sloppiness. BTW, I'm not disputing your asserting about being able to track people... more about breadcrumbs in general, even if they're anonymous.
- csomar 4y agoRelated arrests of the individuals involved: https://www.justice.gov/usao-wdwa/pr/two-estonian-citizens-arrested-575-million-cryptocurrency-fraud-and-money-laundering https://www.justice.gov/usao-wdwa/pr/two-estonian-citizens-a...
- ZhangSWEFAANG 4y ago[flagged]
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- xcdzvyn 4y agoI'm not sure what people expected investing in a coin called "Polybius"[0]. [0] https://en.wikipedia.org/wiki/Polybius_(urban_legend) https://en.wikipedia.org/wiki/Polybius_(urban_legend)
- H8crilA 4y agoI'm not sure what people expect of crypto in general yet this thing as a whole has some insane marketcap.
- sn_master 4y agoBuying drugs online is a big market and won't go anywhere. That, and transferring money to all kinds of people and regions where traditional banking tools aren't properly functional.
- fieldcny 4y agoThe unbanked/developing country story for crypto is complete bunk. Online drugs, porn, terrorist funding, and other illicit or anti-social behavior , that’s likely gonna wind up being the only use case for all that nonsense
- mhitza 4y agoPOLYBIUS - The Video Game That Doesn't Exist https://www.youtube.com/watch?v=_7X6Yeydgyg https://www.youtube.com/watch?v=_7X6Yeydgyg
- throwawaybutwhy 4y agoI'd wager 10¢ that this is primarily driven by AML efforts.
- londons_explore 4y ago> The government alleges that the HashFlare cloud mining service did not have access to the volume of mining power that was needed to service the amount of mining contracts it sold to the public. The government further alleges that, to enable HashFlare to create the illusion that it was mining bitcoin, Potapenko purchased bitcoin from a third party and distributed it to victims who were requesting withdrawals from their HashFlare account. This seems kinda reasonable as long as it was disclosed... Buying and setting up mining hardware takes a while. Buying bitcoins on the open market from someone else who has mining hardware is functionally identical. It's a bit like going to a farmer and giving him money to grow a field of corn for you, only to find out he actually gave your money to some other farmer who grew the corn and gave it to you.
- fnordpiglet 4y agoThat’s also how a Ponzi scheme works
- sofixa 4y agoI think you're missing an important component: > who were requesting withdrawals from their HashFlare account So it was more like a ton of people pay a farmer to grow a field of corn, and when they ask for corn in return, the farmer buys corn somewhere else and presents it as from his field. Meanwhile the farmer hasn't planted what they should have, and hopes not too many people ask for their cork or they'll crash.
- londons_explore 4y agoSo the real issue is 'Hashflare did not have sufficient assets to cover balances in all customer accounts'. Akin to 'farmer neither has corn growing nor money to buy corn to fulfil promises to customers' That would be the crime...
- itake 4y agoMy understanding is this farmer was paid to grow food, not buy it from another farmer. The expectation was this farmer would grow new calories (increasing the supply of food for the region). You may argue there is a fixed number of crypto released and thus not fair, but allocating that money towards the open market instead of toward hardware and energy company has an impact on the crypto's value.
- garganzol 4y agoThis whole story sounds like an intro track of an imaginary "Wild Crypto of ICO 2017" album if it was a thing. There are so many tracks yet to be discovered.
- deafpiano 4y agoonly took them 7 years, great work!
- _throwawayaway 4y agoI've never seen a Russian name written like that: Ivan Turõgin
- icepat 4y agoThat's an Estonian name. Estonians are not Russian, though there's a Russian speaking city, Narva, in the east. Calling Estonians Russians is not taken well at all. The relationship between the Russian minority, and the Estonian majority is... tense.
- gggggg5 4y agoOf course Турыгин is a Russian name. Spelling it using Estonian script doesn't change anything. Looking up other Turõgins in Estonia, they all have very obviously Russian first names and zero obviously Estonian names. There's no doubt that Ivan Turõgins parents fully intended to give him a Russian name, even if Estonia requires Estonian script on Estonian identity documents. Even Estonians call these names "Russian names", that's what they are. If someone in Estonia decides to name their kid Muhamed, that doesn't magically become an Estonian name. > Calling Estonians Russians is not taken well at all I suspect that your comment wouldn't be taken very well by Estonian Turõgins
- icepat 4y ago> If someone in Estonia decides to name their kid Muhamed, that doesn't magically become an Estonian name. Correct, but it does not suddenly make them another nationality. Also, it's not spelled as you spelled it for a reason -- it's Estonian you're looking at. Not Russian. The reason it looks different, is because they're Estonian, so the name will be different. My second point, which is pretty clear in the first place, is that a nation of people illegally occupied by Russia for decades, isn't keen on being labelled as Russian.
- gggggg5 4y agoNobody was called Russian. _throwawayaway correctly called it a Russian name, you incorrectly replied with "That's an Estonian name", which it isn't. Most of the Estonians with Russian names do identify as Russian, even if they aren't necessarily Russian nationals. It's an ethnic group, these are ethnic Russians. > The reason it looks different, is because they're Estonian, so the name will be different This is false. It's spelled the way it is spelled because that's how Estonian government wants names spelled. Also, because it would be awkward to interact with a society where most people do not know the Cyrillic alphabet.
- fortran77 4y agoIf someone wants to pour money into a crazy scheme, why should our government waste resources to protect them? The website says "The FBI is legally mandated to identify victims of federal crimes that it investigates" so I suppose that's the stated reason, but why should they care? If someone was illegally selling securities that they claimed were regulated or audited, or that depositor's funds were FDIC or SPIC insured, certainly law enforcement should step in for the "victims." But why waste FBI manpower in this case? Why not just let "a fool and his money" go anyway they want? (Is it because the stolen money went to fund nefarious things, like North Korea?)
- UncleEntity 4y ago> But why waste FBI manpower in this case? Because half of the purpose of punishment for crime is deterrence? If “they should have known better” was a valid legal defense for fraud…
- everfree 4y agoAre you asking why the government should prosecute crimes, or are you asking why securities laws exist in the first place?
- astrange 4y agoNorth Korea can steal crypto directly and doesn't need help from Estonians. Though Lazarus doesn't seem to have been indicted for anything yet.
- ZhangSWEFAANG 4y ago[flagged]
- 123123213444 4y ago[flagged]
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- prettywoman 4y ago[dead]
- paulpauper 4y agoWhen are we going to start seeing arrests of fraudulent promotions, rug pulls, and shitcoin promotions by celebrities
- astrange 4y agoToday. https://www.justice.gov/usao-edny/pr/non-fungible-token-nft-developer-charged-multi-million-dollar-international-fraud https://www.justice.gov/usao-edny/pr/non-fungible-token-nft-...
- uconnectlol 4y ago[flagged]