11 ms·

U.S. Alleges $6 Billion Money-Laundering Operation Using Virtual Currency

119 points by sethbannon 13y ago

bifrost 13y ago
All I can say is "ouch".
rayiner 13y ago
Fail, WSJ, epic fail. I stopped reading at: "Officials brought charges against a group of men who allegedly manufactured an Internet-based currency to launder about $6 billion in ill-gotten gains, a sign of authorities' rising concern with digital cash." These reporters seem totally and utterly confused.
- swombat 13y ago
  You should have kept reading. This might be a blurry sentence, but the rest of the article is pretty clear.
- jontas 13y ago
  I noticed a couple of other odd tidbits: > The rise of virtual currencies has been exemplified by bitcoin, which lets Internet users create new money by solving complex math problems. While technically correct, this explanation would probably give a layperson the wrong impression as to how bitcoins are mined. > A transaction would start with one person opening a Liberty Reserve account using a false name and address, including what prosecutors said were blatant criminal monikers such as "Russia Hackers" or "Hacker Account." Those are blatant criminal monikers? They sound more like trolls to me--serious criminals are probably a bit more sophisticated in their fraud.
swombat 13y ago
A big warning side for Silk Road and MtGox, I would guess. If you let a large proportion of Bitcoin transactions become linked with illegal things like drugs, credit card fraud, and money laundering, the law will certainly figure out a way to shut it down. So I guess the interesting question is how the Bitcoin community can police itself to ensure that these types of transactions (while ultimately not avoidable altogether) remain a minor part of the whole.
- jonknee 13y ago
  > If you let a large proportion of Bitcoin transactions become linked with illegal things like drugs, credit card fraud, and money laundering, the law will certainly figure out a way to shut it down. That hasn't happened with cash [yet]. Humorously, if the idea of cash was new today like digital currencies are it would be outlawed for our "safety".
  - srdev 13y ago
    > That hasn't happened with cash [yet]. Humorously, if the idea of cash was new today like digital currencies are it would be outlawed for our "safety". The key word here is "proportion." Cash is used in a lot of illegal stuff, but its used legally far more than the illegal. I don't know what the proportion is for Bitcoin, but this answer doesn't that fact. Its a rather poor rebuttal to the issue of Bitcoin being used for illegal activity.
    - dustcoin 13y ago
      What about 100 dollar bills in particular? I would be curious to see what percentage of transactions using these bills involve tax evasion, drugs, or other illegal activity.
      - srdev 13y ago
        That's an interesting thought. Yes, it'd be very nice to see detailed statistics on various US dollar denominations, and Bitcoin as well.
  - genwin 13y ago
    If it's US cash it's safe. Non-US currency that can be shut down by the US without major penalty to the US is not safe. Even a small proportion of illicit transactions will suffice for pretext. Bitcoin's best bet is to become widely used as quickly as possible. At this point it could be shut down (indirectly) with the vast majority of the public believing that was needed to stop the bad guys.
  - 13y ago
jonknee 13y ago
Bizarrely, the US is demanding the charged parties to forfeit $6B USD. I'm sure they know that the $6B doesn't exist, but it seems that it should be illegal to demand that it be forfeited. The $6B total appears to be each transaction added. If $100 got transfered within LD 10 times the government says there should be $1,000 (and is demanding it be given to the US gov't), but in reality only $100 ever existed and it's quite likely that after being transferred internally it had been transferred out of LD.
- powertower 13y ago
  > Bizarrely, the US is demanding the charged parties to forfeit $6B USD. Were are you getting that from?
  - jonknee 13y ago
    http://www.documentcloud.org/documents/704540-liberty-reserve-indictment.html#document/p21 http://www.documentcloud.org/documents/704540-liberty-reserv... 43.a ... The defendants, shall forfeit to the United States, pursuant to Title 18, United States Code, Section 982(a)(1), all property, real and personal, involved in the offenses and all property traceable to such property, including but not limited to: a. A sum of money of at least $6 billion in United States currency;
- deleted 13y ago
  [deleted]
- derefr 13y ago
  Reminds me of the original charges in the Madoff case: "you lied and told people they had $N made-up dollars in their funds, so now you owe them $N, even though $N never did exist."
  - jonknee 13y ago
    Yes, the fact that they used his made up numbers to describe his fraud (and continue to do so!) is very annoying. I expect that out of the media, but in the actual legal charges it is nonsensical. He stole a lot of money, but he didn't steal what he had simply made up.
twasfm 13y ago
How is this any different than Wall Street's shenanigans? Serious question
- josh2600 13y ago
  Wall Street, however ridiculous it might be, jumps through the necessary legal loopholes that we, as a society, have deemed necessary to perform monetary transactions at scale. Companies like MtGox and Liberty Reserve simply decided to skirt the envelope and paid the price. The answer is to register as a money transmitter; simple and plain. The difference is one conforms to the law and maximizes its potential whereas the other simply willfully ignores the law. The latter does not work whereas the former is tolerated as a matter of course.
  - deleted 13y ago
    [deleted]
  - jacoblyles 13y ago
    When did we as a society decide that anonymous transactions ought to be illegal? Because I would like to voice my opinion in the other way.
    - fragsworth 13y ago
      "We as a society" didn't really do this. The banks, however, really like this, because it solidifies their economic position. Imagine how much more money they'd make if everyone is required by law to make all their transactions through them. Who do you think is trying to convince people that this is the right way to do things? How long have we associated "anonymous transactions" with terrorism etc.? Only recently, we've developed the idea that something must be wrong with you if you use cash. $100 doesn't even afford a meal for two at a nice restaurant and people look at you like you're a drug dealer if you carry a $100 bill.
      - mbetter 13y ago
        > "We as a society" didn't really do this. Yes, we most certainly did. Start with the Bank Secrecy Act which was enacted, by duly elected representatives of the People of the United States, in 1970. This group of regulations "require[s] financial institutions, which under the current definition include a broad array of entities, including banks, credit card companies, life insurers, money service businesses and broker-dealers in securities, to report certain transactions to the United States Treasury."
vvortex3 13y ago
I think by "money laundering" the governments of the world are referring to untaxed income. God forbid the peasants transfer money between countries without being taxed.
billions 13y ago
It seems this is a direct step towards putting the brakes on Bitcoin. You can bet the new Bitcoin startup investors are recalculating their risk. And that was the goal with the timing of this takedown- to slow future institutional investment in BTC. The govt knows it cannot take down the protocol itself, much like bit torrent, however it can make local corporations through a straw. On the same token, savvy bitcoin startup investors also realize that bitcoin will be around until Star Trek as a sound mathematical model cannot be destroyed by any govt.
- dmix 13y ago
  I'd personally look to how governments around the world have tried to deal with Bittorrents. 1) Shutting down big torrent sites by modifying laws (for example, making linking to torrents illegal) 2) ISPs blocking the big sites domains like piratebay 3) Fining consumer users (who failed to be anonymous with VPNs and other tools) 4) Attacking the big users of the network (seed boxes, pirate groups or in the context of BTC: miners) The other approach is make the conversion of state currency into BTC illegal. But the implications of that are unclear. Would people adopt a different crypto-currency? Would all crypto-currencies be banned? Could a BTC black market still exist like drugs?
  - skcin7 13y ago
    > The other approach is make the conversion of state currency into BTC illegal. But the implications of that are unclear. Would people adopt a different crypto-currency? Would all crypto-currencies be banned? Could a BTC black market still exist like drugs? I think more than likely it would be like torrents are now: a large amount of the tech-savvy population uses them and loves them, but a lot of people are afraid they'll get sued or have a letter written to their house from their ISP (which means nothing), and would rather just pay $7.99/month for a worse selection on Netflix and maintain a peace of mind.
DanielBMarkham 13y ago
"The system allegedly was designed to give criminals a way to move money earned from credit-card fraud, online Ponzi schemes, child pornography and other crimes without being detected by law enforcement." This is like saying Henry Ford designed the modern automobile to be used in bank robberies, drunk driving murders, hit-and-run maimings, and kidnapping. Yes, virtual currency is attractive to criminals. It's also attractive to law-abiding citizens, many of whom do not like to be lumped into one big morass with "organized crime" stuck on top as a label. We're stepping dangerously close to "If criminals like doing it, it must be bad" reasoning. ADD: I also note this section: "...On Tuesday, in the first use of the 2001 Patriot Act against a virtual currency, the Treasury Department invoked a section of the law to choke off Liberty Reserve from the U.S. financial system..." Well, there's your terrorism act, used to control crime via virtual currency. We get scared of one thing, pass a law, and then see it used in a completely different context. The current American kerfuffle involving investigating reporters is tied to a WWI-era law that's almost never used. Amazing the tools American prosecutors have available to them. One could say overbearing, even. ADD2: Nobody is saying they are innocent. The point here is that these guys are being shut down (and they probably need to be shut down) by procedures that have broad application to all kinds of legitimate use as well. These are very broad and powerful tools we've given the state. We should take some time and think about if they need to be more narrowly-focused. The initial Patriot Act had an expiration date. For a reason.
- jonknee 13y ago
  Obviously few people are going to pipe in and say that they used LD for illegal purposes, but I've read a lot of comments today from people who used it simply because it was cheaper than other options. It makes sense, you could easily make an account and could use it globally and there are a lot of countries without strong banking sectors. It's nuts that the US can step in and shut down a foreign company like this. I understand cracking down on any of the exchangers that operated in the US, but it's really not the US's business if foreign parties in foreign countries exchange money with a foreign company.
  - eurleif 13y ago
    >it was cheaper than other options What if the only reason it was cheaper for legal uses is that they were being subsidized by the illegal uses? What if the pricing LD offered would not have been a workable business model if they hadn't allowed money laundering? (I don't know the facts here. I'm just offering a possibility.)
fragsworth 13y ago
HSBC got away with paying a fee of under $2 billion for not monitoring $60 trillion worth of wire transfers. They made a profit of something like $15 billion during that year, so their fines barely even touched their profits. The moral of the story here is if you're going to launder money, you should launder a whole shitload of it. Because then you only have to pay a tiny percentage worth in fees. If you don't launder enough, you'll end up broke and in prison. Imagine if this kind of logic applied to other crimes. You could have a sex slave operation with one prostitute and get caught and go to jail for the rest of your life. But if you run a massive sex-slave industry with tens of thousands of slaves (children for the hell of it), and made $10 billion a year, you'd occasionally get a fine of 10% of your profits that year and be allowed to continue on as if nothing happened...?
- taliesinb 13y ago
  > if you're going to launder money, you should launder a whole shitload of it Yes. Or rather, if you're going to launder money, make sure you're making healthy campaign contributions, hiring ex-politicians and their staffers as lobbyists, oiling the great lobbying machine, etc... For those who haven't read it, Lessig has written a rather nice book on exactly how this kind of "soft corruption" works: http://www.amazon.com/Republic-Lost-Money-Corrupts-Congress/dp/0446576433 http://www.amazon.com/Republic-Lost-Money-Corrupts-Congress/...
  - contingencies 13y ago
    For a more visual equivalent (lower attention span required) check out http://topdocumentaryfilms.com/money-lobby/ http://topdocumentaryfilms.com/money-lobby/
- wnight 13y ago
  Go out in the desert with one captive and torture them and we'd try to stop you. Enslave a few million and successfully arm yourself against potential rescuers and you meet all the accepted standards of a sovereign nation.
mattbarrie 13y ago
Looks like they are circling MtGox. Technocash is the bank account mentioned here: http://www.smh.com.au/it-pro/security-it/westpac-caught-up-in-worlds-biggest-money-laundering-sting-20130529-2naa8.html http://www.smh.com.au/it-pro/security-it/westpac-caught-up-i... Not many ways into MtGox now. From MtGox: Transaction Limits Deposits All methods below do not have deposit limits: Bitcoin - For everyone. LibertyReserve - Through AurumXchange and Bitinstant only OKPAY - For everyone has an OKPay account. Japanese Domestic Transfer - For Japanese residents who have a "verified" account with us. Technocash - Only for Australian residents who have a "verified" account. Wire - For "verified" or "trusted" account status. Please note that we are unable to accept funds coming from any entity or country listed by the OFAC* SEPA - In order to make Euro deposits you need to have a "verified" or "trusted" account status. To check if your account has been "trusted" or "verified" please visit: https://mtgox.com/forms/verification https://mtgox.com/forms/verification to apply.
bdcravens 13y ago
If 30 years ago it had been known that the Internet could be used for child pornography or communicating about blowing up important buildings, I wonder what today's world would be like if today's mindset had been prevailing then.
linuxhansl 13y ago
Those alleged 6 bn sound a lot like the fictitious $150k per illegally copied songs or the x bn the music industry allegedly loses due to illegal downloading.
DigitalSea 13y ago
I knew once the likes of the Wall Street Journal and New York Times started writing about Bitcoin it was only a matter of time before the Government initiated its plan to discredit and eventually make the anonymous and decentralised currency illegal. "We need a way to publicly discredit this non-controllable currency alternative without raising suspicion" "Well sir, I have a plan. How about we tell the public only criminals are using Bitcoin to launder money, criminals are selling guns and drugs to students and paedophiles are using it to sell child pornography. We'll make the public eventually beg us to ban this currency and when people complain we are being unreasonable or have ulterior motives we can proudly say we are only doing what you asked us to" First and foremost money laundering isn't a new practice. Mobsters in the 20's were laundering money, Laundromats, cafes and nightclubs are perfect fronts for money laundering operations as well. Yes, no doubt Bitcoin is being used for nefarious purposes (look at Silk Road for a perfect example), but lets not lose our cool over this. What we are starting to see is a coordinated effort by the US to remove the threat that is Bitcoin. While I have no conclusive proof that is the case, it's not rocket science that too many people benefit from the current monetary system to not want to see it become less relevant or have its dominance threatened in any way, way or form. The powers that be didn't think much of it in the beginning, but Bitcoin is starting to gain a lot of traction, not to mention we are starting to see the currency stabilise.
- chii 13y ago
  i hate to admit it, but where there is smoke, there is fire. I predicted that the financial elites who owns the banks and control cashflow (such as the holders of shares of the privately owned fed reserve) would not want a form of currency they cannot debase at their will. Gold was first to go in the 70's, and now bitcoin, having similar properties of gold, is on the crosshairs. I can only just hope the general public has enough sense to see through propaganda. Bitcoin survival depends on it going mainstream, and its the one weakness no technology can solve.
brownbat 13y ago
"Mr. Bharara said the exchange’s clientele was largely made up of criminals, but he invited any legitimate users to contact his office to get their money back." http://www.nytimes.com/2013/05/29/nyregion/liberty-reserve-operators-accused-of-money-laundering.html http://www.nytimes.com/2013/05/29/nyregion/liberty-reserve-o... Not sure how that would work, you might just be charged with conspiracy.

119 points by sethbannon 13y ago

All I can say is "ouch".

Fail, WSJ, epic fail. I stopped reading at: "Officials brought charges against a group of men who allegedly manufactured an Internet-based currency to launder about $6 billion in ill-gotten gains, a sign of authorities' rising concern with digital cash." These reporters seem totally and utterly confused.

swombat 13y ago
You should have kept reading. This might be a blurry sentence, but the rest of the article is pretty clear.
jontas 13y ago
I noticed a couple of other odd tidbits: > The rise of virtual currencies has been exemplified by bitcoin, which lets Internet users create new money by solving complex math problems. While technically correct, this explanation would probably give a layperson the wrong impression as to how bitcoins are mined. > A transaction would start with one person opening a Liberty Reserve account using a false name and address, including what prosecutors said were blatant criminal monikers such as "Russia Hackers" or "Hacker Account." Those are blatant criminal monikers? They sound more like trolls to me--serious criminals are probably a bit more sophisticated in their fraud.

swombat 13y ago

A big warning side for Silk Road and MtGox, I would guess. If you let a large proportion of Bitcoin transactions become linked with illegal things like drugs, credit card fraud, and money laundering, the law will certainly figure out a way to shut it down. So I guess the interesting question is how the Bitcoin community can police itself to ensure that these types of transactions (while ultimately not avoidable altogether) remain a minor part of the whole.

jonknee 13y ago
> If you let a large proportion of Bitcoin transactions become linked with illegal things like drugs, credit card fraud, and money laundering, the law will certainly figure out a way to shut it down. That hasn't happened with cash [yet]. Humorously, if the idea of cash was new today like digital currencies are it would be outlawed for our "safety".
- srdev 13y ago
  > That hasn't happened with cash [yet]. Humorously, if the idea of cash was new today like digital currencies are it would be outlawed for our "safety". The key word here is "proportion." Cash is used in a lot of illegal stuff, but its used legally far more than the illegal. I don't know what the proportion is for Bitcoin, but this answer doesn't that fact. Its a rather poor rebuttal to the issue of Bitcoin being used for illegal activity.
  - dustcoin 13y ago
    What about 100 dollar bills in particular? I would be curious to see what percentage of transactions using these bills involve tax evasion, drugs, or other illegal activity.
    - srdev 13y ago
      That's an interesting thought. Yes, it'd be very nice to see detailed statistics on various US dollar denominations, and Bitcoin as well.
- genwin 13y ago
  If it's US cash it's safe. Non-US currency that can be shut down by the US without major penalty to the US is not safe. Even a small proportion of illicit transactions will suffice for pretext. Bitcoin's best bet is to become widely used as quickly as possible. At this point it could be shut down (indirectly) with the vast majority of the public believing that was needed to stop the bad guys.
- 13y ago

jonknee 13y ago

Bizarrely, the US is demanding the charged parties to forfeit $6B USD. I'm sure they know that the $6B doesn't exist, but it seems that it should be illegal to demand that it be forfeited. The $6B total appears to be each transaction added. If $100 got transfered within LD 10 times the government says there should be $1,000 (and is demanding it be given to the US gov't), but in reality only $100 ever existed and it's quite likely that after being transferred internally it had been transferred out of LD.

powertower 13y ago
> Bizarrely, the US is demanding the charged parties to forfeit $6B USD. Were are you getting that from?
- jonknee 13y ago
  http://www.documentcloud.org/documents/704540-liberty-reserve-indictment.html#document/p21 http://www.documentcloud.org/documents/704540-liberty-reserv... 43.a ... The defendants, shall forfeit to the United States, pursuant to Title 18, United States Code, Section 982(a)(1), all property, real and personal, involved in the offenses and all property traceable to such property, including but not limited to: a. A sum of money of at least $6 billion in United States currency;
deleted 13y ago
[deleted]
derefr 13y ago
Reminds me of the original charges in the Madoff case: "you lied and told people they had $N made-up dollars in their funds, so now you owe them $N, even though $N never did exist."
- jonknee 13y ago
  Yes, the fact that they used his made up numbers to describe his fraud (and continue to do so!) is very annoying. I expect that out of the media, but in the actual legal charges it is nonsensical. He stole a lot of money, but he didn't steal what he had simply made up.

twasfm 13y ago

How is this any different than Wall Street's shenanigans? Serious question

josh2600 13y ago
Wall Street, however ridiculous it might be, jumps through the necessary legal loopholes that we, as a society, have deemed necessary to perform monetary transactions at scale. Companies like MtGox and Liberty Reserve simply decided to skirt the envelope and paid the price. The answer is to register as a money transmitter; simple and plain. The difference is one conforms to the law and maximizes its potential whereas the other simply willfully ignores the law. The latter does not work whereas the former is tolerated as a matter of course.
- deleted 13y ago
  [deleted]
- jacoblyles 13y ago
  When did we as a society decide that anonymous transactions ought to be illegal? Because I would like to voice my opinion in the other way.
  - fragsworth 13y ago
    "We as a society" didn't really do this. The banks, however, really like this, because it solidifies their economic position. Imagine how much more money they'd make if everyone is required by law to make all their transactions through them. Who do you think is trying to convince people that this is the right way to do things? How long have we associated "anonymous transactions" with terrorism etc.? Only recently, we've developed the idea that something must be wrong with you if you use cash. $100 doesn't even afford a meal for two at a nice restaurant and people look at you like you're a drug dealer if you carry a $100 bill.
    - mbetter 13y ago
      > "We as a society" didn't really do this. Yes, we most certainly did. Start with the Bank Secrecy Act which was enacted, by duly elected representatives of the People of the United States, in 1970. This group of regulations "require[s] financial institutions, which under the current definition include a broad array of entities, including banks, credit card companies, life insurers, money service businesses and broker-dealers in securities, to report certain transactions to the United States Treasury."

vvortex3 13y ago

I think by "money laundering" the governments of the world are referring to untaxed income. God forbid the peasants transfer money between countries without being taxed.

billions 13y ago

It seems this is a direct step towards putting the brakes on Bitcoin. You can bet the new Bitcoin startup investors are recalculating their risk. And that was the goal with the timing of this takedown- to slow future institutional investment in BTC. The govt knows it cannot take down the protocol itself, much like bit torrent, however it can make local corporations through a straw. On the same token, savvy bitcoin startup investors also realize that bitcoin will be around until Star Trek as a sound mathematical model cannot be destroyed by any govt.

dmix 13y ago
I'd personally look to how governments around the world have tried to deal with Bittorrents. 1) Shutting down big torrent sites by modifying laws (for example, making linking to torrents illegal) 2) ISPs blocking the big sites domains like piratebay 3) Fining consumer users (who failed to be anonymous with VPNs and other tools) 4) Attacking the big users of the network (seed boxes, pirate groups or in the context of BTC: miners) The other approach is make the conversion of state currency into BTC illegal. But the implications of that are unclear. Would people adopt a different crypto-currency? Would all crypto-currencies be banned? Could a BTC black market still exist like drugs?
- skcin7 13y ago
  > The other approach is make the conversion of state currency into BTC illegal. But the implications of that are unclear. Would people adopt a different crypto-currency? Would all crypto-currencies be banned? Could a BTC black market still exist like drugs? I think more than likely it would be like torrents are now: a large amount of the tech-savvy population uses them and loves them, but a lot of people are afraid they'll get sued or have a letter written to their house from their ISP (which means nothing), and would rather just pay $7.99/month for a worse selection on Netflix and maintain a peace of mind.

DanielBMarkham 13y ago

"The system allegedly was designed to give criminals a way to move money earned from credit-card fraud, online Ponzi schemes, child pornography and other crimes without being detected by law enforcement." This is like saying Henry Ford designed the modern automobile to be used in bank robberies, drunk driving murders, hit-and-run maimings, and kidnapping. Yes, virtual currency is attractive to criminals. It's also attractive to law-abiding citizens, many of whom do not like to be lumped into one big morass with "organized crime" stuck on top as a label. We're stepping dangerously close to "If criminals like doing it, it must be bad" reasoning. ADD: I also note this section: "...On Tuesday, in the first use of the 2001 Patriot Act against a virtual currency, the Treasury Department invoked a section of the law to choke off Liberty Reserve from the U.S. financial system..." Well, there's your terrorism act, used to control crime via virtual currency. We get scared of one thing, pass a law, and then see it used in a completely different context. The current American kerfuffle involving investigating reporters is tied to a WWI-era law that's almost never used. Amazing the tools American prosecutors have available to them. One could say overbearing, even. ADD2: Nobody is saying they are innocent. The point here is that these guys are being shut down (and they probably need to be shut down) by procedures that have broad application to all kinds of legitimate use as well. These are very broad and powerful tools we've given the state. We should take some time and think about if they need to be more narrowly-focused. The initial Patriot Act had an expiration date. For a reason.

jonknee 13y ago
Obviously few people are going to pipe in and say that they used LD for illegal purposes, but I've read a lot of comments today from people who used it simply because it was cheaper than other options. It makes sense, you could easily make an account and could use it globally and there are a lot of countries without strong banking sectors. It's nuts that the US can step in and shut down a foreign company like this. I understand cracking down on any of the exchangers that operated in the US, but it's really not the US's business if foreign parties in foreign countries exchange money with a foreign company.
- eurleif 13y ago
  >it was cheaper than other options What if the only reason it was cheaper for legal uses is that they were being subsidized by the illegal uses? What if the pricing LD offered would not have been a workable business model if they hadn't allowed money laundering? (I don't know the facts here. I'm just offering a possibility.)

fragsworth 13y ago

HSBC got away with paying a fee of under $2 billion for not monitoring $60 trillion worth of wire transfers. They made a profit of something like $15 billion during that year, so their fines barely even touched their profits. The moral of the story here is if you're going to launder money, you should launder a whole shitload of it. Because then you only have to pay a tiny percentage worth in fees. If you don't launder enough, you'll end up broke and in prison. Imagine if this kind of logic applied to other crimes. You could have a sex slave operation with one prostitute and get caught and go to jail for the rest of your life. But if you run a massive sex-slave industry with tens of thousands of slaves (children for the hell of it), and made $10 billion a year, you'd occasionally get a fine of 10% of your profits that year and be allowed to continue on as if nothing happened...?

taliesinb 13y ago
> if you're going to launder money, you should launder a whole shitload of it Yes. Or rather, if you're going to launder money, make sure you're making healthy campaign contributions, hiring ex-politicians and their staffers as lobbyists, oiling the great lobbying machine, etc... For those who haven't read it, Lessig has written a rather nice book on exactly how this kind of "soft corruption" works: http://www.amazon.com/Republic-Lost-Money-Corrupts-Congress/dp/0446576433 http://www.amazon.com/Republic-Lost-Money-Corrupts-Congress/...
- contingencies 13y ago
  For a more visual equivalent (lower attention span required) check out http://topdocumentaryfilms.com/money-lobby/ http://topdocumentaryfilms.com/money-lobby/
wnight 13y ago
Go out in the desert with one captive and torture them and we'd try to stop you. Enslave a few million and successfully arm yourself against potential rescuers and you meet all the accepted standards of a sovereign nation.

mattbarrie 13y ago

Looks like they are circling MtGox. Technocash is the bank account mentioned here: http://www.smh.com.au/it-pro/security-it/westpac-caught-up-in-worlds-biggest-money-laundering-sting-20130529-2naa8.html http://www.smh.com.au/it-pro/security-it/westpac-caught-up-i... Not many ways into MtGox now. From MtGox: Transaction Limits Deposits All methods below do not have deposit limits: Bitcoin - For everyone. LibertyReserve - Through AurumXchange and Bitinstant only OKPAY - For everyone has an OKPay account. Japanese Domestic Transfer - For Japanese residents who have a "verified" account with us. Technocash - Only for Australian residents who have a "verified" account. Wire - For "verified" or "trusted" account status. Please note that we are unable to accept funds coming from any entity or country listed by the OFAC* SEPA - In order to make Euro deposits you need to have a "verified" or "trusted" account status. To check if your account has been "trusted" or "verified" please visit: https://mtgox.com/forms/verification https://mtgox.com/forms/verification to apply.

bdcravens 13y ago

If 30 years ago it had been known that the Internet could be used for child pornography or communicating about blowing up important buildings, I wonder what today's world would be like if today's mindset had been prevailing then.

linuxhansl 13y ago

Those alleged 6 bn sound a lot like the fictitious $150k per illegally copied songs or the x bn the music industry allegedly loses due to illegal downloading.

DigitalSea 13y ago

I knew once the likes of the Wall Street Journal and New York Times started writing about Bitcoin it was only a matter of time before the Government initiated its plan to discredit and eventually make the anonymous and decentralised currency illegal. "We need a way to publicly discredit this non-controllable currency alternative without raising suspicion" "Well sir, I have a plan. How about we tell the public only criminals are using Bitcoin to launder money, criminals are selling guns and drugs to students and paedophiles are using it to sell child pornography. We'll make the public eventually beg us to ban this currency and when people complain we are being unreasonable or have ulterior motives we can proudly say we are only doing what you asked us to" First and foremost money laundering isn't a new practice. Mobsters in the 20's were laundering money, Laundromats, cafes and nightclubs are perfect fronts for money laundering operations as well. Yes, no doubt Bitcoin is being used for nefarious purposes (look at Silk Road for a perfect example), but lets not lose our cool over this. What we are starting to see is a coordinated effort by the US to remove the threat that is Bitcoin. While I have no conclusive proof that is the case, it's not rocket science that too many people benefit from the current monetary system to not want to see it become less relevant or have its dominance threatened in any way, way or form. The powers that be didn't think much of it in the beginning, but Bitcoin is starting to gain a lot of traction, not to mention we are starting to see the currency stabilise.

chii 13y ago
i hate to admit it, but where there is smoke, there is fire. I predicted that the financial elites who owns the banks and control cashflow (such as the holders of shares of the privately owned fed reserve) would not want a form of currency they cannot debase at their will. Gold was first to go in the 70's, and now bitcoin, having similar properties of gold, is on the crosshairs. I can only just hope the general public has enough sense to see through propaganda. Bitcoin survival depends on it going mainstream, and its the one weakness no technology can solve.

brownbat 13y ago

"Mr. Bharara said the exchange’s clientele was largely made up of criminals, but he invited any legitimate users to contact his office to get their money back." http://www.nytimes.com/2013/05/29/nyregion/liberty-reserve-operators-accused-of-money-laundering.html http://www.nytimes.com/2013/05/29/nyregion/liberty-reserve-o... Not sure how that would work, you might just be charged with conspiracy.