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US Indicts Suspected Russian 'Mastermind' of $4 Billion Bitcoin Laundering Scheme (reuters.com)

Posted by BeauHD on from the dirty-laundry dept.

schwit1 shares a report from Reuters: A U.S. jury indicted a Russian man on Wednesday as the operator of a digital currency exchange he allegedly used to launder more than $4 billion for people involved in crimes ranging from computer hacking to drug trafficking. Alexander Vinnik was arrested in a small beachside village in northern Greece on Tuesday, according to local authorities, following an investigation led by the U.S. Justice Department along with several other federal agencies and task forces. U.S. officials described Vinnik in a Justice Department statement as the operator of BTC-e, an exchange used to trade the digital currency bitcoin since 2011. They alleged Vinnik and his firm "received" more than $4 billion in bitcoin and did substantial business in the United States without following appropriate protocols to protect against money laundering and other crimes. U.S. authorities also linked him to the failure of Mt. Gox, a Japan-based bitcoin exchange that collapsed in 2014 after being hacked. Vinnik "obtained" funds from the hack of Mt. Gox and laundered them through BTC-e and Tradehill, another San Francisco-based exchange he owned, they said in the statement.

99 comments

  1. And in next weeks news by Anonymous Coward · · Score: 1, Funny

    We will find out he met with the Kush and Jr last year. The Mooch will deny it happened right before Jr posts the entire email chain on twitter.

    1. Re: And in next weeks news by Brockmire · · Score: 1

      Is this a legit BeauHD post? Obvious spelling mistake? Check. Yep, checks out.

  2. Suspected of not being HSBC. by Anonymous Coward · · Score: 4, Insightful

    You can launder as much crime money as you want if you are a bank.

    1. Re:Suspected of not being HSBC. by torkus · · Score: 1

      No no no...you can't do that!

      You have to follow all the anti-money-laundering rules first and launder your money through the gaping holes in the 'advanced' software and algorithms they use.

      Oh wait... :)

      --
      You can get rich if you own a politician, but you have to be rich to buy one in the first place.
  3. Re:It's such a shame... US should not own world by TheSunborn · · Score: 2

    Considering the number of people who failed at securing their coins, it's reall difficult.

  4. Bitcoin needs to be illegal to own. by DalM · · Score: 1, Flamebait

    Sorry libertarians. We tried it and all it's brought us is pain for everyone including and especially those that didn't play the game. It's hard to imagine how Ransomware would work without crypto currency.

    1. Re:Bitcoin needs to be illegal to own. by Anonymous Coward · · Score: 1

      It's hard to imagine how Ransomware would work without crypto currency.

      Things can rarely be uninvented. Criminals don't generally care if something is illegal, either. Good luck, champ. -PCP

    2. Re:Bitcoin needs to be illegal to own. by Anonymous Coward · · Score: 0

      Ransomware has existed for a long time and was making good money long before cryptocurrency existed.

    3. Re:Bitcoin needs to be illegal to own. by Hentes · · Score: 4, Interesting

      Now I'm not a fan of many aspects of of BTC. The fact that there's a finite number of coins lead to a gold rush and speculation bubbles instead of a stable growth, and for all the big plans about replacing all the money in the world the system scales very badly. But it's definitely not a "currency" designed for crime. Every BTC transaction is broadcast to the whole internet, making it much more traceable than paper money. The problem is not BTC, but that BTC laundries are allowed to operate due to the technical and general incompetence of financial authorities. These places have existed for years and did their business quite openly, some of them are literally calling themselves laundries. I'm surprised a crackdown took so long.

    4. Re:Bitcoin needs to be illegal to own. by Anonymous Coward · · Score: 0

      It was also far more traceable. But you already knew that.

    5. Re:Bitcoin needs to be illegal to own. by DalM · · Score: 0

      Exactly. With real money there is either a legitimate bank involved (knowingly or not) or there is a cash drop. Either way, it's pretty easy for the feds to track and shut down. Crypto currenty makes ransomware a sure thing for the bad guy

    6. Re:Bitcoin needs to be illegal to own. by Anonymous Coward · · Score: 0

      ... it's definitely not a "currency" designed for crime. Every BTC transaction is broadcast to the whole internet, making it much more traceable than paper money.

      Which is why all the ransomware (payable in bitcoin) cybercrooks have been traced and arrested(?)

    7. Re:Bitcoin needs to be illegal to own. by DalM · · Score: 0

      You don't have to uninvent it. And we don't need a special anti-bitcoin task force breaking into people's homes. But if you make it illegal to buy/sell/hold then the vast majority of people will dump it and it will give the police another easy win against the bad guys. ("I didn't find any drugs as your place, but I did find $10k in bitcoin. Want to explain that?")

    8. Re:Bitcoin needs to be illegal to own. by DalM · · Score: 1

      If it's not a currency designed for crime and so easy to trace, why is it so freakishly popular with criminals?

    9. Re: Bitcoin needs to be illegal to own. by Anonymous Coward · · Score: 1

      How do you find Bitcoin? Stuffed into the mattress?

    10. Re: Bitcoin needs to be illegal to own. by Anonymous Coward · · Score: 0

      It's not a fraction as popular as real cash. Perhaps you could start advocating we ban that.

    11. Re:Bitcoin needs to be illegal to own. by Applehu+Akbar · · Score: 1

      The fact that there's a finite number of coins lead to a gold rush and speculation bubbles instead of a stable growth,

      How would a cryptocurrency work without a limit on the number of units in circulation? Real currencies are managed by central banks, whose job it is to maintain a reasonable ratio of unit value to what the currency trades for. Private currencies work only if the unit is expressed as a specific tradable commodity, like gold, and because cryptocurrencies are not externally managed at all, they work only if the money supply is algorithmically limited.

      Real currencies are ideally managed to grow at the same rate that the country's economy as a whole grows (zero flation). This is really difficult to achieve in practice. Most currencies grow faster than the underlying, because that's politically the easy way out, causing them to inflate (it keeps taking more units to buy a loaf of bread). A few currencies, like the Swiss franc, grow more slowly than the economy (bread keeps getting "cheaper," or deflation). This is what is happening with BTC.

    12. Re:Bitcoin needs to be illegal to own. by Anonymous Coward · · Score: 0

      Yeah great idea! Better yet all numbers on computers should be illegal to own! Those pesky cryptographic numbers are baaaad.

    13. Re:Bitcoin needs to be illegal to own. by Anonymous Coward · · Score: 0

      It hasn't brought me any pain and it's turned a business more profitable. Your also an idiot for thinking that ransomware somehow only exists if Bitcoin exists and it's really sad that you think those who've committed no wrong to another should somehow suffer just because others utilize it in the process of wronging someone. I guess we should charge you for using cash or having a credit card. Both cash and credit cards are used in the process of crime no different than Bitcoin.

    14. Re: Bitcoin needs to be illegal to own. by DalM · · Score: 1

      On a cellphone.

    15. Re: Bitcoin needs to be illegal to own. by DalM · · Score: 0

      Actually I do think we should stop printing cash and do all financial transactions through licensed banks. I've basically been doing that my entire life. (You probably have too.)

    16. Re:Bitcoin needs to be illegal to own. by DalM · · Score: 0

      You could try to make a rational argument as to why you disagree, but this is the internet.

    17. Re:Bitcoin needs to be illegal to own. by Anonymous Coward · · Score: 0

      There is something called a mule. A mule is a person who does something on behalf of another person. It's little different than an employee. That mule ultimately disguises where that cash end ups.

      There are a lot of poor people and the idea that criminalizing mules will somehow magically solve the problem is a joke. Most people aren't going to even know about the risks involved enough to not go there. When food in ones belly is important one takes risks even if they know there could be trouble.

      What is more amazing is the stupidity of some of the people at the top of the food chain. It would be so easy to launder money such that it can't be traced back easily and systems secured reasonably well at that. The people being charged are either really stupid or there is a lot of parallel construction happening. I wouldn't be surprised if it was a combination of both.

    18. Re:Bitcoin needs to be illegal to own. by Anonymous Coward · · Score: 0

      It works by floating, like the value of gold or the value of silver. It's not tied to an economy. Which economy / inflation rate should it be associated to? The US? China? The world economy as a whole?

      There are a lot of interesting ways how bitcoin works. It can be a currency sometimes for some people, or a commodity other times, for other people.

    19. Re:Bitcoin needs to be illegal to own. by shaitand · · Score: 1

      "We tried it and all it's brought us is pain for everyone including and especially those that didn't play the game."

      What pain? Bypassing things governments don't approve of that could generate money to launder is part of the point and isn't pain for actual people.

    20. Re:Bitcoin needs to be illegal to own. by shaitand · · Score: 1

      It's easy to launder some money, but at the extremes it becomes challenging. It is actually quite difficult to launder ten grand because it'll cost you most or all of it to get set up properly. It is also quite difficult to launder $4 billion.

    21. Re:Bitcoin needs to be illegal to own. by shaitand · · Score: 1

      Every single digital fragment of bitcoin from origin to current holder is completely and totally recorded in a ledger that anyone can connect to the network and download and analyze. However, every step on the path is essentially a massive random account number. Nothing in the system tells you who has what number, which sets of numbers are the same etc. However tracking known addresses and monitoring transaction activity can paint a picture pretty quickly. That is what "metadata" is all about.

    22. Re: Bitcoin needs to be illegal to own. by shaitand · · Score: 2

      If you have nothing to hide you won't mind if we take a look? Pass.

      I think we should make everything which is convenient like digital deposits and spending for example available with all the convenience features, including universal or near universal acceptance at merchants and vending systems available in a completely anonymous and untraceable format divorced from all government oversight. Then provide the same stuff in a completely identified and traced format and let people vote by choosing which they prefer.

      Same thing for phone/internet/gps/etc. Everything that the government puts hooks in and claims people choose the hooks, give people all the same features, capabilities, and conveniences without the hooks.

      Just because I take a flight to get somewhere faster doesn't mean I'm choosing to get molested in the TSA security dog and pony show, nobody can be said to be choosing that unless you offer all the same flights sans TSA and people still choose to TSA flights.

      My guess is that if the options were truly made equal you wouldn't find many people using your banks, internet, phones, and flights if they could have the same services without your TSA, NSA, IRS, etc. Those would effectively be votes from the majority of the population and in a democracy that is supposed to mean those things go away.

    23. Re:Bitcoin needs to be illegal to own. by Hentes · · Score: 1

      You set the proof of work so that the amount of work required grows as fast as Moore's law.

    24. Re:Bitcoin needs to be illegal to own. by shaitand · · Score: 1

      "How would a cryptocurrency work without a limit on the number of units in circulation?"

      Central banks don't use voodoo to determine whether or not to raise rates. They use fairly simple math wrapped up in a lot of subjective nonsense that is only there to leave lots of lots of wiggle room for manipulation to serve personal agendas.

      But there is no reason you couldn't use an algorithm to keep transactions fluid and even assign credit scores to bitcoin addresses and distribute new coin through the credit system. Attach some sort of simple feedback mechanism, say thumbs up/thumbs down, the person sending funds pays a small fee for the transaction based on the current rate and this is how funds are removed from the system. Each payment made is a raffle ticket in the distribution of new coin when the algorithm looking at transaction volume determines that is needed. Not only does everyone have a better chance of breaking even on the currency adjustments but you automatically put money into the hands of those who are most active and are most likely to spend it.

    25. Re: Bitcoin needs to be illegal to own. by Anonymous Coward · · Score: 0

      You want to have services without TSA/ NSA/ IRS/ FBI bothering you? Go go Russia.

      Of course, they got their FSB/ KGB/ WTF... Plus, you might get your ass frozen a bit.

       

    26. Re: Bitcoin needs to be illegal to own. by shaitand · · Score: 1

      "Of course, they got their FSB/ KGB/ WTF... Plus, you might get your ass frozen a bit."

      Yup, same shit plus frozen testicles. Like I said, no options.

    27. Re:Bitcoin needs to be illegal to own. by Anonymous Coward · · Score: 0

      >It's hard to imagine how Ransomware would work without crypto currency.

      Not hard for me at all. Find a country that doesn't give a shit (Nigeria). Open up a storefront beside the airport. Distribute ransomware. Ransomware explains how you will be taking a flight to Nigeria and dropping off a ton of cash at the storefront to get your crypto key.

      Local authorities ignore it the same way they ignore 419 scams that operate largely the same way.

      Done.

      Of course, they won't get money from the home gamer. Then again, the serious ransomware that demanded $10k+ wasn't getting that money, anyways. And yes, I really do think that if you managed to encrypt all of, say, a major bank's customer's details, they probably WOULD hire a courier in Nigeria to drop off real cash. If they'd pay by bitcoin, they'd do that, too.

      Also bitcoin has never brought me any pain. But that's because I'm not a retard that gets his computer ransomwared. In fact, bitcoin has turned out to a convenient payment method for plenty of stuff.

    28. Re:Bitcoin needs to be illegal to own. by Zemran · · Score: 1

      Ransomware does not work with crypto currencies so I fail to see the analogy. All legitimate exchanges will close the account of such criminals and in the recent famous wave of malware people could not pay the ransoms because the accounts were closed. All this sort of stupidity will do is push it underground and stop reasonable people from being able to benefit from the latest secure currency. As illegitimate exchanges spring up the ransomware makers etc. will be the main beneficiaries of such laws. The problems with you Luddites is that you have no idea what you are objecting to. Crypto currencies are so much better than the current debt based economy that the banks are running scared from the real threat they pose. So most of the dumb propaganda is just that. Countries like Japan and South Africa can see the benefits but the US is run by the banks and would rather the country suffered than the banks lose some business.

      --
      I love stacking my barbecues in the shed at the end of summer - you can't beat a bit of grill on grill action.
    29. Re:Bitcoin needs to be illegal to own. by Zemran · · Score: 2

      No, anyone with experience of the real benefits of crypto currencies is not going to let some law stop them from doing something that there is no justification in making illegal. No one is going to dump it, they will just continue to trade, as they do now, in foreign exchanges. You do not find $10k in bitcoin. It is not a physical object. There is nothing to explain as there is nothing to find. The problem with armchair warriors is the that they honestly think they know what they are talking about. I am currently moving my business to bitcoin because I do know what I am talking about. I would rather stop using Visa and Mastercard than stop using bitcoin and stupid laws will not stop that as my servers are outside the US. I would rather leave the US than go bankrupt. Your weird idea that bitcoin is for criminals only shows how little you understand the subject as other countries are accepting bitcoin for utility payments etc. To everyone else in the world it is stupid to pay fees to Visa and Mastercard for something that can be free.

      --
      I love stacking my barbecues in the shed at the end of summer - you can't beat a bit of grill on grill action.
    30. Re:Bitcoin needs to be illegal to own. by Zemran · · Score: 1

      Not true. Most illegal money is stored in things like Delare Corporations in the US because the US banks are the best place to launder money. The government only arrest people who use other banks. The feds do not shut down drug cartels etc. that use US banks only ones that use Panama banks. Again, numbnuts, ransomeware gets stopped by bitcoin exchanges.

      --
      I love stacking my barbecues in the shed at the end of summer - you can't beat a bit of grill on grill action.
    31. Re:Bitcoin needs to be illegal to own. by Zemran · · Score: 2

      Laundering money is easy and does not involve banks or flights as the media wish to teach you. The reason why they tell you that is so that they can regulate how much money you can carry etc. and force you to use the banks and pay. I first looked at this when I was working in the middle east and earning a lot of money. To send it home would cost 6-10% of my money. Why? If I carry my money a plane I am accused of money laundering... Why? The government force you to pay your money to the bank by telling you that they are stopping money laundering, bullshit. Real money laundering is far easier. You start a business and it does very well. The business does not need to actually do anything except make money from strangers who you give receipts to but as they are never seen again neither are the receipts. You can make so much in the first month that you can use that profit to buy a bigger business etc. In Chiang Mai in Thailand, Yingluk Shinawatra owned a shopping mall that had a complete staff but no working shops. On paper it was earning a fortune all tax paid and used to legally buy property in the UK. The money does not travel until after it is laundered through the shopping mall. She sold the shopping mall when she became prime minister. Other people have resorts etc. You do not more the money until after it is laundered. Bitcoin cannot help you as that is a store. In reality bitcoin is bad for criminals as it is traceable just like all P2P. In Denmark the police arrested a drug dealer based on bitcoin payments. The blockchain is public and you can follow a payment to the exchange at the other end and arrest the person who receives it. It is only hidden while it remains in the chain.

      --
      I love stacking my barbecues in the shed at the end of summer - you can't beat a bit of grill on grill action.
    32. Re:Bitcoin needs to be illegal to own. by Zemran · · Score: 2

      There are criminals that know as little about it as you do. The blockchain is public, anyone can look at it and the police can see where money goes in and where money comes out. Bitcoin is not secret. https://darkwebnews.com/bitcoi...

      --
      I love stacking my barbecues in the shed at the end of summer - you can't beat a bit of grill on grill action.
    33. Re: Bitcoin needs to be illegal to own. by Zemran · · Score: 1

      You are welcome but you are not welcome to stop me from doing my legitimate business using bitcoin. I do not see why I should pay between 6-10% to the banks when I can do business for 1%. Yes, criminals can use bitcoin just like they can use cash but that does not justify making it illegal any more than saying that peadophiles sometimes use hotels so we should make hotels illegal. It is a total fallacy. There is no real link between criminals and bitcoin, in fact the opposite.

      --
      I love stacking my barbecues in the shed at the end of summer - you can't beat a bit of grill on grill action.
    34. Re: Bitcoin needs to be illegal to own. by Anonymous Coward · · Score: 0

      You're a bit late. Most of the avid long term fanatics have already got rich from it. If you think they were buying purely for moral reason oh well. The real suckers are the people that paid big money for it. The sooner they sell them on to the next suckers, the better.

    35. Re:Bitcoin needs to be illegal to own. by Anonymous Coward · · Score: 1

      I think the problem is that you have never been accused falsely for committing a crime and sentenced by uncaring court. This particular case may or not be of a major criminal. Maybe the guy was. Maybe US is trying to establish a precedence to show that there is no escape. If the US justice system were in a good shape this may be less morally problematic but as it is I just do not believe that US has any moral justification to do that. The only reason they do it is because they can. I would love if the spam, malware etc producing groups were focus of justice systems all over the world. This would mean however that some of state agencies would have to be excused or their agents prosecuted.

    36. Re:Bitcoin needs to be illegal to own. by Anonymous Coward · · Score: 0

      You do know that for each transaction you do you change your wallet-address and there is no easy way to trace this.

      It will look something like if you do a single transaction to a company.
      addr1(10btc) -> ( addr2(2btc), addr3(8btc) )
      and you don't know if addr2 or addr3 would be the new wallet or destination address. All you know is that some BTC moved from one address to two other BTC addresses.
      Most important part here would be to always use new keypairs for the destination-address(es) to make it harder to trace..

      The destination address to the company will be generated on the fly by the recipient to allow for simple detection of when the transaction has been performed.
      Try to trace something that has been going thru a couple of tumblers, and ending up in a few 100 different wallets.. On top of that do a couple of transfers in/out of a few exchanges located in a few different jurisdictions.. And then for withdrawing money using https://localbitcoins.com/ and getting cash...

      Unless you are someone really sought after it will cost more to trace that than it's worth..
      There have been quite a few articles about how bitcoins has been traced, but also different ways to obscure who's the actual owner of said coins...

      I'm not saying it's completely secure and anonymous, but it can be anonymous enough depending on how it's used and how big of a target you have painted on yourself.

      One of the latest anonymization techniques available you can find here:
      https://news.ncsu.edu/2017/02/...

      But if you want to stay fully anonymous:
      - Use TOR when announcing transactions.
      - Always generate new wallets at transaction-time.
      - Don't pay for services that can be linked back to you..

    37. Re:Bitcoin needs to be illegal to own. by shaitand · · Score: 1

      All true but none of it changes what I said. Laundering $2000 is difficult and so is laundering $4 billion. A shopping mall with complete staff and no working shops is millions, not billions. And it is a great deal more difficult than you make it seem. Having a legitimate business and operating in a manner that doesn't cost you haf of it in taxes is difficult, creating a back trail and cover for billions in a way that doesn't eat everything in the tax mill is very challenging indeed.

    38. Re:Bitcoin needs to be illegal to own. by shaitand · · Score: 1

      All of those extra steps are not actually part of the bitcoin, there are measures you can take to be anonymous with any currency.

      It is possible to trace despite that in many cases. Just like almost everything you see on CSI rarely happens in the real world because real police can't spare the lab resources (which are typically FBI, not in house).

      That said, when it comes to evidence police and courts have a tendency to ignore the innocent until proven guilty thing. Claim you don't have the key to decrypt your laptop after a court orders to supply it. Wait and see if the court assumes you are innocent and don't have the key until the prosecution proves otherwise. You'll see the same thing when you claim that other address wasn't you, or that middle address in the forensic chain which bought the drugs wasn't you. Forensic accounting is almost never possible to actually prove or verify, just patterns that create the appearance of something happening, yet it is accepted anyway.

    39. Re:Bitcoin needs to be illegal to own. by ElizabethGreene · · Score: 1

      The transparency breaks in exchanges like BTC-E, MtGox, etc. Money goes in one address and pops out another clean as a whistle. That's why the SEC, FTC, and DOJ want visibility into those.

    40. Re:Bitcoin needs to be illegal to own. by Anonymous Coward · · Score: 0

      It's only a matter of time until the FED makes their own crypto currency and makes it very easy to people using other crypto's to convert to it, or the FED forces people over to it. People can not allow that to happen under ANY circumstances.

      Once the government has any level of control over it, they can track you no matter where you are at, and they can prevent you from buying things, or from rebelling, or anything else they desire.

      Freedom will be completely dead.

  5. is BitCoin real now? by turkeydance · · Score: 4, Funny

    because if he took "real" money and exchanged it for "nothing" then he defrauded drug kingpins and they will work faster than the Feds.

    1. Re:is BitCoin real now? by Anonymous Coward · · Score: 0

      because if he took "real" money and exchanged it for "nothing" then he defrauded drug kingpins and they will work faster than the Feds.

      No, it is not real. It's fun to laugh at though.

  6. I bet this guy is really scared. by Anonymous Coward · · Score: 0

    n/t

    1. Re:I bet this guy is really scared. by MachineShedFred · · Score: 1

      Considering that he was arrested and extradited, he just might be. That tends to put a real crimp in your week.

      --
      Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
  7. Doesn't this describe ALL exchanges? by Anonymous Coward · · Score: 0

    I don't get what is different about BTC-e than any other exchange? They all accept accounts and e-coins from anybody and then disperse e-coins.

    Or is it something to do with accepting e-coins then giving back actual fiat money maybe?

    1. Re:Doesn't this describe ALL exchanges? by Narcocide · · Score: 1

      Something to do with getting caught doing it, nothing more.

    2. Re: Doesn't this describe ALL exchanges? by Anonymous Coward · · Score: 0

      Something to with being Russian (anti-Glibalist). Everything more

  8. The lesson we learn today by Anonymous Coward · · Score: 1

    Is that if you do any business that touches the US, you can be picked up willy-nilly on most of the planet. The lesson learnt today is not to do any business with the US.

    1. Re:The lesson we learn today by dasgoober · · Score: 5, Funny

      The Lesson: Do your crime in Russia and stay in Russia.

      It's a big country, don't they have nice beaches ?

    2. Re:The lesson we learn today by Anonymous Coward · · Score: 0

      Nobody is forced to use US banks, use US currency, or financial services but if you do you best read the fine print before you jump in with both feet. Even the Chinese perform a very intricate balancing act when dealing with US banks, financial services, and US backed financial instruments. China buys a lot of US Treasury Certificates and US Bonds because they are some of the safest investments in the world. But when push comes to shove all those investments are nothing more than paper if the US decides not to honor them. China has a lot of cash deposits, investments, and other high dollar assets in the US and pissing off the US is a good way to get all those assets frozen. And since China limits foreign investments and holdings in their own country an economic free for all between the US and China would hurt China a lot more than the US.

      Hell the Chinese "communist" leadership all keep billions of dollars of their personal portfolios in the US just in case they run afoul of their own government and need to make a quick exit. When you hear about the US sanctioning a country it is usually not the country but certain individuals from that country. And if the US really wants to put the screws to someone they can sanction any foreign bank who conducts transactions with these sanctioned individuals. Foreign investment firms have paid out billions of dollars in fines for financial dealings with people sanctioned by the US. The US can pull this off because these firms risk losing access to the US financial networks if they do not play ball. It's heavy handed and bullying by the US but nobody ever said life was fair and who really gives a shit if a bunch of billionaire financiers get smacked down now and then. Countries are still hesitant to invest in Iran because the animosity between the US and Iran pretty much guarantees the US will continue sanctioning the Iranian government in areas not affected by the nuclear agreement signed a couple of years ago and no one wants to put their investments at risk just to do business with Iran.

      "The lesson learnt today is not to do any business with the US."
      If you want to conduct any significant amount of international business you hardly have a choice. For everyone wanting to go without utilizing US banking and financial services there are 10 competitors willing to take their place.

    3. Re:The lesson we learn today by Anonymous Coward · · Score: 1

      According to the summary, he operated businesses in San Francisco. That's more than touching the US

    4. Re:The lesson we learn today by Anonymous Coward · · Score: 0

      There are a fuck ton of people pushing crypto and it took 40 years for credit cards to become universal. It'll be a while... but I say f'c the US government.

    5. Re:The lesson we learn today by Anonymous Coward · · Score: 0

      I think this is an absolutely ridiculous statement. Every country in the world has banking laws, and most of them have a complex set of extradition arrangements with most of the others. It's not like the Navy Seals invaded Greece to get this guy...although we would have if we wanted him badly enough.

    6. Re:The lesson we learn today by rtb61 · · Score: 1

      Do lots of crime all over the place and you become a competitor with the banks and they don't tolerate competition. They are going to have to be super tight on security, this dude is a potential criminal investigation gold mine. Turn over 4 billion in criminal currency (in today's value rather than the original value, nice pump up their boys) and you have a hook into and a record of quite a lot of crime and criminals. I dare say many countries would like to get a hold of this guy and I don't understand why Greece would hand him over, until their criminal justice system has finished with him, assuming the charges are valid and it ain't another US Russia propaganda criminal charge.

      I wonder how much information the guy would have to hand over to end up with a warning, rather than a custodial sentence. Where are the servers and who controls them now and which investigatory agencies can nab them.

      --
      Chaos - everything, everywhere, everywhen
    7. Re:The lesson we learn today by Anonymous Coward · · Score: 0

      > all those investments are nothing more than paper if the US decides not to honor them.

      That would mean WW3. China itself has H-bomb tipped ICBMs and they could also forge a grand coalition with most of the rest of the world (e.g. Russia, South America, Africa) for a global military alliance, where they offer say 20% of the unpaid investments as spoils in exchange for helping them with troops, blockades and embargo.

      USA would be abandoned by her allies as a swinder and shyster and you just can't win against the whole world. It would be like Germany fighting on multiple fronts in WW1 and WW2 and losing both eventually, despite making consistently impressive battlefield performance.

      By the way, the last time anybody tried to realize such a vast swindle scheme as you suggest above was around 1750 in a german electoral duchy, committed by a jew called Suss. He ended up hanging and his story was still poisonous enough to significantly contribute to the drivers of Holocaust almost 190 years later. Consider that historic clue when proposing ideas as dangerous as you just did.

    8. Re:The lesson we learn today by Zontar_Thing_From_Ve · · Score: 2

      The Lesson: Do your crime in Russia and stay in Russia.

      It's a big country, don't they have nice beaches ?

      I think you're kidding, but the answer is actually "Not really". They have Sochi and that's about it. Sochi is a crummy small town that nobody would pay attention to had Putin not developed some kind of rapport for it and elevated it far above its status. It's not the main reason that Russia wanted Crimea back, but I'd say that at least a small component of that land grab was that it has basically served as Russia's version of Florida for quite a long time now. Prior to the takeover a significant portion of tourist traffic in the Crimean beaches was due to Russian tourists.

    9. Re:The lesson we learn today by jabuzz · · Score: 1

      Right because nuking the USA because they froze some treasury bonds is a sure fire way to get them payed up in full!

    10. Re:The lesson we learn today by TeknoHog · · Score: 1

      It's a big country, don't they have nice beaches ?

      They do now, since 2014.

      --
      Escher was the first MC and Giger invented the HR department.
    11. Re:The lesson we learn today by ElizabethGreene · · Score: 2

      The nice beaches are in Crimea.

      Really, they are. :)

    12. Re:The lesson we learn today by PPH · · Score: 1

      Nobody is forced to use US banks, use US currency, or financial services

      Try paying your US taxes in Euros or Bitcoin. Look up the definition of 'fiat money'.

      And try telling this to Saddam Hussein.

      --
      Have gnu, will travel.
  9. Not money, an asset by perpenso · · Score: 3, Insightful

    is BitCoin real now? because if he took "real" money and exchanged it for "nothing" then he defrauded drug kingpins and they will work faster than the Feds.

    According to the US gov, its an asset not money. You can buy, sell and trade assets. Buying/selling bitcoins is sort of like stock, you have to note the value when purchased and sold, report the capital gain or loss. So when you buy that cup of coffee with bitcoin be sure to note the value of those coins when purchased/received, the value spent at, and report the gain/loss to the IRS. Actually, your bitcoin client software should be able to do all that for you. I'm sure BTC-e servers are only down while they implement such support for US clients. :-)

    FWIW, the argument that bitcoin is an asset not a currency is rational. Its currently too volatile to be a store of value. Although they are a convenient way to transfer money. Buy, transfer, and sell; never hold unless you are a speculator.

    Bitcoin is currently only a competitor to PayPal, not the dollar or euro.

    1. Re:Not money, an asset by Anonymous Coward · · Score: 0

      Non-sense. You can ignore for all intensive purposes the IRS on Bitcoin. They're not going after you unless your a big fish. 2nd the currency is both received and spent easily. There is no need to exchange one for the other. I've been using it for years and it's steady rise (even if you spend on the down) still ultimately puts you ahead of those who hold cash. You don't have to be a speculator to hold bitcoin. I regularly have anywhere between hundreds to $5,000 USD worth of Bitcoin. I have only rarely purchased (twice ever) Bitcoin. Once when I spent all my companies Bitcoin and had to issue a refund and another time when I had to pay a car insurance bill personally and had run out of Bitcoin. There are more places to spend Bitcoin than we take in in Bitcoin. I had an employee who was paid wholly in Bitcoin for an entire year. He paid rent in Bitcoin and well, everything else for that matter. I use http://inguard.com/ for car insurance and I am buying a van in Bitcoin this week. I went on a three week vacation across the country and paid for all our hotel stays completely in Bitcoin- though generally I'd say there are more places in New Hampshire to spend Bitcoin than anywhere else... so... electronics... amazon purchases. etc all in bitcoin. and I save about 15-33% on all my amazon purchases through saveatpurse.com. christ. people are really stupid for not using bitcoin.

    2. Re: Not money, an asset by Anonymous Coward · · Score: 0

      Those purposes sure are intense.

    3. Re:Not money, an asset by shaitand · · Score: 1

      "Bitcoin is currently only a competitor to PayPal, not the dollar or euro."

      Fair enough. I still maintain that is a function of the size of the market more than anything. The smaller market makes the impact of speculators more evident. Dollars and Euros have much bigger markets so it takes a lot more to move them an appreciable amount. Also, the value of your dollars relative to euros might have moved enough to buy your kid a car for graduation last night due to speculators but you probably wouldn't know because the units traded on are smaller than the smallest units in circulation, car dealers take longer than that to update prices, and your balance is only going to be shown in one or the other.

      Currency isn't primarily a store of value though, it is a unit for the exchange of value, bitcoin has a number of advantages over dollars and euros in this department. The ultimate killer feature is that bitcoin can't be counterfeited or manipulated by a central authority. That makes it ideal for the exchange of value between national governments, banks, and just people who live in places under different currencies.

    4. Re:Not money, an asset by Zemran · · Score: 1

      I would say that bitcoin is a very real competitor to PayPal but also a competitor to Visa and Mastercard. For me the more the government regulate these people the more attractive bitcoin becomes. A lot of my customers are Russian and the current crazy shit means that getting paid is a problem so I love bitcoin and am moving over. At the moment it is a good time to take the plunge if you want to speculate. Of course it is a risk so do not bet more than you can afford to lose. There has just been a fork in bitcoin so the value has plunged but I think it will rise again (note think=opinion not fact). Many people have made a lot of money on bitcoin but the big money is over. In most of the world it is already mainstream.

      --
      I love stacking my barbecues in the shed at the end of summer - you can't beat a bit of grill on grill action.
    5. Re:Not money, an asset by aaarrrgggh · · Score: 1

      Just wait until you get a tax bill for all your bitcoin sales assuming a zero cost basis and let us know how that goes. You don't have to make much, they just need the data on when you exchange for currency.

    6. Re:Not money, an asset by ElizabethGreene · · Score: 1

      BTC true believer here.

      I don't see BTC as a real competitor to Paypal, Visa, or Mastercard for one big reasons. The transaction confirmation time _sucks_ and is unpredictable.

      I bought some kit with BTC from Overstock and it took hours to confirm in the blockchain even though I put a fat fee on it. That's rubbish compared to a PayPal or CC transaction that is "slow" if it takes 30 seconds.

      The network needs to dramatically increase the block rate if it's going to compete in that space. To me the static 10-minute-per-block target rate was the only major shortsighted design decision Ms. Satoshi made.

    7. Re:Not money, an asset by perpenso · · Score: 1

      If its an online purchase where the goods are to be delivered does waiting for the desired number of verifications matter?

    8. Re:Not money, an asset by ElizabethGreene · · Score: 2

      Yes, the transaction time matters. There are cutoffs times for shipping, and a three hour payment delay can easily make a day of difference on when you get your kit. You might not "feel" that with wait-a-week shipping, but you definitely feel it with next-day and two-day deals.

      If you want to use your BTC for day to day transactions it's worse. Remember the 10,000 BTC pizza? Do you want to wait hours for your pizza transaction to confirm?

  10. Paper trail that crossed different block chains by perpenso · · Score: 1

    I don't get what is different about BTC-e than any other exchange?

    A US based exchange requires clients to properly identify themselves. Like online stock trading companies. Laundering would not be possible since there will be logs of a person exchanging bitcoins for alt-coins. There would be a paper trail that crosses the different block chains, coins fully traced.

    BTC-e may require ID to bull/sell coins for currency but trading one type of coin for a different type of coin, moving "value" from one blockchain to another, requires only an email address, no actual ID. Even if there is a log and if it is provided to the government the person may still be anonymous.

    Short story: the US gov want bitcoin purchases, sales, and transfers to be as well documented as those for stocks when US citizens are involved.

    1. Re:Paper trail that crossed different block chains by Anonymous Coward · · Score: 0

      What bullshit. The US has no business picking up foreign citizens for trading with US citizens. If they don't like it police your OWN citizens and fuck off the rest of the world.

      --US citizen

    2. Re:Paper trail that crossed different block chains by shaitand · · Score: 1

      Agreed. US rules for entities which exchange currency for fiat should not apply anywhere but the US.

  11. Clarification please by sit1963nz · · Score: 3, Insightful

    How can a US Jury indict someone ?

    Surely even in the US indict mean "arrest and charge", so I am not sure how a jury can be involved.

    In a trial, yeah sure have a jury, but before a trial ???

    1. Re:Clarification please by Anonymous Coward · · Score: 0

      It seems you're unaware of the term grand jury. -PCP

    2. Re:Clarification please by sysrammer · · Score: 2

      AC is correct, though TFA didn't specify. Here you go, without the snark. grand jury

      --
      His ignorance covered the whole earth like a blanket, and there was hardly a hole in it anywhere. - Mark Twain
    3. Re: Clarification please by Anonymous Coward · · Score: 0

      âGrandâ(TM) Jury does indightments. Thatâ(TM)s their only job until their service is up.

  12. Suspected Russian by Anonymous Coward · · Score: 0

    Was the headline written after a suspected White Russian?

  13. remind me why... by Anonymous Coward · · Score: 0

    We are arresting people on foreign soil again?

  14. Running exchange is a crime organization? by Anonymous Coward · · Score: 0

    Then Wall Street folks should be first to be put on trial. Hopefully Greece lets this guy go because this is nonsense.

  15. Bitcoin is vulnerable to attack by perpenso · · Score: 1

    The ultimate killer feature is that bitcoin can't be counterfeited or manipulated by a central authority.

    Yes, it can. 51% Attack, Majority Hash Rate Attack.

    "To date, Ghash.io has twice come dangerously close to obtaining 51% of the bitcoin network's hashing power. The popular pool was able to gain 42% of the network in January, and, just last week, the pool reached a worrying 50%. In theory, obtaining a majority of network power could potentially enable massive double spending and the ability to prevent transaction confirmations, among other potentially nefarious acts. However, despite widespread concern about the vulnerability of the bitcoin network to large mining pools, there remains no easy solution to the issue." Jun 20, 2014
    https://www.coindesk.com/51-at...

  16. money laundering tutorial, plz by Anonymous Coward · · Score: 0

    Is there a how-to guide for:
      - laundering ill-gotten gains. purchasing things without provoking a tax audit.
      - preventing savings from being seized by the gov't (civil asset forfeiture or punitive prosecution)

    Libertarians strut around saying "taxes are theft" but don't seem to be doing the work. Only criminals are doing it. And when it comes to hacking, we are all about sharing knowledge: just because I want to know how these things are done doesn't mean I want to do them. In fact, if I will get arrested in Greece for failing to _prevent_ money laundering, then I think I need to know how to do it.

    Ask slashdot: How does one launder money?

    1. Re:money laundering tutorial, plz by almitydave · · Score: 1

      Ask slashdot: How does one launder money?

      I typically just forget to take it out of my pocket before putting my pants through the wash.

      --
      my, your, his/her/its, our, your, their
      I'm, you're, he's/she's/it's, we're, you're, they're
  17. I hope they execute him by slashmydots · · Score: 1

    I lost 45 BTC at Tradehill when they got shut down and narrowly avoided getting hit by the MTGox shutdown. I just last week took my remaining funds out of BTC-E too! Fool me once, shame on you, Fool me twice, just kidding that will never happen and I hope this asshole gets executed.

  18. EXCUSE ME by Anonymous Coward · · Score: 0

    Excuse me, but didn't the SEC just NOW declare crypto currencies something they could regulate? This guy would have to of been charged?

    This looks like another case of the government doing something, and making it legal AFTER THE FACT.

    Fuck the SEC. If I want to do business in a crypto without their special provisions, I will do so. As somebody else said: "We WILL NOT allow the government to seize more control especially over crypto currencies, even to the point of a shooting war."

  19. Re:It's such a shame... US should not own world by Anonymous Coward · · Score: 0

    This is a prime example of why everybody needs to avoid all crypto currencies that can be tracked via block chain, or have a single point of failure at a corporation or government control.

    Those in power can track down and eliminate their enemies financially, at any time for ANY reason.

  20. Re:It's such a shame... US should not own world by Anonymous Coward · · Score: 0

    When it's a formal published paper then spelling and punctuation is important, but forums like this are a CONVERSATION. You need to get over it.

  21. Re:It's such a shame... US should not own world by Anonymous Coward · · Score: 0

    When it's a formal published paper then spelling and punctuation is important, but forums like this are a CONVERSATION. You need to get over it.

    Also it matters in magazine articles, newspapers, and conversations among people who respect each other.

    The thing is that the poster that began with "It's such a shame" said several ignorant. Spelling was just the first thing in the list, but that's all you seem to have noticed. Why is that?
    Bad spelling and grammar is the mental equivalent of farting or picking your nose on an elevator. It is rude, inconsiderate, and almost always done by retards.
    Nobody wants to have to read something twice just to figure out what the writer actually meant instead of what he actually typed.
    Sure there are stupid people that use correct spelling and grammar, and their stupidity gets pointed out as well.
    Retards can be that way all they want to, and perhaps their friends are the same way and that's cool too. It's their life.
    But I really do wish they would stay away from Slashdot because they have nothing to offer.