Officials arrest suspect in $4 billion Bitcoin money laundering scheme
arstechnica.com
arstechnica.com
Yes, yes of course. Just like how HSBC physically expanded their teller windows to make it easy for Mexican drug cartels to make cash deposits.
https://www.theguardian.com/business/2012/jul/17/hsbc-execut...
I can't seem to find any mention of this in the linked article?
From a Rolling Stone article --
The banks' laundering transactions were so brazen that the NSA probably could have spotted them from space. Breuer admitted that drug dealers would sometimes come to HSBC's Mexican branches and "deposit hundreds of thousands of dollars in cash, in a single day, into a single account, using boxes designed to fit the precise dimensions of the teller windows."[0]
[0] http://www.rollingstone.com/politics/news/outrageous-hsbc-se...
The one thing does not exclude the other.
It is entirely possible that previous windows were too small and, after they were enlarged, in order to optimize the deposit operation some special boxes were put in use.
IE everything is entirely possible
From the article reference here: https://news.ycombinator.com/item?id=14857385
The Guardian published something [0]: >In some branches the boxes of cash being deposited were so big the tellers' windows had to be enlarged.
Rolling Stone published something different [1]: > ... Breuer admitted that drug dealers would sometimes come to HSBC's Mexican branches and "deposit hundreds of thousands of dollars in cash, in a single day, into a single account, using boxes designed to fit the precise dimensions of the teller windows."
The one doesn't exclude the other.
What is the problem?
[0] https://www.theguardian.com/business/2012/dec/14/hsbc-money-...
[1] http://www.rollingstone.com/politics/news/outrageous-hsbc-se...
> 50. The Department alleges, and HSBC Bank USA and HSBC Holdings do not contest, that, beginning in 2008, an investigation conducted by HSI’s El Dorado Task Force, in conjunction with the U.S. Attorney’s Office for the Eastern District of New York, identified multiple HSBC Mexico accounts associated with BMPE activity. The investigation further revealed that drug traffickers were depositing hundreds of thousands of dollars in bulk U.S. currency each day into HSBC Mexico accounts. In order to efficiently move this volume of cash through the teller windows at HSBC Mexico branches, drug traffickers designed specially shaped boxes that fit the precise dimensions of the teller windows. The drug traffickers would send numerous boxes filled with cash through the teller windows for deposit into HSBC Mexico accounts. After the cash was deposited in the accounts, peso brokers then wire transferred the U.S. dollars to various exporters located in New York City and other locations throughout the United States to purchase goods for Colombian businesses. The U.S. exporters then sent the goods directly to the businesses in Colombia.
That this system is entirely to keep up appearances is blatantly obvious, but such a large percentage of the population is making a killing on real estate they have less than zero interest.
They couldn't even implement FATCA in time, and government allowed the deadline to be pushed pushed forwards...
The person arrested is allegedly named Alexander Vinnik, according to https://thebitcoinnews.com/alexander-vinnik-admin-btc-e-arre... - but no idea where they got that name from.
http://www.reuters.com/article/us-greece-russia-arrest-idUSK...
Update: never mind, Russian press says he's Russian, a former employee of Skolkovo techno park.
HSBC has none of these properties (Which are more important to their legitimate users.)
No one thinks "It could happen to me" until it's too late. Stop keeping coins on exchanges. Stop using third party wallets and other software. If you want to invest in coins because they might go up, that might make sense, but at least treat it like a serious investment.
It's just a sign that cryptocurrencies are new (and insecure) that I can't do the same with them.
When I open a trading account on a stock exchange, it's not longer my money. I've loaned it.
I do have more confidence that its owners won't be arrested for money laundering, followed by all my funds dissapearing to a Bahaman slush fund, though.
In another thread (About the SEC regulating ICOs), there were a number of people encouraging investment into and downplaying the risk of unregulated, opaque financial securities ran by persons not based in the US. Rail against the SEC all you want, but events like this are why it exists. Fraud erodes trust in the market.
If you keep margin disabled, you'll eventually get it all back even if the brokerage goes bankrupt.
During the financial crisis, I asked a broker to disable margin on my account (never used it anyway). It took weeks before that happened. Some "technical holdup" that they assured me had nothing to do with loaning or pledging the contents of my account.
Since you have to use an exchange to obtain or sell crypto currency, this 'advice' is just pointing out the terrible flaws in bitcoin/ethereum/whatever. There will be plenty of users who were in the middle of cashing in/cashing out and have now lost all their money, and you're just saying "it's your own fault"
Currency exchangers have been around for a very long time and there's nothing inherently bad about depending on one. All the other currencies do.
For those among us that want to ignore the long history of banking and coinage in general, some depositors in greece may have recently seen similar analogues to why banking in a particular locale turned out to be a very bad idea.
Though you'll have people debate the relatively philosophical differences all day compared to the parties who have ended up on the wrong sides of the above.
What I'm more interested in is: how does all of this change the landscape of incentives of actors of all sizes, and what capabilities does it give to such that weren't accessible to such (or any) degree compared to before?
The site has always hidden its origins, and the only information I could find was that the founders' names are supposedly Aleksey and Alexander, based on https://www.coindesk.com/btc-e-recent-issues-caused-surge-us...
>As for where the criminals are cashing out, 95 per cent of ransom funds were cashed out at the Russian exchange BTC-E. That chimes with the indication that the biggest ransomware types are the produce of the biggest organized criminal gangs working out of Russia.
https://www.forbes.com/sites/thomasbrewster/2017/07/25/googl...
>BREAKING: Russian man arrested in Greece connected to BTC-e cryptocurrency exchange - sources
https://twitter.com/ReutersTech/status/890232366320553984
UPD
>A Russian national arrested in Greece on Wednesday on suspicion of laundering criminal funds by switching them into bitcoins is a key person behind the BTC-e crypto-currency exchange, two sources close to the exchange told Reuters.
http://www.reuters.com/article/us-greece-russia-arrest-bitco...
BTC-E was famous for it's one word replies to technical support tickets like "works" and "try" when he wanted you to try something again, and of course the troll box on the front page that was a never ending source of problems like naive users being fished for information on their account details or tricked into pumping up the value of some altcoin.
Murders are news, people don't generally say "so what? someone has been murdered before" when there is a killing.
HSBC laundered something like $9 billion for the cartels from 2006 - 2009.[1] As of Dec 2009, they had $2.36 trillion in assets.[2] Money laundering is clearly illegal and $9 billion isn't a small amount of money, but their business wouldn't have changed at all without that 0.3% of dirty cash. You can absolutely make the case that the penalties should be larger (although $2 billion in fines is a pretty good start considering they didn't keep the deposited cash) and that executives should have criminal liability, but there's nuance to both of those things.
There's just no comparison to BTC-E (or any of the darknet markets that people insist are 'just like' eBay) who solely exist to launder money and facilitate illegal goods.
[1] - https://www.justice.gov/sites/default/files/opa/legacy/2012/...
[2] - http://www.annualreports.com/HostedData/AnnualReportArchive/...
The DoD accounting scandal is an example of the US Government effectively laundering massive sums of money to evade accountability:
http://www.cnn.com/2016/08/23/politics/us-army-audit-account...
Also, governments use other tactics that are illegal in the private sector extensively, such as fudging their accounting to hide market volatility.
https://www.sec.gov/news/testimony/2006/ts061506cc.htm
Governments care about private sector money laundering mainly because it can be used to conceal tax evasion. If drug lords and human traffickers simply paid their fair share of taxes chances are money laundering would not be on governments' radar.
This is a bit ridiculous. It's sometimes just more convenient to prosecute the side effects of crime than the crime itself. The financial system and regulations are set up in a way that makes it possible to catch and imprison criminals solely for their use of legitimate banking for their illicit activity. It adds a net to improve capture.
You don't put out mousetraps to protect the bait.
Money laundering (as an offence) is just a crude tool to make prosecutor's lives far, far, easier.
I've personally looked at BTC-e's trade histories and am not inclined to believe this. BTC-e's weak security track record also doesn't exactly support this theory either.
EDIT: I guess wizsec came through http://blog.wizsec.jp/2017/07/breaking-open-mtgox-1.html
>To be clear, this investigation turned up evidence to identify Vinnik not as a hacker/thief but as a money launderer; his arrest news also suggests this is what he is being suspected for. He may have merely bought cheap coins from thieves and offered a laundering service. He is, however, a crucial piece of the puzzle, as he will have likely known who he was dealing with and laundering for, and so represents a major breakthrough in the case. We assume that law enforcement will now be taking the appropriate next steps to pursue all the remaining angles and hopefully identify the other individuals involved as well.
edit for clarification: I wasn't saying he wouldn't have been caught, only that Monero offers additional benefits beyond some of the other coins and help conceal transaction history.
Withdrawals in the db may have addresses and amounts, although RingCT upgrades make this more and more useless, but even without RingCT the addresses do not correspond to any information in the blockchain. The best case law enforcement would have had, before RingCT is to have seized the database of several exchanges, where users transferred Monero directly between both exchanges and they could see addresses in both databases. In this respect, Monero is much more akin to accounts at financial institutions, where subpoenas are needed to glean any information at all. But further enhanced by retaining the individual control of private wallets that cryptocurrency allows, where financial institutions are an embellishment to temporary user experience problems.
A server containing a user's trade histories would show amounts deposited with Monero. But it would not contain the addresses those deposits came from, the Monero daemon doesn't know this.
Similarly, the user's withdrawals wouldn't be to an actual address that they could cross reference. RingCT gives people one time use addresses. But even if you were somehow not using RingCT addresses the Monero user experience had a best practice. Since you cannot follow transactions to that address over the blockchain, you cannot guarantee that it was the real destination at all. Any user should just have two wallets and transfer to one, which would have the address in the exchange's database, and then in wallet B, transfer to wallet C. I believe RingCT removes that marginal inconvenience, as the addresses themselves are one-time (but feel free to correct me here).
The scenario where an exchange gets shut down by LE, like BTC-e here.
>What exact problem are you trying to thwart?
The problem of exchanges getting shut down by LE, like BTC-e here.
Monero is great, I'm buying more every day, but it doesn't solve the issues exchanges may face.
In general though, the currency has nothing to do with the exchange's problems? I'm not really sure what you are imagining. Decentralized solutions like EtherDelta and upcoming cross chain solutions are going to be accelerated by this culling.
You're wrong.
shuf btc-e.sql|head -n 100|sprunge
Using input from a pipe or STDIN redirection...
http://sprunge.us/JNIP
You're right, that's exactly what I'm saying.
At this point in time it's "Solo Monero" for privacy.
Sounds perfect for government and public business accounting.
He is guy who has been identified in MtGox hacking
For example, if you run a USD-BTC exchange, and I mail you a suitcase full of money, then withdraw it as BTC, you would almost certainly be aiding money laundering.