The question for me is: why US? He is a Russian citizen, the company is based in Bulgaria, servers in Russia, legal HQ in Cyprus and all the services operated from Seychelles - arrested in Greece. The MtGox hack affected a Japanese company. I'm not debating the nature of the crimes, etc - I am just wondering, when does it become a US case?
I can get the "there were US customers" - but why not Europe? Or Japan? Or Russia? Or Australia? I'm sure BTC-e had customers from all over the world (and money laundry is pretty much a crime everywhere).
So, when does it become "you have broken the US law and you are under arrest"?. Does it work the other way around too? If you start a gay social network in US, can Russia come in (the first time you are flying in one of the Russia's partners territories)
and say "you are breaking Russian gay laws, you are under arrest"?
Look at the actual charges in the indictment. All the BTC-e stuff is not what he's charged with. He's charged with transferring stolen Mt Gox Bitcoins to Tradehill, a San Francisco based exchange (now defunct). That's the US connection that will seal his extradition.
They also allege that BTC-e is (at least partially) hosted in the US and does business with many US companies, which is likely true. But that's not what they charged him with. Maybe that will come later after he's extradited and they have a chance to go through the evidence they no doubt collected when they arrested him.
On an unrelated note, it looks like the traceability of Bitcoin transactions played a major role in this. It turns out that Bitcoin is really not a great way to launder money, unless you want a record of your money laundering archived forever, redundantly, on a distributed system of computers around the world! I expect future crypto-locker viruses to switch to Monero instead of Bitcoin now that they can no longer cash out through BTC-e. Subsequently I expect to see Monero delisted from any exchange that follows KYC after some pressure from law enforcement.
For one of charges in the indictment, "Operation of an Unlicensed Money Transmitting Business" (18 USC § 1960), they allege that BTC-e satisfied two conditions, either of which alone would have been sufficient to prove the charge. One of the conditions is knowingly transmitting funds derived from a criminal offense, but the other one is just "fail[ing] to comply with the money transmitting business registration requirements set forth in [31 USC § 5330]". So I'd say the BTC-e stuff is indeed part of "what he's charged with", albeit not the main focus.
Yes, the blockchain is a fantastic resource for Feds prosecuting financial crimes. In order to get away with these things you need to have flawless opsec, because the moment they can connect one thing to you everything quickly unravels.
As an actual cryptographer who has looked into it, I wouldn't put too much faith in Monero's fungibiliry. The story is not as good as the PR would have you believe, and is really not all that different from Bitcoin with CoinJoin.
Only way to launder BTC - break the history chain, so to speak - is to first pull it out of the network - which requires either an exchange, or like a street deal (cash for BTC). Exchanges require identification so either there's a dodgy one that doesn't ask for that, or you get a mule.
Anyway, then you have cash money, you buy BTC back. Or keep the cash, I mean I wouldn't want to keep BTC if I had stolen it. It's pretty much worthless on its own - as proven by pretty much all media always going about $4 billion instead of 600K+ BTC.
We don't really know what steps they took to launder the money though, do we? Maybe they were dumb and directly moved the coins from a known hack address to Tradehill.
If you're a bit patient and are willing to get your money only a small amount at a time I don't see why you wouldn't be able to launder even a significant amount of bitcoins. Use coin mixers, convert back and forth with other crypto-currencies (including Monero if you want), split and merge the coins, mix that with actual transactions to 3rd party accounts (gambling sites, donations, whatever)... Eventually people will lose track, or at the very least you'll have plausible deniability that the coins changed hands at some point.
> Subsequently I expect to see Monero delisted from any exchange that follows KYC after some pressure from law enforcement.
This won't happen. KYC will still remain, but privacy is an important feature that many legitimate businesses want in crypto for completely legal and good reasons. Many of the businesses in the EEA are interested in Ethereum gaining privacy features, and Ethereum plans to add zkSNARKS. At that point it's not just Monereo, ZCash, etc that the exchanges would have to ban but Ethereum as well. It'll be a losing battle for law enforcement.
The concept involved here is extraterritorial jurisdiction--the US claims the right to enforce its laws on its citizens abroad in some circumstances. The most notorious uses in the US are FATCA (basically forcing foreign banks that do business with US citizen to hand information over to the US) and the FCPA (allowing anyone with pretty much tangential relationship to the US to be sued for bribery). It's telling that the FIFA corruption scandal was brought, not by any EU courts, but by the US federal prosecutors.
In these sort of situations, the main thing that tends to apply is not the ability to get a judgement in court but the ability to get that judgement enforced. So if, say, Fiji were to make up a law and convict, say, Donald Trump under it, no one would care--Fiji would have no practical way to enforce that judgement. But the US can generally get its judgements enforced, even outside the US.
In the specific case of the financial world, the size and importance of the US financial markets gives the US unparalleled power to enforce judgements. The US could not only lock you out of dealing with USD transactions directly, they could also direct banks that do business in the US to not do business with you.
None of that unparalleled power is needed in this case. Greece and the US have an extradition treaty, the crimes alleged by the US are serious, dual criminality exists, they're not political offenses, the guy isn't facing the death penalty, and he's not even a Greek citizen. This is a by-the-book extradition.
@jcranmer agreed. US financial markets (breadth/depth) / US law influence over multi-jurisdicational banking entities, ensures that US law can/will be enforced by almost all players.
Should the authorities in a particular jurisdiction fail to enforce financial crimes, indicting a bank or sanctioning an individual in that region can effectively block all counter-parties from doing business with them (as they are now doing business with a sanctioned or indicted party).
It's hard to explain in laymens terms without sounding like some kind of "Illuminati-nut" (for lack of a better term) ):
And also requires a better understanding of interbank standards and practices, money/current-markets, SWIFT, etc.
I can get the "there were US customers" - but why not Europe? Or Japan? Or Russia? Or Australia? I'm sure BTC-e had customers from all over the world (and money laundry is pretty much a crime everywhere).
So, when does it become "you have broken the US law and you are under arrest"?. Does it work the other way around too? If you start a gay social network in US, can Russia come in (the first time you are flying in one of the Russia's partners territories) and say "you are breaking Russian gay laws, you are under arrest"?
The best way to think about this is in terms of the laws of the country you are in.
We might be a outraged that Otto Warmbier was treated so harshly (killed really) by North Korea for allegedly stealing a propaganda poster, but at the end of the day we understand that he went to North Korea and in North Korea, North Korean laws apply.
The next step is to ask about actions that took place outside the country you are in but are illegal under that countries laws. So if, for example, Seth Rogen who famously made a movie making fun of Kim Jung-Un were to travel to North Korea we would not at all be surprised if we were arrested and sentenced to a very harsh punishment.
Finally, consider that extradition laws are just like any other domestic laws. The treaty between Greece and the United States means that for the purpose of a lot of criminal laws, physically entering Greece is the same as physically entering the United States.
In this case it was ultimately Greece that decided that what Vinnik did was sufficient to take away his freedom. He subjected himself Greece's judgment by going to Greece. If he had stayed in Russia he probably would not have been extradited.
Going to another country is something many of us take lightly, but it can be a really big deal.
The "why" is just "because the DoJ made a case before Europe or Japan". The "how" is just extradition. Greece was willing to extradite him to the US to face these charges. The US would do the same with Greece, though not with Russia as we lack an extradition treaty with Russia (and probably not to face a charge that would be a clear first amendment violation anyway).
I don't mean to be argumentative but surely no [BTC-e] US customer was a "victim" of any money laundering that may have been going on?
Edit: Since my question wasn't clear, the emphasis was on customer, as in: "customers of a business that also engages in money laundering aren't usually considered victims of that money laundering."
In many countries, it is illegal for lawyers to charge a percentage of the obtained damages. But in the US, a lawyer can propose: "I'll help you suing this bastard for free if I get half of the awarded damages." This incentivizes US lawyers to be more confrontational and to seek higher damages than anywhere else.
Edit, found this: "FinCEN today assessed a $110 million civil money penalty against BTC-e for willfully violating U.S. anti-money laundering (AML) laws. Alexander Vinnik was assessed $12 million for his role in the violations." In the US, government agencies can keep such fines for themselves, providing them with a nice incentive to go after such cases.
> But in the US, a lawyer can propose: "I'll help you suing this bastard for free if I get half of the awarded damages." This incentivizes US lawyers to be more confrontational and to seek higher damages than anywhere else.
But it also gives poor people a chance to sue someone big, because their lawyer isnt asking for a fixed fee.
It's not clear what exactly the outcome is in this case, but in many civil cases the US Treasury uses the penalties to repay the original injured parties. It generally doesn't cover all their losses.
The US has this "thinking" that the world is just their backyard. It is not really in the law, strictly speaking. But if you have been watching the news, they strongly interfere with countries for their own (or their politicians) benefit.
For example, they hit Libya with missiles right when Al-Gaddafi sent troupes to defend from future-ISIS militants.
So yes, the US will get involved in stuff that matters to it.
> The question for me is: why US?
Because if you know the US is coming and dropping bombs, who the hell wants to fight it? Even Russia is abstaining hard to prevent the nuclear war possibility though the US have been doing all it can to start it.
You're not wrong, but also dismiss some tough moral choices. I'd argue that attacking Libya was against U.S. strategic interests. Since 9/11 Gaddafi had substantially improved relations with the west. He gave up his nuclear program and was basically acting as Europe's bouncer. Since he fell the migrant crisis has exploded. North Korea and Iran learned that despite all promises otherwise, the only way to ensure regime survival is nukes.
So why did the U.S. intervene? Gaddafi was going to ruthlessly slaughter everyone in Benghazi. He said so, and had the tanks to do it rolling across the desert. It turns out that the U.S. military is really good at killing tanks in the desert (esp in a low air defense threat environment), so the White House and DoD knew that they would have blood on their hands if they stood by and watched. Also, unlike Syria, Gaddafi had no strategic allies to complicate things. That is, other than us.
And now we get to suffer the long term consequences of preventing that genocide by stabbing a new friend in the back. We saved lives in Benghazi and toppled a ruthless dictator. We also fueled the rise of ISIS, and helped pave the way for nuclear confrontations in Korea and the Middle East.
> If you start a gay social network in US, can Russia come in (the first time you are flying in one of the Russia's partners territories) and say "you are breaking Russian gay laws, you are under arrest"?
People often don't realize that if you fly through US airspace after violating certain US laws as non-citizens, you will be apprehended through an emergency layover coordinated with the carrier. That's a contributor to why US federal three letter agencies constantly ingest passenger manifests.
You're right, despite being downvoted, although such an arrest would almost certainly become a major diplomatic incident.
OTOH someone who broke a Russian law we don't find objectionable (and who isn't connected or famous) would be unlikely to get much assistance from the embassy beyond basic legal advice and help hiring a lawyer.
Russia mostly prefers to block websites instead of prosecuting their creators. E.g. btc-e.com (but not btc-e.nz) was blocked in Russia but they didn't care about its owners.
He used the US banking system to launder money. That's exactly the same reason why European FIFA executives and Brazilian Odebretch executives were arrested as well.
Why is it always assumed that the "company" was based in Bulgaria? Which "company" is it? As a Bulgarian myself I've seen that mentioned several times in the past, even on reputable sites, but never seen any actual evidence.
I mean seriously. These ponzi schemes all involve american buys propping up the money and it is an absolute miracle that the US government is willing to invest time and money in creating a system of justice that at the very minimum punishes clear breaches of trust in this system. The only alternative is that any money invested in this technology at all is wasted on Russian fraudsters. I mean honestly is everything just pure bullshit in this world or what?
BTC-E has been seen by the Bitcoin community as "shady" for years. People have always recommend others to avoid using it. It was rumored to be an easy place to sell stolen Bitcoins. It has always offered strangely convoluted pathways to transfer fiat to financial institutions (see http://bitcoinworldwide.net/how-to-deposit-money-into-btc-e). I'm glad BTC-E finally got taken down. I am not surprised it was involved in illegal activities. One less shady Bitcoin company.
Now the top 12 or so volume-ranked Bitcoin exchanges listed at https://cryptowat.ch are perfectly legitimate trustworthy companies. The ones I'm not sure about are CEX.IO and Luno (not saying they aren't trustworthy, I just don't know them that well) and, well, Bitsquare which as a decentralized exchange is bound to have some shady participants.
> It has always offered strangely convoluted pathways to transfer fiat to financial institutions
Your link is not evidence of "strange convolution." The reason there are so many steps/screenshots is because the payment service is in Russian, and the guide is designed for non-Russian speakers.
Most people never dealt with fiat on BTC-e, and would use someone like Coinbase to fund the purchase of coins, and trade exclusively in crypto on BTC-e.
> Now the top 12 or so volume-ranked Bitcoin exchanges listed at https://cryptowat.ch are perfectly legitimate trustworthy companies.
Any cryptocoin exchanger is involved in criminal activity, because criminals have to sell their stolen coins as fast as possible. And you find out that you were a part of criminal activity only afterwards...
I still don't understand, the U.S. is charging a Russian with a white collar crime?
The crime was committed outside the U.S., he didn't come to the U.S., the servers weren't in the U.S., Mt.Gox was based out of Japan, and Greek police arrested him.
I've seen this enough to know this is common, but what is going on with this world?
As others have noted, the US didn't just make up jurisdiction here or declare that they can prosecute anything anywhere -- the charges include an allegation that he transferred stolen BTC to a US-based company. That creates a crime the US has jurisdiction to prosecute.
It really is time for people to stop being gobsmacked at the idea that once you get entangled with an entity in a particular country, anything you do to or with that entity which violates the country's laws is fair game for them to extradite and prosecute you over. Shouting, "But I didn't do it in your country, I did it on the internet!" does not get people out of that.
Also, given just how much global network infrastructure passes through the US, and the near-impossibility of productively cashing out of most criminal schemes without involving a US institution, people should stop being surprised that their clever attempts to commit the perfect stateless crime are neither clever nor stateless.
You haven't really explained or justified anything. "Them's the rules!!!"
What if Thailand wanted to extradite you because you joked about their king on HN?
You would just laugh, not make a point about "well, what do you expect when you challenge a nation's royal sovereignty? Have some respect on the internet! Thailand takes this very seriously."
> As for defendant BTC-e, the indictment alleges that, despite doing substantial business in the United States, BTC-e was not registered as a money services business with the U.S. Department of the Treasury, had no anti-money laundering process, no system for appropriate “know your customer” or “KYC” verification, and no anti-money laundering program as required by federal law.
BTC-E didn't specifically bar US customer from trading there, so the indictment is on the grounds that their services were offered to US citizens, therefore liable to US Law.
International stateless crime needs to be prosecuted somewhere. He was indicted in the US because the US decided to go after him for crimes against US citizens, and other jurisdictions like Greece that have extradition warrants with the US decided to participate.
MLATs (mutual legal assistance treaties), extradition agreements, and powerful people with powerful relationships willing to go the extra distance to fuck someone's shit up.
> The crime was committed outside the U.S., he didn't come to the U.S., the servers weren't in the U.S., Mt.Gox was based out of Japan, and Greek police arrested him.
No, but he either robbed, or laundered money for people who robbed US citizens (MTGOX customers.)
> If you run online exchanger and have a single US customer, then you have to register your operation in USA. I find it ridiculously stupid.
When you don't know much about something, it can often look stupid.
This isn't new or complex, though. If you do business across a border, governments on either sides of the border may take an interest in the transaction. If you don't like that, don't do business across a border. "Online" isn't a special magic transdimensional place. It's just a web of connections between existing places.
> When you don't know much about something,
> it can often look stupid.
This is just a rude remark. Do you think it's appropriate if I said "Heh, cute, wpietri, but many things are only defensible when you don't understand them."
Also, "if you don't like it, don't do it!" is not a commentary on the issue.
It gets better: while criminal charges for illegal banking practices are part of United States Code (title 18 covers crimes), the banking REGULATIONS that one must adhere to are codified at the State level. This means you must apply for 50 or so different licenses in order to legally do business as a Money Transfer Agent and Money Services Busimess in the United States. Although it seems overly burdensome and deliberately conceived to hinder practicing this line of business, the truth is that it creates an environment where consumers of the products and services offered by these businesses are better protected from fraud, as well as fostering an ecosystem of diverse business practices which leads to an advanced rate of innovation. It's a strange system, but it works very well. The downside is that it takes about $30M in cash to start one of these businesses just to fulfill regulatory requirements vis-à-vis the licensing, deposit, and audit requirements.
You can cover >25% of the US population in just the top 3 states (CA, TX, NY).
The system isn't that strange, almost every business in the US is primarily regulated by the states. What's strange is that most Americans don't realize this.
> 1) Arresting btc-e admin made all US customers to lose their balances on btc-e exchange. I highly doubt btc-e will come back online.
I wouldn't be too sure about the US having control over the BTC-e wallets. Their Ethereum hot wallet[1] (with around $100M funds in it) has been untouched since the website has gone down. I'd assume that there's more than one person at BTC-e having access to those funds. Assuming the US government has access to the keys - why didn't they move the funds somewhere else in order to secure them?
Why would they lose their balances? Any decent company holds customer funds in a separate account from their own. I'm sure BTC-e cared enough about their customers that they did this! :)
Do you have to declare your gold or silver in foreign banks? If not, then I don't see why you would for eCurrency/eAssets. Assets are just assets no matter the form.
Exchanging BTC for cash, gold or diamonds is much more difficult ( and there's a higher perceived danger ). How would you go about trading your BTC for diamonds?
Btc-to-diamonds.website ? If it's online, it's tracked by 5 eyes
Tor? 5-eyes is even more interested
Craigslist? Great, go meet a stranger in a parking lot and gamble that you don't get robbed.
The comment is general but it's right. As it & other posters in this thread have pointed out - existing power structures control the world. The internet does not exist in an imaginary "stateless" vacuum.
I wonder how much BTC-e knew about these money sources. Were they a general "don't ask, don't tell" laundering operation that just so happened to be used by these people because it was their best laundering option, or were they directly involved in some of the hacks?
What are the odds that whoever was running BTC-e also happened to be involved in any of those hacks? It's definitely a case of "don't ask, don't tell" and perhaps, making that policy known.
I would like to know how he was arrested in Greece. Was there an Interpol warrant or something or they just made a phonecall and the Greek authorities promptly put the guy on a ship to US?
This illustrates how the DOJ is years behind when it comes to understanding cryptocurrency technology and markets.
It won't take long for one of the cryptocurrencies with private transactions to rise in dominance, since this sort of crackdown imposes costs and uncertainty on all participants.
If the goal of the DOJ was to fight crime, the most effective approach would have been simply to infiltrate mixers and trace money flows relevant to investigations, something BTC is perfect for.
Instead, this move sends a strong signal to the cryptocurrency community that hardening measures are needed.
Pretty sure that won't matter. Monero will hinder blockchain analysis, but if you're wiring out millions they can just demand you prove the legitimacy. "I got untraceable coins" is on the level of excuse as "I got this sack full of cash".
So long they prevent people from cashing out big time, then they're on the same level as cash (see, needing to deposit boxes of cash with HSBC).
Good point. I think it will take a fairly significant transition away from fiat currencies before that situation is eliminated...
But one of the incentives of getting rid of cash is to transform the money into something that can be efficiently sent over a large distance, which is something cryptocurrencies already do.
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I can get the "there were US customers" - but why not Europe? Or Japan? Or Russia? Or Australia? I'm sure BTC-e had customers from all over the world (and money laundry is pretty much a crime everywhere).
So, when does it become "you have broken the US law and you are under arrest"?. Does it work the other way around too? If you start a gay social network in US, can Russia come in (the first time you are flying in one of the Russia's partners territories) and say "you are breaking Russian gay laws, you are under arrest"?
They also allege that BTC-e is (at least partially) hosted in the US and does business with many US companies, which is likely true. But that's not what they charged him with. Maybe that will come later after he's extradited and they have a chance to go through the evidence they no doubt collected when they arrested him.
On an unrelated note, it looks like the traceability of Bitcoin transactions played a major role in this. It turns out that Bitcoin is really not a great way to launder money, unless you want a record of your money laundering archived forever, redundantly, on a distributed system of computers around the world! I expect future crypto-locker viruses to switch to Monero instead of Bitcoin now that they can no longer cash out through BTC-e. Subsequently I expect to see Monero delisted from any exchange that follows KYC after some pressure from law enforcement.
Anyway, then you have cash money, you buy BTC back. Or keep the cash, I mean I wouldn't want to keep BTC if I had stolen it. It's pretty much worthless on its own - as proven by pretty much all media always going about $4 billion instead of 600K+ BTC.
If you're a bit patient and are willing to get your money only a small amount at a time I don't see why you wouldn't be able to launder even a significant amount of bitcoins. Use coin mixers, convert back and forth with other crypto-currencies (including Monero if you want), split and merge the coins, mix that with actual transactions to 3rd party accounts (gambling sites, donations, whatever)... Eventually people will lose track, or at the very least you'll have plausible deniability that the coins changed hands at some point.
This won't happen. KYC will still remain, but privacy is an important feature that many legitimate businesses want in crypto for completely legal and good reasons. Many of the businesses in the EEA are interested in Ethereum gaining privacy features, and Ethereum plans to add zkSNARKS. At that point it's not just Monereo, ZCash, etc that the exchanges would have to ban but Ethereum as well. It'll be a losing battle for law enforcement.
This would be a very dangerous precedent for the cause of privacy. It's the financial equivalent of banning encrypted communication.
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In these sort of situations, the main thing that tends to apply is not the ability to get a judgement in court but the ability to get that judgement enforced. So if, say, Fiji were to make up a law and convict, say, Donald Trump under it, no one would care--Fiji would have no practical way to enforce that judgement. But the US can generally get its judgements enforced, even outside the US.
In the specific case of the financial world, the size and importance of the US financial markets gives the US unparalleled power to enforce judgements. The US could not only lock you out of dealing with USD transactions directly, they could also direct banks that do business in the US to not do business with you.
Should the authorities in a particular jurisdiction fail to enforce financial crimes, indicting a bank or sanctioning an individual in that region can effectively block all counter-parties from doing business with them (as they are now doing business with a sanctioned or indicted party).
It's hard to explain in laymens terms without sounding like some kind of "Illuminati-nut" (for lack of a better term) ):
And also requires a better understanding of interbank standards and practices, money/current-markets, SWIFT, etc.
So, when does it become "you have broken the US law and you are under arrest"?. Does it work the other way around too? If you start a gay social network in US, can Russia come in (the first time you are flying in one of the Russia's partners territories) and say "you are breaking Russian gay laws, you are under arrest"?
The best way to think about this is in terms of the laws of the country you are in.
We might be a outraged that Otto Warmbier was treated so harshly (killed really) by North Korea for allegedly stealing a propaganda poster, but at the end of the day we understand that he went to North Korea and in North Korea, North Korean laws apply.
The next step is to ask about actions that took place outside the country you are in but are illegal under that countries laws. So if, for example, Seth Rogen who famously made a movie making fun of Kim Jung-Un were to travel to North Korea we would not at all be surprised if we were arrested and sentenced to a very harsh punishment.
Finally, consider that extradition laws are just like any other domestic laws. The treaty between Greece and the United States means that for the purpose of a lot of criminal laws, physically entering Greece is the same as physically entering the United States.
In this case it was ultimately Greece that decided that what Vinnik did was sufficient to take away his freedom. He subjected himself Greece's judgment by going to Greece. If he had stayed in Russia he probably would not have been extradited.
Going to another country is something many of us take lightly, but it can be a really big deal.
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Edit: Since my question wasn't clear, the emphasis was on customer, as in: "customers of a business that also engages in money laundering aren't usually considered victims of that money laundering."
Edit, found this: "FinCEN today assessed a $110 million civil money penalty against BTC-e for willfully violating U.S. anti-money laundering (AML) laws. Alexander Vinnik was assessed $12 million for his role in the violations." In the US, government agencies can keep such fines for themselves, providing them with a nice incentive to go after such cases.
But it also gives poor people a chance to sue someone big, because their lawyer isnt asking for a fixed fee.
For example, they hit Libya with missiles right when Al-Gaddafi sent troupes to defend from future-ISIS militants.
So yes, the US will get involved in stuff that matters to it.
> The question for me is: why US?
Because if you know the US is coming and dropping bombs, who the hell wants to fight it? Even Russia is abstaining hard to prevent the nuclear war possibility though the US have been doing all it can to start it.
So why did the U.S. intervene? Gaddafi was going to ruthlessly slaughter everyone in Benghazi. He said so, and had the tanks to do it rolling across the desert. It turns out that the U.S. military is really good at killing tanks in the desert (esp in a low air defense threat environment), so the White House and DoD knew that they would have blood on their hands if they stood by and watched. Also, unlike Syria, Gaddafi had no strategic allies to complicate things. That is, other than us.
And now we get to suffer the long term consequences of preventing that genocide by stabbing a new friend in the back. We saved lives in Benghazi and toppled a ruthless dictator. We also fueled the rise of ISIS, and helped pave the way for nuclear confrontations in Korea and the Middle East.
Yes.
OTOH someone who broke a Russian law we don't find objectionable (and who isn't connected or famous) would be unlikely to get much assistance from the embassy beyond basic legal advice and help hiring a lawyer.
Any "international law" that would stop this is toothless.
P.S. An investigation from 2 days ago also fails to find any Bulgarian connection to BTC-e: https://bivol.bg/en/no-bulgarian-connection-found-so-far-in-...
I'd like to see them try to extradite this guy. LOL!
What are those?
Now the top 12 or so volume-ranked Bitcoin exchanges listed at https://cryptowat.ch are perfectly legitimate trustworthy companies. The ones I'm not sure about are CEX.IO and Luno (not saying they aren't trustworthy, I just don't know them that well) and, well, Bitsquare which as a decentralized exchange is bound to have some shady participants.
Your link is not evidence of "strange convolution." The reason there are so many steps/screenshots is because the payment service is in Russian, and the guide is designed for non-Russian speakers.
Most people never dealt with fiat on BTC-e, and would use someone like Coinbase to fund the purchase of coins, and trade exclusively in crypto on BTC-e.
> Now the top 12 or so volume-ranked Bitcoin exchanges listed at https://cryptowat.ch are perfectly legitimate trustworthy companies.
BTC-e was number six on that list...
The crime was committed outside the U.S., he didn't come to the U.S., the servers weren't in the U.S., Mt.Gox was based out of Japan, and Greek police arrested him.
I've seen this enough to know this is common, but what is going on with this world?
It really is time for people to stop being gobsmacked at the idea that once you get entangled with an entity in a particular country, anything you do to or with that entity which violates the country's laws is fair game for them to extradite and prosecute you over. Shouting, "But I didn't do it in your country, I did it on the internet!" does not get people out of that.
Also, given just how much global network infrastructure passes through the US, and the near-impossibility of productively cashing out of most criminal schemes without involving a US institution, people should stop being surprised that their clever attempts to commit the perfect stateless crime are neither clever nor stateless.
What if Thailand wanted to extradite you because you joked about their king on HN?
You would just laugh, not make a point about "well, what do you expect when you challenge a nation's royal sovereignty? Have some respect on the internet! Thailand takes this very seriously."
It's not just about Mt. Gox.
No, but he either robbed, or laundered money for people who robbed US citizens (MTGOX customers.)
2) If you run online exchanger and have a single US customer, then you have to register your operation in USA. I find it ridiculously stupid.
When you don't know much about something, it can often look stupid.
This isn't new or complex, though. If you do business across a border, governments on either sides of the border may take an interest in the transaction. If you don't like that, don't do business across a border. "Online" isn't a special magic transdimensional place. It's just a web of connections between existing places.
Also, "if you don't like it, don't do it!" is not a commentary on the issue.
The system isn't that strange, almost every business in the US is primarily regulated by the states. What's strange is that most Americans don't realize this.
I wouldn't be too sure about the US having control over the BTC-e wallets. Their Ethereum hot wallet[1] (with around $100M funds in it) has been untouched since the website has gone down. I'd assume that there's more than one person at BTC-e having access to those funds. Assuming the US government has access to the keys - why didn't they move the funds somewhere else in order to secure them?
[1] https://etherscan.io/address/0x91337a300e0361bddb2e377dd4e88...
https://news.ycombinator.com/item?id=1533033
Btc-to-diamonds.website ? If it's online, it's tracked by 5 eyes Tor? 5-eyes is even more interested Craigslist? Great, go meet a stranger in a parking lot and gamble that you don't get robbed.
The comment is general but it's right. As it & other posters in this thread have pointed out - existing power structures control the world. The internet does not exist in an imaginary "stateless" vacuum.
https://www.reddit.com/r/SheepMarketplace/comments/1t0ueq/sh...
https://www.theguardian.com/technology/2013/dec/09/recoverin...
0) http://invezz.com/analysis/forex/147-btc-e-anonymity-reigns-...
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It won't take long for one of the cryptocurrencies with private transactions to rise in dominance, since this sort of crackdown imposes costs and uncertainty on all participants.
If the goal of the DOJ was to fight crime, the most effective approach would have been simply to infiltrate mixers and trace money flows relevant to investigations, something BTC is perfect for.
Instead, this move sends a strong signal to the cryptocurrency community that hardening measures are needed.
For instance: http://zerocoin.org/
So long they prevent people from cashing out big time, then they're on the same level as cash (see, needing to deposit boxes of cash with HSBC).
But one of the incentives of getting rid of cash is to transform the money into something that can be efficiently sent over a large distance, which is something cryptocurrencies already do.