

Liberty Reserve Founder Arrested, Site Shuttered - samweinberg
https://krebsonsecurity.com/2013/05/reports-liberty-reserve-founder-arrested-site-shuttered/

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cpursley
This is what I kept trying to say on here but always get downvotes.

Nation states will fight hard and dirty against digital currencies, as it
completely undermines their fiat currency inflationary economies.

~~~
betterunix
You keep getting downvotes because you are wrong. Alternative currencies --
digital or not -- in no way threaten fiat currencies. The reason is well-
understood by economists: law-abiding citizens and businesses have frequent
interactions with the government, which demands payment in a fiat currency.
The vast majority of businesses that accept Bitcoin payments, even on the
black market, do so only because they ultimately convert Bitcoin into fiat
currency (hence the popularity of Bitcoin payment processors that do this
automatically).

~~~
cpursley
I'm not wrong because of the above example. Nation states have begun coming
down on digital currency and this trend will only increase.

~~~
betterunix
You are wrong about the reason. Nobody is worried that any digital currency is
going to undermine fiat currencies. The concern is about enforcing the same
regulations that apply to other financial services, which a lot of digital
currencies have not bothered to abide by.

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xSwag
Does not surprise me at all. Almost every cyber crime forum (Damagelab,
exploit.in, Darkode, carder.pro, opensc etc) used Liberty Reserve (LR) to
receive payments for malware, credit cards, personal information and other
illegal content. This used LR because the payments could not be reversed and
because the company did not comply with law enforcement.

Not to worry though, Bitcoin seems to be getting more and more popular among
these forums and will probably take over.

~~~
jtome
webmoney seems to be alot more popular among these types than bitcoin

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dariusm5
Cached version:
[http://webcache.googleusercontent.com/search?q=cache:krebson...](http://webcache.googleusercontent.com/search?q=cache:krebsonsecurity.com/2013/05/reports-
liberty-reserve-founder-arrested-site-shuttered/)

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rdl
E-Gold round 47, I guess?

It's unclear how predictive the raid on Mt Gox (which appears to be FinCEN MSB
registration related, but possibly with more behind it) and LR (which appears
to be due to the use of LR by child porn and other illegal activities,
ultimately) are for future USG vs. Bitcoin exchangers and other market
participants.

(also, sigh, he's getting DoSed; using Prolexic, who are usually pretty decent
at mitigating these attacks, but it takes a long time to load.)

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user1251
Most popular currency for money laundering, terrorism supporting, child
pornography and drugs selling is ... USD DOLLAR!

~~~
zalew
> USD DOLLAR!

<http://en.wikipedia.org/wiki/RAS_syndrome>

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hackerboos
I'm surprised they managed to skirt the law for so long when they actively
promoted very shady HYIP programs.

~~~
jtome
Costa Rica has some wacky banking laws which allowed this to go on for as long
as it did

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DanielBMarkham
My opinion on e-currency is evolving the more I see how it's actually working
in the real world.

Ignoring the fact that bad people many times use e-currency for repulsive
things like child slavery, the lesson over the past month or two seems very
clear: any form of e-currency is a huge tool for governments to monitor and
control economic activity.

We think of e-currency as being much easier to move around than printed
currency, but it's actually much easier to _track and control_ than printed
currency. Yes, it begins as an anonymous and cryptographically-secure form of
value representation, but once government adds just a little enforcement
tweaking (many times without even having to pass a law) it becomes a big lead
weight around the owner's neck. Best-case, it's all tracked down to the penny.
Worst-case, you lose all your value.

I remain a skeptical fan, though. Here's hoping the community works through
these issues.

~~~
rdl
The ultimate lulz issue for fully anonymous and resilient payments is probably
the Jim Bell/Tim May "Assassination Politics" model:

<http://en.wikipedia.org/wiki/Assassination_market> <http://www.outpost-of-
freedom.com/jimbellap.htm>
[http://www.cypherpunks.to/faq/cyphernomicron/cyphernomicon.t...](http://www.cypherpunks.to/faq/cyphernomicron/cyphernomicon.txt)

Essentially I could say "I bet $100k that Marcus Badperson will die on the
morning of 15 June 2013"; best way to collect is to do the deed yourself (or
subcontract.)

The terrifying thing is not so much that someone might be willing to pay $100k
to kill someone, but that 1mm people might each be willing to pay $0.10. Not
so much kick _starter_ as kick _ender_.

(this whole thing was my first contact with the federal court system, since I
hosted a mailing list archive for the cypherpunks list on which a lot of this
was discussed, when Jim Bell got prosecuted back in 1997 for attacking an IRS
office. I was so glad I was running a really mediocre mailing list archive
where anyone who sent mail directly to the list address on the machine could
inject messages, and by picking the right message id, overwrite...and for
getting the world's most awesome attorney on retainer...)

~~~
asdkl234890
_I bet $100k that Marcus Badperson will die on the morning of 15 June 2013";
best way to collect is to do the deed yourself (or subcontract.)_

But don't you need someone else to take the other side of the bet?

You can't just bet X and get more. You can only get what Y bets in opposition.
Assuming no one else agrees with you and makes the same bet, because then
you'd have to share what Y put down.

And who's going to be the opposing side in these bets?

I happen to know Marcus Badperson is a janitor for the federal serve and will
spend all day on June 15th cleaning the gold bars inside the safest safe in
the world. So I bet a billion dollars he does NOT die between the hours of 9am
and 5pm on June 15th. Unless someone else bets more than a billion, the best I
can do is simply collect the same billion I put down.

I was hoping to find an elaboration of who could be the counter party in the
Wikipedia page, but nope nothing there.

I think the assassination market is very probable if you _completely_ skip the
question of who's the counter party. Or if you have no idea how betting and
payouts work in the first place. Otherwise this "assassination market" is
total bullshit.

~~~
rdl
The idea is that by taking the other side of the bet, you are incenting your
counterparty to do the crime. The bet is essentially an offer to do murder.

If you bet me you'll kill Mullah Omar for $10k tomorrow morning, I'll max out
a credit card to be your counterparty.

By being specific about the time/place/manner of death, you can avoid the free
riders to some degree. At least, all the ones who weren't betting on you
specifically. If I find a killer credible, I'd

The whole point of structuring it as bets vs bounties is plausible
deniability. A person contracting for an assassination is looking to lose
money and gain dead Mullahs, whereas a killer is trying to trade Mullah
killing for money. Uninvolved speculators are just betting based on the
credibity of specific proposed-killers, I think. It would be easy for killers
or contractors to manipulate the market to throw them, I think.

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pvnick
Mirror: <http://archive.is/heI1J>

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stcredzero
It's, "New Forms of Cybercrime Fun-Time!" where we think of new ways to
structure criminal enterprises to break existing laws and prosecutorial
organizations.

I call this one, "The Virtual Un-syndicate."

You take a small, cohesive group of criminal hackers working out of the same
room, and have them simulate the operation of a virtual criminal syndicate
staffed by freelancers around the globe. However, instead of using entirely
fictional pseudonyms for these freelancers, real identities are hired to be
used as pseudonyms. Likewise, a real person's identity is used as a
"mastermind" figurehead. The purpose is to hack the standard behavior of
prosecuting government organizations. If played correctly, the "mastermind"
figurehead and the "freelancers" will take the fall and the prosecutors will
be satisfied that they have done their jobs. In the meantime, the criminal
hackers have already moved on to establishing their next "Virtual Un-
syndicate."

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socillion
Wow, that is awful timing... Anyone know if they'll be doing any refunds for
legitimate transactions?

Just got a bit over 2k LR a few weeks back, who'd have guessed I'd lose more
money keeping it in LR instead of immediately buying bitcoin.

edit: looks like if e-gold is anything to go by it'll be several years at
best. _sigh_.

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jtome
Probably a good time to invest in bitcoin, although my poor and quick analysis
of bitcoin charts doesn't seem to indicate much activity in reaction to this
that couldn't be attributed to bitcoin's usual volatility. Webmoney, another
shady online payment processer will probably be the greatest beneficiary of
this. It's funny that bitcoin isn't used more by botnet owners and their ilk.
They seem to be slow adopters of new technologies (notice how they dont use
tor either).

