Federal prosecutors have shut down Liberty Reserve, an alternative payment network that they say was a $6 billion scam “designed to help criminals conduct illegal transactions and launder the proceeds of their crimes.†(Read the indictment.) This is a case anyone with Bitcoins in their virtual wallet is going to want to watch very closely.
The lead defendant, Arthur Budovsky, has a history of building money-transfer businesses that attract unwelcome attention from federal regulators. In 2006, Budovsky faced charges relating to another money-transmission business, called Gold Age, that authorities said had not complied with money-laundering regulations. He was convicted and sentenced to five years’ probation. Undeterred, Budovsky moved to Costa Rica, renounced his U.S. citizenship and started a new financial network called Liberty Reserve. Now that, too, has come under U.S. government scrutiny, and Budovsky has been arrested in Spain.
In the view of federal prosecutors, Liberty Reserve was deliberately designed for illegal activities. “Liberty Reserve has become a financial hub of the cyber-crime world, facilitating a broad range of online criminal activity,†the indictment states. “Unlike traditional banks or legitimate online payment processors, Liberty Reserve does not require users to validate their identity information, such as by providing official identification documents or a credit card. Accounts can therefore be opened easily using fictitious or anonymous identities.â€
Of course, that description could just as easily describe Bitcoin. Anyone can create a new Web address for accepting bitcoins and then transmit funds to other Bitcoin addresses without furnishing identifying information. This feature has raised concerns that the currency might be used for activities such as drug dealing or illegal gambling.
The U.S. government faults Liberty Reserve for requiring users to fund their accounts through intermediaries called “exchangers.†In the prosecutors’ view, these intermediaries helped the core Liberty Reserve network avoid collecting identifying information about their users. The Bitcoin economy has a similar structure. Users buy bitcoins with conventional currencies via online exchanges. Some of these intermediaries do collect information about their users, but once users have purchased their bitcoins they can conduct unregulated, and practically untraceable, transactions with other Bitcoin users.
For their part, leaders of the Bitcoin community have tried to stay within the bounds of the law. â€If the U.S. government decided that Bitcoin was a bad thing and told me, ‘Stop doing what you’re doing,’ I’d stop doing what I’m doing,†said Gavin Andressen, Bitcoin’s lead developer, in a recent interview.
But there’s also at least one important difference between Bitcoin and Liberty Reserve: If the authorities concluded that Bitcoin were a money laundering scheme, it’s not clear whom they’d prosecute. There’s no Budovsky for Bitcoin. Rather, the online currency was created by “Satoshi Nakamoto,†widely regarded as a pseudonym. Bitcoin transactions are processed in a distributed fashion by thousands of “miners†around the world. It would be difficult for the United States to indict all of them, and doing so would likely drive Bitcoin mining underground — which could make it even more attractive to criminals.
That sprawling, decentralized network would create a dilemma for federal regulators if former Liberty Reserve users switched to Bitcoin. The crypto currency doesn’t fit well into existing money-laundering laws, and there’s no one who can be required to reform the network to bring it into compliance. Trying to shut down Bitcoin could prove futile — the feds can make life hard for individual Bitcoin users but likely could not destroy the network altogether.
Civil libertarians have long lauded the Internet’s ability to resist government’s efforts to control the flow of information. The emergence of Web payment networks such as Liberty Reserve and Bitcoin could threaten the United States’ ability to control the flow of electronic funds, too.
"Your as mighty as the flower that grows the stones away"
So the government’s beef with these is the fact they elude taxation or that they are less traceable, i.e. less usable in court?
That’s a question for the feds… This is def. good info, thanx Dub!!
From what I got out of it, the actual charges were ‘money laundering’.
Simple fact is, they want complete and utter control of the money – all of it, no matter where it’s at. In your pocket, or bank account? Yeah, that’s theirs too, if they want it. What I think pissed them off worst was the simple fact that the money (rather a lot of it) was going somewhere they couldn’t track it, and it was driving their collective nosy asses crazy.
The guv is scared as hell that an alternate currency might take hold, and put a stop to their fiscal chicanery (should’ve happened long ago, IMHO).
Ghaddafi + wanted to go to back to gold standard for Libyan oil purchases = country destabilized, dragged out of a storm drain and beaten/shot to death.
Saddam + wanted to go back to the gold standard for Iraqi oil purchased = country invaded, occupied for 10+ years. Drug from spider hole, kangaroo courted, and killed by hanging in a most uncivilized manner.
It’s not just the US either, but it’s a huge indicator how much US citizens want away from our fed currency. Nobody wants them to just keep printing whatever they want just to pay the bills they can’t pay, devaluing whatever meager monetary resources the lower classes are left for things we didn’t want them to do in the first place. Yet, this is exactly what they are doing, as well as their stated plan for the future. Independent money transactions prevent this, and stymie their illegal "tax collections", as the accounts can be under pseudonyms/anonymous owners.
When and if we ever see a universal global monetary system, watch the fuck out… The end is near…
I was reading an article earlier today on Gizmodo about Silk Road and Bitcoin was mentioned. One of the Bitcoin guys chimed in: "Jeff Garzik, a member of the Bitcoin core development team, says in an email that bitcoin is not as anonymous as the denizens of Silk Road would like to believe. He explains that because all Bitcoin transactions are recorded in a public log, though the identities of all the parties are anonymous, law enforcement could use sophisticated network analysis techniques to parse the transaction flow and track down individual Bitcoin users. Attempting major illicit transactions with bitcoin, given existing statistical analysis techniques deployed in the field by law enforcement, is pretty damned dumb," he says."
You can read the whole article here: http://gizmodo.com/5805928/the-underground-website-where-you-can-buy-any-drug-imaginable
Id say Bitcoin will probably end up the same as Liberty in the near future.
"Fool me one time, shame on you. Fool me two times, cant put tha blame on you. Fool me three times, fuck tha peace signs, load the choppa and let it rain on you"
Insofar as the dollar is concerned, it’s days are numbered. They’re cranking up the presses like madmen and loading it all up in bonds. Eventually those bonds *will* reliquefy, dumping all that currency onto the market (don’t worry, the people responsible will be long gone with their fortunes in gold and other solids by then). We will have runaway inflation. Even those who have savings, it won’t mean shit for, because the money will be essentially worthless.
Happened right before WWII in Germany. There is a story about a woman whom, out of necessity, had to leave a basket full of reichsmarks ("cash") outside of a store for a moment. Upon her return, she discovered that someone had stolen the basket itself, as it still had value, but left the worthless currency on the sidewalk.
You can also find pictures of the same period of people loading their cooking and heating stoves with reichsmarks, as they were of less value than any other combustible available at the time.
Believe it folks, it can happen here, "in the blink of an eye".
*actual photo*
Good Point! The US Dollar is already considered worthless in many other countries. There was a scene in one episode of The Sopranos where they had hired two Italian hitmen to do a high profile hit. As they were flying back home they were looking at the watches and the Mont Blanc pens they bought in America and laughing at how cheap the US dollar had become.
"Fool me one time, shame on you. Fool me two times, cant put tha blame on you. Fool me three times, fuck tha peace signs, load the choppa and let it rain on you"
No worries, as a decentralized digital currency bitcoin can not be shut down by anyone. Losing Liberty Reserve is not a big deal, there are alternatives. Once you have acquired bitcoin keep them safe using cold storage.
No worries, as a decentralized digital currency bitcoin can not be shut down by anyone. Losing Liberty Reserve is not a big deal, there are alternatives. Once you have acquired bitcoin keep them safe using cold storage.
Like this
http://www.sciencefor.us/viewtopic.php?f=33&t=30019
Axa sure does have ALOT of great input on security, I think we all should take note… I wish I had the patience as a customer, you can bet your ass I would as a vendor…