Bitcoin Forum

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Are Bittrex, Cryptsy and Poloniex in danger of being shut down by the Feds?

not cryptsy, they said they have every regulation needed to operate legally, i don't know about bittrex, but i would assume that intelligent operators know that governments are watching them if they deal with fiat and would take precautions

This is a well predicted behavior of the US government in my opinion. In the US everything has to be regulated and whatever poses a danger to the current system will in my opinion be attacked and extinguished.

I hope they don't act the same on Bitcoin but this is more likely than the other, positive behavior.

It's not really new though. If you operate an exchange in a state you don't have right paperwork for.... you are asking to be in trouble.  It's considered money laundering.

I mean this happened before with another exchange look at Charile Shrim - http://www.coindesk.com/bitcoins-first-felon-charlie-shrem-begins-2-year-sentence/

Indeed, US is probably one of (or the) worst country to operate in without proper licenses.   :-X

Just more bad press for Bitcoin.

Coinbase comply with regulations (maybe even more than they need to) so they won't get shut down.

Once your account reaches a certain level of activity, Coinbase ask you a number of questions as to how you are funding your account to buy btc and what they are for. So this makes them compliant with AML.

It's not the first time, not even close. A legendary member here was arrested for trading Bitcoin on LocalBitcoin (charges dropped).
https://bitcointalk.org/index.php?topic=934268.0

I believe you are right, FEDs are clamping down hard on trading without license and KYC compliance. That is the reason I have high hopes for legit exchanges like Gemini. They are taking forever to come online, but I think a few of those around the world (in large cities with solid legal framework) would set a new scene for Bitcoin.

Coinbase is unlikely to be shut down. It is refusing to do business with people in certain states because they are afraid of breaking their local regulations. It's extremely paranoid about who it does business with and people have had their accounts closed for buying from Coinbase and then selling on Local Bitcoins. It probably reports anything and everything just to comply with regulations.

Yeah I agree, Coinbase are overly cautious with their compliance of regulations.

So what happens to the customers balances? Will they be held by the feds until they figure out the money trails?

Just when you think things are getting simpler, then all on a sudden incidents like this appear. these kind of incidents make a bad impression on the outside world and bitcoin community.

Thats exactly the reason of this shutting down. Dont believe BS the feds say about the charges. The point isnt about to charge the owners,

it well end the same as mtgox the whole amount will be auctioned, or otherwise if they can prove that those coins come from their wallet, they can consider something like 20%, like kraken did with mtgox?

THis they are all just a bunch of pigs that have been told by there masters what to do.

Who cares.  All the "community" cares about is getting rich out of this.

Sonny Vleisides of BFL used BitPay to launder over ten million dollars worth of bitcoins treating it like an exchange as I've fully documented. That one million dollars worth of bitcoins from HashTrade that BitPay processed, then showed the world via a press release, had not one satoshi of the bitcoins sent to BFL from HashTrade outside of BitPay's system.

Since 2013 I've inquired about that transaction and the ONLY time it was mentioned by any camp was from BFL's cockroach after I made the mistake of inquiring about a different entity.

https://bitcointalk.org/index.php?topic=150803.msg9353498#msg9353498


https://bitcointalk.org/index.php?topic=150803.msg9353552#msg9353552


That's how these lyin' cocksuckers play in this space!

At least I see that the LEOs are honing in on Jeff Ownby, where one day his ass will be in the slammer and his wife will be fuckin' some other dudes not wanting to wait forever for his release.

Anon Gambler: Here's my bitcoins. Let me play on your site.
Jeff Ownby: You're good to go, bud.
AG: Thanks.
AG: I wish to cash out now.
Jeff Ownby: Here you go.
Laura Ownby: Honey, when can be take our next vacation?
Jeff Ownby: I'm processing the expenses needed now, dear.

What effect will this have on the market, do people think? Will the auction oversell bitcoin like with gox auction?

Preet Bharara U.S. Attorney for the Southern District of New York <---- I hate this guy so much. he was what killed online poker for the U.S.


(he is who filed this lawsuit)

This is good.  They are actually trying to find the fuckers behind cryptolocker.  Coin.mx was helping the Cryptolocker guys and the Fed is trying to get to them.  Good to see Coin.mx get fucked.

Silk Road was what got Charlie Shrem on their radar.  But he was charged with " unlicensed money transmitting business.". 

So I expect that Coin.mx will likely be close to the same.  They were transmitting money without proper license (IE money laundering).

I wouldn't count on the feds doing anything quickly or reasonably.  I'm guessing this will take a long time, and they wont care whose btc are whose.  I'm guessing they will be auctioned off in a year or 2.

It is too bad for the legitimate customers who will be screwed, but it sounds like coin.mx deserved to be shut down for apparently knowingly allowing ransomeware criminals to launder money thorugh them.

Yeah, when gangsters confiscate your property, don' t hold your breath expecting it back. 


You misread the report.  They helped victims to obtain coin, not helping ransomware creators to move coin. 

It might not be revelant here bt the feds in murica really do alot of BS,

Jus check out the story on aaron shwartz !

They were running a unlicensed money transmitting business from the U and probably with US clients. they should have seen it coming. Don't people see this forum? Folks are arrested in the states for much less...

As for the rest, if they were helping ransomware or not, we can't know for sure...

Nice to know that the feds can make up charges any time they want.

Do people really think it is ok for ransomware thieves to cashout?

I hope it'll never stop.
I'm not ready yet accumulating.

fucking regulators. the whole point of bitcoin is that you dont need an id to use it. it is supposed to be decentralized and free. we need more darknet financial servies.

Are you talking about the uniformed gangsters that took all the Coin.mx stuff?

I'm not sure I'm personally going to go after the guys who made their boots, for example. 

I'm just trying to stir things up cause I'm pissed off about how totally fucked the injustice system is to allow this kind of thing to go down.  Sorry bro. 

I think it is more useful for exchanges.  Make sure you have all your paperwork in line, or do not operate in the states you don't is really the end of story.

Some mentioned coinbase I don't think  we will see this effect coinbase.  If they are hit it would be a huge blow.   But coin.mx going down does not really to have changed BTC price much... so that is good.

they should operate abroad and not in america where IRS and governments will control the fuck out of everything you can dream to do

i'm not aware of the rules in america, but if you have your business abroad they can't touch you i guess

I guess you missed my post, eh?

Two people replied no, so he went and did it.

Doesn't the accusation say that coin.mx KNEW that these coins were coming from ransomware? So it might not be because they traded bitcoins without a license but that they took part in a crime and not stopped it even though they knew it.

Possible?

No one needs to worry about Coinbase since it's a U.S. government honeypot anyway.

And where did you come up with this?

I think it's one of the more trusted exchanges.  I have never had a issue with them.

Being a government data collection site has nothing to do with services rendered. In fact, I would expect them to work perfectly if they were a honeypot. It's hard to collect data if no one uses your service.

I doubt they were created that way. But it doesnt matter. They are a honeypot anyway since since edward snowden we know that all the big providers of internet service are forced to let the NSA read every traffic they have. They are forbidden to speak about otherwise they would get real problems. There was a guy that ran an anonmous email service. He was forced to do the same but since he didnt wanted and there was no solution he simply closed the service. Even though it was a good business. Guess there are some standup persons in the US still.

Oh, I agree. I don't think any business starts as a honeypot. I think the anti-freedom, patriot act loving, AmericanMaggotLegislators/KillYourCustomer totalitarian government threatens the business and recruits them or forces them out of business

I decided to make an account anyway because it looked like the simplest way to buy bitcoins using my credit card. fortunately I was not affected...do not leave your money on exchanges!

basically shut down and under investigation. The coins will probably be confiscated by the authorities and users will never get to use them again (like Silk Road).

I believe with silk road there was the chance to claim your coins. They did not belong to silk road. The thing is... most probably no one did this since he would be connectable to his account. And what did he do there? Selling drugs? Or buying them?

I wonder if there was a legit thing to buy at all, i mean so that a customer only has bought legit items. There is always a reason to use such website so even when someone bought legit things, maybe he wanted to hide the origin of his coins then.

But when the coin.mx coins are in possession of the state then most probably legit users will have the chance to claim them.

Yes, me too. I was in the process of verification since I was about to order from the foreign country, so they needed additional documents. Even they didn't know what was coming, poor bastards.

And thanks God that my verification took as long, I would maybe stay without my money.
I still can't believe that the customers won't get their coins/money back and that these coins will be seized by the US government.

People should launch a court case against america, take it to the UN.  The gov of America are utter bastards.

Yeah, that's the worst part, how are you just gonna confiscate other people's money, your citizens money in a so called democracy?

And then you will take these "legaly" confiscated funds and sell them in some auctions! Completely incredible!

keep in mind that any exchange may conceivably someday shut down without warning (like MtGox), so don't keep large amounts with them long term; withdraw the coins to a secure wallet under your control.

Since the basis for this case (as I understand it) is that they were operating without a license, does that mean any high volume trader on localbitcoins requires a money transmitter license if they operate in the US?

RE: coinbase

I have account with coinbase and I told my accountant and claimed by BTC profit when he did my tax returns..  like a good sheep to the good old USofA

but I leave only a couple BTC there and the bank account its linked to is a "disposable" bank account special for coinbase. and of course the IRS knows about my other bank accounts.

That's why exchanges and other hosted  eWallets should not be where large amounts of coins should be parked, except when needed for trading.

Depends on the state.  They are definitely required to be registered with FinCen.

It's shameful the amount of wickedness the U.S. enjoys at incarcerating a maximum amount of people who are not with the establishment.

Yes I'm sure they have broken licensing regulations.

Was the business built to defraud their customers ? No!
The agents themselves confirm having made successful exchanges on the platforms!

Couldn't the authorities contact them and give them a warning that you need to be licensed otherwise we will shut you down ?
Impose a fine too at some point!

Why is it:

Big corporations are fined for corruption, malpractice, tax evasion schemes.
Small companies have their owners incarcerated.

Oh! it's because when you are too big to fail the U.S. happily lets you pay your way out in the billions and management goes scot-free.
"Six banks fined $5.6bn over rigging of foreign exchange markets" http://www.ft.com/intl/cms/s/0/23fa681c-fe73-11e4-be9f-00144feabdc0.html#slide0.
Of course there is not even the slightest hint of any employee being under investigation. If coin.mx owner goes to jail then put JP Morgan CEO behind bars too!

Poloniex twitted this the other day:
https://www.bitcoin.com/en/bitcoin-news/1801388864699469581-poloniex-leaves-new-york-due-to-bitlicense

So anyone holding coins in New York withdraw them, or else you will lose them.
As expected, regulations start ruining Bitcoin and companies will be forced to leave wherever those insane regulations are taking place.

I am still getting spam mail from them, even though I never used the exchange before they were busted. I had signed up for an account though when it first opened up. I just never could justify the high fees to myself. The convenience did not outweigh the fees.


Glad I never got caught up with them.