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Author Topic: Bitcoin is money laundering... according to some  (Read 5262 times)
pandemic
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June 02, 2011, 06:28:40 PM
 #1

So I had a trial at StratoGen for their cloud hosting. I was tinkering with it and thought I'd load up bitcoinplus.com on it. Well I got this email this morning:

Quote
Dear xxxxx,

Our technical team noticed some unusual behaviour coming from your trial such as maxing out CPUs contently, and odd traffic profiles under further investigation. We found the severs to be running virtual money software which has linked with money laundering.

We therefore we deem your usages to be in breach of our AUP and have suspended you trial.

xxxxx xxxxx

Technical Director

StratoGen :: Hosting for Business
T: 0845 544 0465
M: 0773 606 2097
E: xxxxx@stratogen.net:: http://www.stratogen.net  


Replied with:
Quote
Yes, I've run some hashing programs on there to determine CPU processing power. It's actually completely legal though (http://bitcoin.org/). I'd suggest you look into it rather than just accusing me of illegal activities. The CPU's were maxed for a while but I've got no idea what you mean by odd traffic profiles. Aside from using nearly 100% CPU for a few days, I've done absolutely nothing wrong and nothing that'd be against your AUP or TOS.

And then received this:

Quote
Dear xxxx,

The account was suspended because our engineers saw the bitcoin application running which is considered a highly suspicious, offers no real benchmarking capability and is seen as a tool to utilise CPU to generate virtual currency which can be currency exchanged into legitimate currency.

The Bitcoin project is currently under investigation from many governments including UK serious fraud office. Several other similar projects have been closed down in recent years for money laundering offences.

Please can you give us a little more information about your company including company telephone and email addresses as the platform has been designed as an enterprise hosting environment and therefore is best suited to this, we need to ensure the service we offer is best suited to your requirements.

Kind regards

xxxx xxxxx

Technical Director

StratoGen :: Hosting for Business
T: 0845 544 0465
M: 0773 606 2097
E: xxxxxx@stratogen.net:: http://www.stratogen.net  

Thought you guys would get a chuckle out of this. I do own a legit hosting business and was looking into cloud hosting from stratogen. Oh well.

replied:

Quote
It's fine. I do own a hosting company that's hosted in Atlanta, Georgia. I'm not a huge company yet but I do have a few racks. Honestly, I don't really care much about StratoGen. Cool service but I'm not impressed by how you manage clients. I would have preferred you email me to discuss the high CPU rather than suspending it. God knows what would have happened had I tested a file hosting site that used up 1Tb of information per day. I'm sure that would have been seen as illegal file sharing and your "Unlimited Internet Bandwidth" would have meant nothing.

I'm astonished that you closed the account simply because of high CPU usage. Especially since first you accused me of money laundering and now "The Bitcoin project is currently under investigation from many governments including UK serious fraud office."

I've learned everything I need to know about about your company in these few days.

Thanks,
xxxx
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Drifter
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June 02, 2011, 06:36:58 PM
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The Bitcoin project is currently under investigation from many governments including UK serious fraud office.

Well I certainly find that interesting.

mewantsbitcoins
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June 02, 2011, 06:37:42 PM
 #3

They simply don't want 100% cpu utilization as their business depends on spare capacity and they made up few reasons to cancel it

I like this one  Grin Grin Grin
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The Bitcoin project is currently under investigation from many governments including UK serious fraud office. Several other similar projects have been closed down in recent years for money laundering offences

Ask them how do they know Bitcoin is under investigation by many governments?
pandemic
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June 02, 2011, 06:40:01 PM
 #4

I replied. They can blow it out their ass, lol. Probably the most valuable trial ever.
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June 02, 2011, 06:44:22 PM
 #5

Yeah probably mostly motivated due to the CPU usage.  Secondarily because they are afraid bitcoin will become illegal and they will get shut down for allowing people to generate coins on their servers.

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cypherdoc
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June 02, 2011, 07:21:55 PM
 #6

So I had a trial at StratoGen for their cloud hosting. I was tinkering with it and thought I'd load up bitcoinplus.com on it. Well I got this email this morning:

Quote
Dear xxxxx,

Our technical team noticed some unusual behaviour coming from your trial such as maxing out CPUs contently, and odd traffic profiles under further investigation. We found the severs to be running virtual money software which has linked with money laundering.

We therefore we deem your usages to be in breach of our AUP and have suspended you trial.

xxxxx xxxxx

Technical Director

StratoGen :: Hosting for Business
T: 0845 544 0465
M: 0773 606 2097
E: xxxxx@stratogen.net:: http://www.stratogen.net  


Replied with:
Quote
Yes, I've run some hashing programs on there to determine CPU processing power. It's actually completely legal though (http://bitcoin.org/). I'd suggest you look into it rather than just accusing me of illegal activities. The CPU's were maxed for a while but I've got no idea what you mean by odd traffic profiles. Aside from using nearly 100% CPU for a few days, I've done absolutely nothing wrong and nothing that'd be against your AUP or TOS.

And then received this:

Quote
Dear xxxx,

The account was suspended because our engineers saw the bitcoin application running which is considered a highly suspicious, offers no real benchmarking capability and is seen as a tool to utilise CPU to generate virtual currency which can be currency exchanged into legitimate currency.

The Bitcoin project is currently under investigation from many governments including UK serious fraud office. Several other similar projects have been closed down in recent years for money laundering offences.

Please can you give us a little more information about your company including company telephone and email addresses as the platform has been designed as an enterprise hosting environment and therefore is best suited to this, we need to ensure the service we offer is best suited to your requirements.

Kind regards

xxxx xxxxx

Technical Director

StratoGen :: Hosting for Business
T: 0845 544 0465
M: 0773 606 2097
E: xxxxxx@stratogen.net:: http://www.stratogen.net  

Thought you guys would get a chuckle out of this. I do own a legit hosting business and was looking into cloud hosting from stratogen. Oh well.

replied:

Quote
It's fine. I do own a hosting company that's hosted in Atlanta, Georgia. I'm not a huge company yet but I do have a few racks. Honestly, I don't really care much about StratoGen. Cool service but I'm not impressed by how you manage clients. I would have preferred you email me to discuss the high CPU rather than suspending it. God knows what would have happened had I tested a file hosting site that used up 1Tb of information per day. I'm sure that would have been seen as illegal file sharing and your "Unlimited Internet Bandwidth" would have meant nothing.

I'm astonished that you closed the account simply because of high CPU usage. Especially since first you accused me of money laundering and now "The Bitcoin project is currently under investigation from many governments including UK serious fraud office."

I've learned everything I need to know about about your company in these few days.

Thanks,
xxxx

whats with their horrible English?
pandemic
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June 02, 2011, 10:19:18 PM
 #7

They're British  Grin
pandemic
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June 02, 2011, 10:40:08 PM
 #8

This is from the UK serious fraud office:

Our aim is to protect society from extensive, deliberate criminal deception which could threaten public confidence in the financial system.  We investigate fraud and corruption that requires our investigative expertise and special powers to obtain and assess evidence to successfully prosecute fraudsters, freeze assets and compensate victims.


Sounds exactly like bitcoin...
mewantsbitcoins
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June 02, 2011, 10:44:34 PM
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Our aim is to protect society from extensive, deliberate criminal deception

They should investigate the financial system
Bazil
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June 02, 2011, 11:07:45 PM
 #10

This is from the UK serious fraud office:

Our aim is to protect society from extensive, deliberate criminal deception which could threaten public confidence in the financial system.  We investigate fraud and corruption that requires our investigative expertise and special powers to obtain and assess evidence to successfully prosecute fraudsters, freeze assets and compensate victims.


Sounds exactly like bitcoin...

I'm sure them seeing Bitcoin as a potential threat to the Pound would give them every reason (in their own minds) to seize every bitcoin they find in the UK.

17Bo9a6YpXN2SbwY8mXLCD43Wup9ZE4rwm
hazek
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June 02, 2011, 11:28:16 PM
 #11

I think that's what it ultimately is going to come down to. And it's whether or not we can keep our exchanges open and running despite obviously being attacked with money laundering, illegal trade facilitating, ect charges.

My personality type: INTJ - please forgive my weaknesses (Not naturally in tune with others feelings; may be insensitive at times, tend to respond to conflict with logic and reason, tend to believe I'm always right)

If however you enjoyed my post: 15j781DjuJeVsZgYbDVt2NZsGrWKRWFHpp
charliesheen
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June 03, 2011, 01:10:44 AM
 #12

I have found 2 other Atlanta Bitcoiners. So currently there are at least 4 of us. http://atlantabitcoin.com

pandemic
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June 03, 2011, 01:41:06 AM
 #13

And can they actually disrupt the bitcoin exchange? Doesn't sound like it...
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June 03, 2011, 02:03:40 AM
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Civil Liberty Through Complex Mathematics
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youtube.com/ericfontainejazz now accepts bitcoin


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June 03, 2011, 05:21:17 AM
 #15

I have found 2 other Atlanta Bitcoiners. So currently there are at least 4 of us. http://atlantabitcoin.com

Omg that website is just great!

"We will not find a solution to political problems in cryptography, but we can win a major battle in the arms race and gain a new territory of freedom for several years.

Governments are good at cutting off the heads of a centrally controlled networks, but pure P2P networks are holding their own."
pandemic
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June 03, 2011, 12:52:24 PM
 #16



LOL
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June 03, 2011, 03:25:18 PM
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*Chuckle*. Came to see this, was not dissapoint, will visit new threads again. A++++

Seriously OP, don't be mad, they're just using their CPUs for their own bitcoin mining and you were just biting into their prophets Wink
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June 03, 2011, 03:33:54 PM
 #18

According to some, advocating peace and free trade makes a person a "terrorist". Some can go to hell.

No king but Christ; no law but Liberty!

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casascius
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June 03, 2011, 03:38:39 PM
 #19

I'm not sure what the problem is.  I'm a huge fan of Bitcoin (obviously), but I side with the provider on this one.  CPU in a VM hosting environment is a shared resource, if I'm running a VM hosting facility, no customer has the right to max out my CPU unless they are paying me for the privilege, like, they better be selling lots of alpaca socks or something to help pay the fees I'm going to charge for the excessive usage.  And you would have to be kidding me if you'd expect me to let a free trial account to monopolize CPU.  Most legitimate free trials in the ordinary course of business should use an average of well under 1% of a single CPU core, because the typical usage scenario for a free trial is a website still under development with no or minimal real traffic that's not testing.

CPU increases power load by a significant factor, and power in a data center costs a lot.  There's the power, and then there's the air conditioning to take out the heat, and then there's capacity on the UPS's to keep that power reliable, and there's capacity on the generators to keep the power safe from outages, and then the air conditioning needs redundant power too so the whole place doesn't melt down in a power failure.  Way more than the cost of mining at home.  All this so someone can generate tiny fractions of a cent?  I don't think so.

Think of what Vladimir charges for his mining contracts.  That's a fair estimation of the resource cost being imposed upon this provider, without the benefit of GPU-scale mining output.

The reason this account got booted, in my estimation, has little to do with money laundering or their fear of alternate currency, and really everything to do with excessive resource consumption.

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
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June 03, 2011, 03:59:58 PM
 #20

I'm not sure what the problem is.  I'm a huge fan of Bitcoin (obviously), but I side with the provider on this one.  CPU in a VM hosting environment is a shared resource, if I'm running a VM hosting facility, no customer has the right to max out my CPU unless they are paying me for the privilege, like, they better be selling lots of alpaca socks or something to help pay the fees I'm going to charge for the excessive usage.  And you would have to be kidding me if you'd expect me to let a free trial account to monopolize CPU.  Most legitimate free trials in the ordinary course of business should use an average of well under 1% of a single CPU core, because the typical usage scenario for a free trial is a website still under development with no or minimal real traffic that's not testing.


When I asked linode about maxing out my CPU they responded with something along the lines of: max it out, thats what you paid for.

If anything the hosting plans have not been priced properly and the disconnect is proof that the host does not have things under control in terms of how much they need to charge.

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