BTC-e.com down ! Police detains the owner .

[NorrisK]

BTC-e back again, I just saw their announcement on local russian forum (just can't read what is it meaning)

Link, please, if different than this one: https://bitcointalk.org/index.php?topic=2056158.msg20505927#msg20505927

BTC-E posted an update today in the Russian local thread that they were able to access their databases and purses and they are currently assessing it and this information would be made public before the end of next week.

https://bitcointalk.org/index.php?topic=2063529.0

It's nice that they haven't disappeared entirely yet. I guess we can hold out a tiny sliver of hope. That's a fairly ominous message about Mayzus and their fiat flow, though. If they were so intent on remaining anonymous, I would think they'd move most fiat funds offshore, only using Mayzus for immediate processing.

It would be very foolish of them to hold all fiat funds in 3rd party bank accounts... Better to muddy the paper trail with multiple offshore shell companies.

Them not completely disappearing can also mean they are buying time before the hounds are released and they get swamped with letters from lawyers.

I still have a tiny spark of hope of seeing my NMC back, but I'm not counting on it really.

[Gleb Gamow]

If bitcoin is "used" by terrorists, money launderers and criminals.

Why is this the only case where someone was "identified" for "money laundering"?

 

I don't think this is the first case of Money Laundering, just the biggest so far. Think back to Charlie Shrem & Btc King, Coin.MX, The poor dudes in Florida that were just exchangers on LocalBitcoins but without a liscense, etc.

I just think they are starting to crack down on the more blatant services that fascilitate easy no-id transactions that most definitely attract the wrong crowd.

Just wait until they start going after the gambling scene, you can call all of the profits made off of US customers "illegal" & anyone whom deals with these funds are by nature "Money Laundering".

And don't forget about Burt Wagner in CO. They even took his daughter's U$600 kept in a piggy bank which was returned to her via funds raised from this community.

[BitWhale]

And don't forget about Burt Wagner in CO. They even took his daughter's U$600 kept in a piggy bank which was returned to her via funds raised from this community.

Jesus, you serious? They even took the piggybank. I guess I'll have to think of another place to store my in-house illicit gains. (LOL sometimes I'd love to know what goes through these agent's heads when they do stuff like that).

[MAbtc]

Them not completely disappearing can also mean they are buying time before the hounds are released and they get swamped with letters from lawyers.

Buying time? Their domain was seized by the FBI and the owners face prison time if they are ever found. I think the last of their concerns are lawyers from disgruntled former customers. Where would you even send legal correspondence, and in what jurisdiction? They were legally organized in multiple jurisdictions. Nobody knows who the owners are. Nobody knows where the money is and how much they control. It's a total crapshoot.

I suspect hiring lawyers at this point (unless/until it becomes clear that US law enforcement was able to seize considerable funds) is going to be a huge waste of time and money. The best shot at partial repayment is if they somehow relaunch or at least set up a refund process..... but the chances of that happening are low. Still, there is a better chance of that than getting anything from the US government.

[Gleb Gamow]

And don't forget about Burt Wagner in CO. They even took his daughter's U$600 kept in a piggy bank which was returned to her via funds raised from this community.

Jesus, you serious? They even took the piggybank. I guess I'll have to think of another place to store my in-house illicit gains. (LOL sometimes I'd love to know what goes through these agent's heads when they do stuff like that).

"Men, before we take the little girl's piggy bank,
we need to make sure there's not a bomb hidden inside."

[Gleb Gamow]

Them not completely disappearing can also mean they are buying time before the hounds are released and they get swamped with letters from lawyers.

Buying time? Their domain was seized by the FBI and the owners face prison time if they are ever found. I think the last of their concerns are lawyers from disgruntled former customers. Where would you even send legal correspondence, and in what jurisdiction? They were legally organized in multiple jurisdictions. Nobody knows who the owners are. Nobody knows where the money is and how much they control. It's a total crapshoot.

I suspect hiring lawyers at this point (unless/until it becomes clear that US law enforcement was able to seize considerable funds) is going to be a huge waste of time and money. The best shot at partial repayment is if they somehow relaunch or at least set up a refund process..... but the chances of that happening are low. Still, there is a better chance of that than getting anything from the US government.

"Holy shit! We've been served another legal letter from a lawyer."

[SDRebel]

Why is this the only case where someone was "identified" for "money laundering"?

Wasn't Ross Ulbricht charged with money laundering? This is just the first time that a large bitcoin exchange has been targeted for it. I sympathize less with funds on darknet markets getting seized, since users should know that this is always a risk. But on a long-running public bitcoin exchange? A lot of legitimate traders and miners will be devastated by this. I always thought of 3rd party exchange risk as risk of hacking or exit scam. The FBI targeting legitimate exchanges brings all new risks to trading crypto...

I agree that there was alot of innocent bystanders hurt, hopefully they will learn to store coins off-line in the future now in order to minimalize the risk of having your coins stolen/confiscated.

That's really what the problem is here:

Each bubble we get a new wave of users coming to the forums, most of which have never ventured outside of their Coinbase account. It leads to easy hackings & giant losses for those who don't know any better.

I suppose it's our job to help show these people, but when I try to show my friends in real life they say "It's just alot of work", not realizing that if you are going to be your own bank, you also have to be your own security advisor.

but if you do trading, there's no other way than to have your coins in the exchange...sure, dont count on it for long term, but it's the only way to trade

[SDRebel]

BTC-e back again, I just saw their announcement on local russian forum (just can't read what is it meaning)

Link, please, if different than this one: https://bitcointalk.org/index.php?topic=2056158.msg20505927#msg20505927

BTC-E posted an update today in the Russian local thread that they were able to access their databases and purses and they are currently assessing it and this information would be made public before the end of next week.

https://bitcointalk.org/index.php?topic=2063529.0

thanks

[jc01480]

A lot of misinformation in the media.  I hope the exchange can survive this event, get access to coins again, and come into compliance with the necessary regulatory bodies.  Amazing to me how you don't have to be a US citizen, never step foot in the US, and can be nabbed for extradition to the US for alleged money laundering crimes against the US.  (Because every criminal indictment will include some language about "...against the peace and dignity of the United States of America," etc.).

[Gleb Gamow]

A lot of misinformation in the media.  I hope the exchange can survive this event, get access to coins again, and come into compliance with the necessary regulatory bodies.  Amazing to me how you don't have to be a US citizen, never step foot in the US, and can be nabbed for extradition to the US for alleged money laundering crimes against the US.  (Because every criminal indictment will include some language about "...against the peace and dignity of the United States of America," etc.).

Just one small step toward the US morphing into the United Federation of Planets, its HQ in San Francisco.

"Jim, must we stop every time Spock mind melds with a rock to learn
if it has seen Paul Vernon in this cave?"

"No, captain, this one hasn't seen Paul either. Where's Bones?
She's about to go in labor."

 "Jim, remember that time we were in that cave looking for Paul Vernon?
I'm still not a geologist, but on that day I played my part for the UFP as a Geo-OB-GYN."

[Chef Ramsay]

The Bitcoin Group #153 - BCash Launches - BTC-E Claims (@18:45) - Cloning Bitcoin - The Future
https://www.youtube.com/watch?v=NXP2TzjODqY

[BitWhale]

but if you do trading, there's no other way than to have your coins in the exchange...sure, dont count on it for long term, but it's the only way to trade

Yes I agree with you, sadly there is no real easy way to avoid exchange risk. Shapeshift is probably the most innovative exchange I can think of, yet there are still many attack vectors that you can't really avoid.

At this given time, you have to take risk to exchange out your coins. I just try to minimalize that risk as much as possible by doing business with liscensed US exchangers (since I'm a US customer) for all btc/usd transactions, storing all my coins on hardware wallets or clean encrypted offline laptops which are used for nothing else, and doing a decent amount of research on any given exchange EVERY TIME I am looking to deposit some coins. I also withdraw all coins within 1 hour of them being exchanged/deposited.

At the end of the day, you could still deposit and be that last deposit before "the big hack", there is no avoiding that sadly. But making sure to withdraw your coins after exchanging and not using exchanges as storage vaults greatly diminishes the chances of this happening.

Surprisingly, at one point or another, I've done business with every large exchange that has gone down/been hacked except for Bitcoinica & I've never lost coins to an exchange *knock on wood*. I might be lucky, but I also know that removing all coins from exchanges quickly after deposit has saved my ass many times.

[marky89]

but if you do trading, there's no other way than to have your coins in the exchange...sure, dont count on it for long term, but it's the only way to trade

Yes I agree with you, sadly there is no real easy way to avoid exchange risk. Shapeshift is probably the most innovative exchange I can think of, yet there are still many attack vectors that you can't really avoid.

Unfortunately, Shapeshift's service doesn't support fiat currencies (which is also one of the reasons they can operate as they do). There are times when you can't hedge in altcoins; when bitcoin is dropping and altcoins are dropping harder, you need to find an exchange to hedge the fiat value of your coins. But increasingly, it seems like it's better to just weather the storm and hold for the most part.

At this given time, you have to take risk to exchange out your coins. I just try to minimalize that risk as much as possible by doing business with liscensed US exchangers (since I'm a US customer) for all btc/usd transactions

This seems more and more important now. If an exchange does business with US customers, they need to be licensed as an MSB and do AML/KYC. Otherwise there is risk of FBI seizure...

[BitWhale]

I also like to look at it this way...

here's 2 scenarios for the average trader:

Trader #1: the cautious type
-always stores coins outside of exchanges
-has a solid entry, exit, & stoploss strategy before taking the trade
-has some sort of "bankroll" management and never puts more than a certain percentage into a single trade

Trader #2: the ambitious newbie
-likes the idea of margin trading because he thinks it can boost his profits
-habitually stores coins on exchanges
-has little concept of "bankroll management" and routinely puts more than 50% of his current account balance on a single leveraged trade

Trader #1 has set himself up to remove all unnecessary risk, as well as found a comfortable level of "risk" so he can sleep at night and isn't constantly worried about his position. He has a plan & knows he can afford to lose a few trades and still live to trade another day.

Trader #2 is seeing Altcoin-bought Lambos and has his judgement clouded. He neglects to realize that his leveraged position not only carries Margin-call risk, but also carries the risk of the exchange taking off with his coins. His leveraged position will also have giant swings in value, giving him a larger chance of trading on fear/emotion & closing his position at a loss.

---------------------------------------------------------
Now let's talk about the fallacy of Margin trading:
With 2.5x leverage (Poloniex), you aren't really doing that much... in example:

balance: 1 btc

100% of balance @ 1 leverage = 1 btc (buying outright gives you zero chance of force liquidation because the coins are actually yours)

50% of balance @ 2.5 leverage = 1.25 btc (+0.25 extra trading capital)
75% of balance @ 2.5 leverage = 1.875 btc (+0.875 extra trading capital)

Current hypothetical saltcoin price: 0.001

Now let's say you open a long salt/btc position for 75% of your balance using full 2.5x leverage for 1.875 btc total. You now need to keep 20% of the borrowed value (1.875 * 20% = 0.375 btc) in your account at all times or you will have a forced liquidation.

1.875 btc / 0.001 = 1875 saltcoins

now say tomorrow saltcoins drop to 0.0009, a 10% decrease:
0.0009 * 1875 = 1.687 btc (-0.188 total loss & current balance of 0.812 btc)

now say the next day saltcoin drops to 0.00072, a 20% decrease:
0.00072 * 1875 = 1.35 btc (-0.535 total loss & current balance of 0.465 btc)

now say the next day saltcoin drops to 0.000666, a 7% decrease:
0.000666 * 1875 - 1.2487 btc (-0.6263 total loss & current balance of 0.3737 btc)

The salt is real.

By just day three, Trader #2 is now in forced liquidation, if he is lucky he will walk away with 0.35 btc out of the 1 btc he deposited, a 65% forced loss due to a 37% move.

Was it worth the extra 0.875 btc to have the risk of being margin called? I see coins move 35% EVERY DAY gentlemen, you lose your edge by not being able to hold through the down days... The same thing can be said for using 50% of your balance margin trading on 2.5x leverage, is the 0.25 btc extra trading capital worth the added risk of a margin-call?

Sounds like a good way to rig it against your favor, and these numbers don't even begin to include interest rate payments.

---------------------------------------------------------
Say both Trader #1 & Trader #2 get lucky and call the market correctly. Saltcoin rises 10x.

Trader #1 has turned his 1 btc investment into 10 btc, a fantastic profit, with minimal risk of losing their coins to an exchange hack & zero risk of a forced liquidation.

Trader #2 has turned his 1 btc investment into 18.75 btc (minus interest) with giant risk of being margin called (*think bitfinex flash crash*) and absolutely zero ways to mitigate the risk of storing his coins on an exchange.

Trader #1 trades for longevity & a prosperous future.
Trader #2 just wants a Lambo and doesn't mind gambling.

What type of trader are you?

(Lol sorry Canada)

[aesma]

BitWhale : you forgot the whales. People holding thousands of BTC can afford to have hundreds on exchanges without the same level of risk as people holding much less.

[Netnox]

Hopefully BTC-E like many company are storing bitcoin in cold wallet out of datacenter server... i'm assuming FBI seized datacenter of website, they definetly seized the hot wallet... but there is hope btc-e have backup out of datacenter...

I hope they have backup... if so there is hope for bitcoin to be refunded, or website be backup... if they truely didnt arrest real owner...

I hope that most of the funds were in the cold storage, and at least 50% of what is owned to the users could be returned to them (I myself lost around $300). But are you sure that they are still in the possession of the user data? I heard that the FBI seized that as well.

[BitWhale]

BitWhale : you forgot the whales. People holding thousands of BTC can afford to have hundreds on exchanges without the same level of risk as people holding much less.

No matter the size of the aquatic animal, our job as traders is to manage risk. If you are storing coins on an exchange, you are not doing a good job at managing unnecessary risk.

Even lending makes no sense. Calculate the risk of any given exchange closing over the next year by using all previous exchanges as examples. Let me know if the yearly interest equates to more than the avg risk of an exchange going down resulting in a loss of 50% or more (hint: you are better off putting all your coins on red).

All sizes of marine life should avoid storing coins on exchanges, from guppy to whale shark.

That being said, if you want to risk 1-10% of your capital gambling on Margin-trading, feel free. I just see no reason to do that when the returns from Bitcoin/altcoins already dwarf the returns of traditional markets 10 fold. There comes a time when you got to ask yourself, how much is enough? What level of risk is acceptable for long term prosperity? This of course comes down to subjective opinion because each of us has a different risk tolerance...

[aesma]

If I had a large stash I would probably not trade, not because of the risk but because "why bother ?". I'd be enjoying life in other ways.

I've done a bit of margin trading recently, treating it as casino aka starting with a sum and ready to lose it, well it was fun while it lasted but I did lose it. If I had more coins to spare I could have held on some trades longer and probably lost less, unless of course I'd have gambled more funds...

[Mandoy]

BTC-e shit is down     LOL  

I warned about BTC-e(and many like them) since years ago...    

https://www.reuters.com/article/us-greece-russia-arrest-idUSKBN1AB1OP

https://www.reuters.com/article/us-greece-russia-arrest-suspect-idUSKBN1AB1VR


BTC value will drop for sure  

I have heard that btc-e have been raided by the Federal Bureau of Investigation and has confiscated their equipment but the arrest in your post was in Russia. I guess the person that was arrested was arrested not because he is involved in BTC-E but rather due to his dealings with criminal transactions. Some are sad of this event but some are happy because he can no longer abuse the use of bitcoin in criminal transactions.

 But I disagree that with BTC-e being down will affect bitcoin, after the segwit activation losing one exchange will not hamper the increase of bitcoins value. Bitcoin will continue to increase even though BTC-e is down.

[Vishnu.Reang]

This is the latest information from BTC-e that we have:

https://bitcointalk.org/index.php?topic=2063529.0

We were able to access our databases and wallets, at the moment we are evaluating data and balances on koin, this information will be made public by the end of next week.

Seems like the user-data is safe. But I am not sure about the status of the cold-wallets and the hot-wallets.