Liberty Reserve is now dead (Good News For Bitcoin ?)

[forexmasterja]

Now that Liberty Reserve is dead is that good or bad for bitcoin?

I think its good because it should lead to more people adopting bitcoin.

Read Article -

http://krebsonsecurity.com/2013/05/reports-liberty-reserve-founder-arrested-site-shuttered/

I hope people will now learn not to put any trust in digital centralized monetary institutions. They all have the potential to fail eventually .. Egold, Liberty Reserve etc...

[CypressXM]

Ya but it's a bad sign overall IMO...

First they came for the communists,
and I didn't speak out because I wasn't a communist.

Then they came for the socialists,
and I didn't speak out because I wasn't a socialist.

Then they came for the trade unionists,
and I didn't speak out because I wasn't a trade unionist.

Then they came for the Jews,
and I didn't speak out because I wasn't a Jew.

Then they came for the Catholics,
and I didn't speak out because I wasn't a Catholic.

Then they came for me,
and there was no one left to speak for me.

[justusranvier]

First they came for the communists,
and I didn't speak out move to a safer country because I wasn't a communist...

[forexmasterja]

All I know is there is alot of people crying today for the funds that are now lost in Liberty Reserve. I wonder how much money was invested in Liberty Reserve .

[LiteCoinGuy]

"This is EXACTLY, EXACTLY, EXACTLY why Bitcoin is so important. It is a digital currency that is 100% completely decentralized. So even if one exchanger gets shut down or accused of negative press or [WHATEVER lame interventionist excuse here], the totality of the blockchain and the Bitcoin currency can continue to survive. I’m sure all of the bitcoin advocates will quickly quote this article, as this news clearly strengthens the argument.

Fiat currency is used for illegal activities also, right? But I guess the de-facto world reserve currency does not want any competition. There are thousands of legitimate people running businesses with libertyReserve and the like. Is it fair to those businesses to shut down an entire processor operation because of a few bad apples?

e-Gold and LibertyReserve are two good examples of digital currencies that had great potential as a practical alternative to wire transfers and fiat currency-based digital payment (i.e. credit cards). And look what happened to them (LibertyReserve I am unaware how long they have been offline)."

[QuestionAuthority]

Bitcoin exchanges could be next on the chopping block. MtGox could be closed tomorrow. This is why decentralized exchanges must be setup quickly. The evil empire of America will continue to march forward trampling everything in its path to keep its citizens enslaved.

[hashkey]

It's good for Bitcoin's image as that shows why one should choose Bitcoin for its decentralized feature.

Though I'm wondering what would happen to Bitcoin when the time comes when China privately manufactures fucktons of ASICs to do a 51% attack on the network to destabilize Bitcoin.

[flyingmonkeycrap]

Wow, yes this is a very very good sign for Bitcoin!!

[Melbustus]

...
Though I'm wondering what would happen to Bitcoin when the time comes when China privately manufactures fucktons of ASICs to do a 51% attack on the network to destabilize Bitcoin.

That's why I just bought a couple of ASICMiner's new 330mh USB sticks. We need A LOT more ASIC mining hardware running. Orders of magnitude more. Luckily there are more small, affordable units coming to market that will allow more people to run effective miners, but the network will still be vulnerable to malicious fab-plant operators for a whiole. The quicker more of this new mining hardware gets distributed, the better.

[virtualmaster]

They are good but also bad news.
- Good news because  Bitcoin will have less concurrence by digital currencies.
- Bad news because it is a warning also because governments will strike whenever they do it easy and profitable. Every currency, even centralized ones can be used by criminals and this can be used as good pretext to seize the founds. The seized founds can be used to pay and train new agents and so the system is self maintained.
Fortunately Bitcoin founds at this moment cannot be confiscated with profit only by exchanges so they are secure.
However by all currencies discussed in this forum Ripple is most likely to be seized in similar way than Liberty Reserve. Pretexts can be found any time there is a central unit which is vulnerable. The confiscated founds will cover the action and will bring even profit for the government so most likely it will happen.

[smoothie]

YES.

Centralized digital currencies (or forms of digital currencies in fiat or other forms) will be removed from the system via natural selection.

Good money drives out bad money.

Bitcoin Up. Liberty reserve taken DOWN. Just like Ripple will one day.

[EndTheFed321]

All I can say is

Nothing but Bad News for Bitcoin 

[countryfree]

Bad news. Not for the users of this forum of course, but there are people who don't know the difference between bitcoin and libertyreserve. They will just see that one way to keep your money online has been shut down down, and that many have lost their cash. All bitcoin supporters have to tell anyone they know that libertyreserve was a totally different system, and that what happened to it cannot happen to bicoin.

But I'm still waiting for explanations about what happened to libertyreserve.

[Rampion]

Insignificant news: we already knew Bitcoin is resilient to the kind of attack that brought down LR

[franky1]

All I can say is

Nothing but Bad News for Bitcoin 

why bad?

its the governments shutting down places that exchange FIAt without FIAT licences.

so now there are less online stores accepting dollar because
1. paypal is scam country
2. paypal has blocked 60 countries from doing online shopping
3. many other places people use to store their fiat to us on fiat accepting webshops, cant buy stuff.

so what needs to be done is go to all of these webstores that accepted liberty reserve and paypal before they got dropped. and tell them to accept bitcoin direct and they will never lose funds/ have funds frozen.

then we might someday have proper legit and regulated fiat/bitcoin exchanges to ensure these websites can cash out.

european's seem to be safer due to cheap licences. so how do americans get cheap licences.

create a main exchange and franchise out 50 parts of their business to each state, where each state has a customer service point and even a cash in the mail address/physical office in that state and each of those franchises get a cut of profits from the exchange.

that way its 50 investors as oppose to just 1 investor trying to get regulated. and it will work because as a franchise/subsidiary/agent of the main company. the main company is covered.

the worse part. is finding 50 people willing to put in enough for one licence.. but then again it shouldn't be hard with the amount of people on these forums saying they all want to set up a US exchange to replace the ones that have disappeared. imagine it instead of 50 people independently buying 50 licences just for them, they share the licence fee's between them and get to open state based exchanges

[Biomech]

All I can say is

Nothing but Bad News for Bitcoin 

why bad?

its the governments shutting down places that exchange FIAt without FIAT licences.

so now there are less online stores accepting dollar because
1. paypal is scam country
2. paypal has blocked 60 countries from doing online shopping
3. many other places people use to store their fiat to us on fiat accepting webshops, cant buy stuff.

so what needs to be done is go to all of these webstores that accepted liberty reserve and paypal before they got dropped. and tell them to accept bitcoin direct and they will never lose funds/ have funds frozen.

then we might someday have proper legit and regulated fiat/bitcoin exchanges to ensure these websites can cash out.

european's seem to be safer due to cheap licences. so how do americans get cheap licences.

create a main exchange and franchise out 50 parts of their business to each state, where each state has a customer service point and even a cash in the mail address/physical office in that state and each of those franchises get a cut of profits from the exchange.

that way its 50 investors as oppose to just 1 investor trying to get regulated. and it will work because as a franchise/subsidiary/agent of the main company. the main company is covered.

the worse part. is finding 50 people willing to put in enough for one licence.. but then again it shouldn't be hard with the amount of people on these forums saying they all want to set up a US exchange to replace the ones that have disappeared. imagine it instead of 50 people independently buying 50 licences just for them, they share the licence fee's between them and get to open state based exchanges

Any idea how much money you are talking about? (that looks snarky, but isn't. I honestly don't know.) I like this idea, in principle.

[Luckybit]

Now that Liberty Reserve is dead is that good or bad for bitcoin?

I think its good because it should lead to more people adopting bitcoin.

Read Article -

http://krebsonsecurity.com/2013/05/reports-liberty-reserve-founder-arrested-site-shuttered/

I hope people will now learn not to put any trust in digital centralized monetary institutions. They all have the potential to fail eventually .. Egold, Liberty Reserve etc...

It's bad for Bitcoin. Remember what E-Gold did? Kept people from Bitcoin.

[Littleshop]

Now that Liberty Reserve is dead is that good or bad for bitcoin?

I think its good because it should lead to more people adopting bitcoin.

Read Article -

http://krebsonsecurity.com/2013/05/reports-liberty-reserve-founder-arrested-site-shuttered/

I hope people will now learn not to put any trust in digital centralized monetary institutions. They all have the potential to fail eventually .. Egold, Liberty Reserve etc...

It's bad for Bitcoin. Remember what E-Gold did? Kept people from Bitcoin.

I disagree.  I think it will actually force a bunch of people to use Bitcoin. Some of these people will have honest businesses and others won't.  There simply are not many alternatives. 

[franky1]

Any idea how much money you are talking about? (that looks snarky, but isn't. I honestly don't know.) I like this idea, in principle.

how much money am i talking about.. well obviously 2%of the cost of just 1 exchange trying to cover every state of USA.. im not american, but lets say it cost Xmiillion for all of the licences to cover USA then a 50th (2%) is the average franchise price to get the licence for your state and be part of the same fiat network, where by you can then legally set up for instance
Texas bitcoin exchange if you live in texas
or
new york bitcoin exchange if you live in new york.
and then anyone from any state can interchange their bitcoins or fiat from one exchange to the other depending on what is the best price.

its just something a company like bitstamp or coinlab should/could think about.. to spread out its costs and increase its number of customer service support team, advertising campaigns locally, setting up more local other services.

they can even use each of the state offices as depots. much like amazon have transport depots where people can instead of using US postal services for legitimate products (non-silk road produce preferably) it can be used as a parcel depot for bitcoin businesses.

thus reducing the requirements of merchants needing to convert bitcoin into dollars purely to pay for postage.

there are many opportunities attached to it.
employees in each state office get paid in bitcoins. truck drivers moving between offices as part of the bitcoin postal service are paid in btcoin.
then the local state offices can each concentrate on getting brick and mortar fiat suppliers, manufacturers and retailers to take on bitcoin..

EG finding a local grocery store to accept bitcoin. and bam!! instandly offer food delivery fr bitcoin of all your baked beans bed meat and veg you want.
or the bitcoinstore able to have its own distribution network (using the franchises depots) around the US and not have to rely on amazons delivery network

the idea may seem like a stretch of the imagination. but i was just showing you a few stepping stones how one small idea can move onto more idea's and truely and legally kickstart bitcoins main-steaming

[matt4054]

OMG no this is bad news for alternate e-currencies in general, I would say.

I was implementing the LR API for my future BTC business, now I think I wasted my time... Is OKPAY next? Is this why BTC exchanges have problem with OKPAY now (thinking BTC-e)?

No, this is definitely not good news, even if BTC is unaffected, they are going to put the pressure on exchanges and money intermediaries now.

[franky1]

OMG no this is bad news for alternate e-currencies in general, I would say.

I was implementing the LR API for my future BTC business, now I think I wasted my time... Is OKPAY next? Is this why BTC exchanges have problem with OKPAY now (thinking BTC-e)?

No, this is definitely not good news, even if BTC is unaffected, they are going to put the pressure on exchanges and money intermediaries now.

maybe pressure needs to be put onto them.. after all

before now, bitcoin started up as zit faced inexperienced 'teentrepeuners' thinking the law didnt apply to them and they were kings of the world. atleast now we should start seeing experienced and well invested people doing a proper job, instead of trusting millions of dollars/coins in some 17yo kid that cries "i been hacked" purely to run off with the cash.

having people who invest their own money to get licences, are much more likely to stick with the project and secure it. and make sure it succeeds to get profit out of their investment.

we do NOT need any more teenagers buying a domain name for $10 and saying they can be trusted with millions of other peoples money.

you tell me honestly who would you trust more to look after your funds when you deposit in the morning and before you withdraw at night.... a well invested businessman with a team of employee's or some kid that just bought a domain name and done a bit of glossy looking coding

[Melbustus]

As someone else said, this is bad for businesses exchanging fiat for something else while operating without valid federal and state Money Transmitting licenses. The Dwolla/Gox action was the same thing.

The FinCEN guidelines basically told everyone that the period of doing this stuff without full regulatory compliance is over. It specifically noted the licenses that needed to be obtained and what sorts of businesses needed them, and now the gov is, *very predictably*, cracking down on those who ignored this reasonably explicit guidance.

Whatever you think of regulation (I think it's mostly ridiculous, personally), it's naive and stupid to ignore it if you fall under the definition of a money services/transmitting business.

So this is bad for the adolescent businesses operators who don't take this stuff seriously. There's no assault specifically on bitcoin. ... Yet.

[cheesylard]

First they came for the communists,
and I didn't speak out move to a safer country because I wasn't a communist...

Just say you don't hold any bitcoins. It's not like they can be seized or anything.

[Melbustus]

It's good for Bitcoin's image as that shows why one should choose Bitcoin for its decentralized feature.

Though I'm wondering what would happen to Bitcoin when the time comes when China privately manufactures fucktons of ASICs to do a 51% attack on the network to destabilize Bitcoin.

Next day they will need to manufacture another set of fucktons of ASICs to continue 51% attack with another hashing algo.

Yeah, hard fork is a solution and bitcoin would survive, but a lot of honest ASIC operators would lose a lot of investment. It'd be an ugly blow to the ecosystem. We need orders of magnitude more hashing power on the network as soon as possible.

[matt4054]

...but a lot of honest ASIC operators would lose a lot of investment.

Smart ASIC owners keep their GPU farm around the corner (actually my GPUs are still mining BTC), instead of reselling them. They might have a longer life cycle than expected, especially if scrypt and/or new hashing algorithms are used for successful altcoins and/or Bitcoin replacement, in your worst case scenario of a strong, evil entity taking over BTC.

That said, yes, they would lose their investment. Bitcoin is still VC, anything involving them is risky at this stage.

[movellan]

OMG no this is bad news for alternate e-currencies in general, I would say.

I was implementing the LR API for my future BTC business, now I think I wasted my time... Is OKPAY next? Is this why BTC exchanges have problem with OKPAY now (thinking BTC-e)?

No, this is definitely not good news, even if BTC is unaffected, they are going to put the pressure on exchanges and money intermediaries now.

Noticed this morning that the LR button is missing from the OKPay 'Add Funds' page. BTC is back after being unavailable for near a month but the max fee is up to 6%. Think I'll wait till BTC goes up further before funding OKPay again.


PS:  More bad news.  As of this morning, 5-28, BTC deposits are gone again from the OKPay 'Add Funds' page.

[Its About Sharing]

OMG no this is bad news for alternate e-currencies in general, I would say.

I was implementing the LR API for my future BTC business, now I think I wasted my time... Is OKPAY next? Is this why BTC exchanges have problem with OKPAY now (thinking BTC-e)?

No, this is definitely not good news, even if BTC is unaffected, they are going to put the pressure on exchanges and money intermediaries now.

I see the Liberty Reserve closer as a good omen for BTC. It brings us that much closer to a decentralized exchange.

Remember, it took taking Napster down in order for Bit-torrent to surface. As these central points of failure are removed, decentralized (like) replacements will have to come. (Unless of course
we take the regulatory route, but I just don't see us doing that 100%. It is better for us to apply pressure on the regulators and for them to meet us half way than us meeting their demands.)

[countryfree]

The BBC writes about it:

http://www.bbc.co.uk/news/technology-22680297

But we still don't know what's going on, and that's bad. The less we know, the more people will be scared of alt currencies and online banking.

[Brushan]

Liberty Reserve is nothing like Bitcoin. Bitcoin can't be stopped by governments and as long as exchanges pay for the proper licenses and behave according to them, then they won't raid those either. Everybody knew what LR was used for but they thought they couldn't be stopped because of being in Costa Rica. This shouldn't scare any bitcoiners.

[matt4054]

Everybody knew what LR was used for but they thought they couldn't be stopped because of being in Costa Rica. This shouldn't scare any bitcoiners.

I have used LR for legitimate purpose. However, I never felt like my money was safe over there. So I lost about 0.65$ in the process, I can deal with that loss... Still, I think it sucks because LR was a good option to move money between exchanges for instance.

[TheKoziTwo]

Well, in a sense it's good for bitcoin, because people will start realizing that what happened to e-gold and liberty reserve can, and most likely will, happen to PM, EP, STP and so on, whatever payment processor takes the throne after LR will become a target of the US government.

This could make more people interested in and accepting bitcoin for their business, but there is a bootstrap problem here, in those industries where LR was king: hyip, autosurf & other grey areas. It would probably require some of the biggest actors to start using it and promoting bitcoin for it to really win this market. It needs a majority using bitcoin. In order to accomplish that it must be integrated with the infrastructure so that it's easy to setup etc, but for now I think the volatility may prevent it from happen. If I where to guess, these people will jump on to the second best e-currency after LR, which may be PM or STP now.

[FoBoT]

this is how the government/establishment is going to come after ALL of US
we are all money launderers and criminals for using/mining bitcoin and other crypto currency

there used to be laws against just using high levels of encryption, they'll bring all that back also
Export Administration Act (EAA) and the Arms Export Control Act (AECA) will be sending us letters to cease and desist, just like they did to the 3D printable gun guys, defcad.org/liberator
 

[EndTheFed321]

Indeed we are DOOMED!!

[mgio]

It is very bad for bitcoin.

It shows that the US government is cracking down on anonymous virtual currencies that can be used for money laundering.

It is harder for them to shut down bitcoin but not impossible.

Let's say they shut down all the exchanges that exchanged dollars for bitcoin? Or at least froze the accounts of them. What do you think would happen to bitcoins price? And then it's utility?

It would be a big step back for bitcoin, and I fear that it is coming. soon.

[jdbtracker]

it's good news,

We are in the clear, they are regulating us for security, They caught and arrested the guy that made LR.
They have not done the same thing to the guys running MtGox... That is my assesment.
They want compliance, besides they can't stop bitcoin, one person with a copy of the BlockChain can rebuild the whole thing again, the laws are territorial so if it is blacked out in one place it can only be done in one sector of a global community.

A previous poster had some really good ideas on how to spread into the space that LR was inhabiting quickly. providing produce, shipping centers, etc.

Paypal does not cater to 60 countries!? Bonus! Bitcoin can go there.

But it is going to be bad news for us for a little while, most people will just say, hah! Bitcoins next, not realizing how resilient the system is, you'd have to knock out the power grid to take it down.
  We are unfortunately limited, we can only propagate our knowledge to people who bring up the argument about LR and only to our close circle, limited for large sectors of society.

To spread we have to find a sector of society to work on that current businesses that accept Bitcoin can help.. I don't think offering them food with foodler or electronics from the Bitcoin store are useful, we need manufacturers on board, shipping services, farmers, something and only the people with a lot of Bitcoins can help with that... or if the community began funding startups to begin constructing these alternate businesses then we can accelerate this.

WE need to bypass the gatekeepers to our success.

[matt4054]

There is still a looooong way to go, but +1 to above post

[mgio]

It's bad. Bitcoin needs to go mainstream to really be successful. Cracking down on virtual currencies does not help them go mainstream.

The dwolla, okpay, liberty reserve news in the past couple weeks is more than a coincidence. It is a sign the US govt is attacking bitcoin anyway it can.

[bit777]

I believe someone needs to build a decentralized exchange for bitcoins before it is too late, as if DOJ shuts down MT. Gox this will be the end of current btc price and almost end of btc. There is no other reliable way to exchange your coins for cash in large amounts.

[escrow.ms]

It is very bad for bitcoin.

It shows that the US government is cracking down on anonymous virtual currencies that can be used for money laundering.

It is harder for them to shut down bitcoin but not impossible.

Let's say they shut down all the exchanges that exchanged dollars for bitcoin? Or at least froze the accounts of them. What do you think would happen to bitcoins price? And then it's utility?

It would be a big step back for bitcoin, and I fear that it is coming. soon.

+1

Well everyone knows bitcoin is getting used on deepweb for illegal things and if one day US govt decide to block bitcoin from america, they can do it easily. Although they won't be able to STOP bitcoin but they can bring bitcoin prices on it's knees anytime.

[superduh]

the articles floating around mainstream sites paint LR as an evil money laundering operation. though i've never used LR or any egold like services it's pretty harsh statements.

[TheKoziTwo]

the articles floating around mainstream sites paint LR as an evil money laundering operation. though i've never used LR or any egold like services it's pretty harsh statements.

Yes, it's completely and utter bullshit. Liberty Reserve was great, just like e-gold. Just not so great for the fascists who run the US government.

[EndTheFed321]

Yes, and when Bitcoin miners and users are targeted we will all be in for a world of heart 

[drrussellshane]

Yes, and when Bitcoin miners and users are targeted we will all be in for a world of heart 

heart or hurt?

lol

[Rampion]

the articles floating around mainstream sites paint LR as an evil money laundering operation. though i've never used LR or any egold like services it's pretty harsh statements.

Yes, it's completely and utter bullshit. Liberty Reserve was great, just like e-gold. Just not so great for the fascists who run the US government.

Exactly. And the very same arguments will be made against BTC *if* the US Government is so stupid to try to ban it.

Wake up call for the naive in here: Bitcoin is a game changer. Powerful people prefer to play their own rigged game, so they are figuring out what to do with BTC. The answer is not easy at all, and this is why Bitcoin is the work of a genius.

If they just ban it, it will get stronger. Keep them coming. We are waiting.

[threeip]

(Reuters) - U.S. prosecutors have indicted the operators of digital currency exchange Liberty Reserve, accusing the Costa Rica-based company of helping criminals around the world launder more than $6 billion in illicit funds linked to everything from child pornography to software for hacking into banks.

and virtually all of its business was related to suspected criminal activity.

...including bitcoin transactions?

[cdog]

Its bad news short term, as people will be scared off e-currencies and many bitcoiners lost a lot of LR$. So the economy shrank.

Long term, its good as people will eventually be forced to flock to a decentralized currency - Bitcoin - which is immune to these problems.

[gog1]

bitcoin itself is decentralized.  but how does one come up with a decentralize exchange?

[escrow.ms]

bitcoin itself is decentralized.  but how does one come up with a decentralize exchange?

Don't know, someone still have to make a website for it and it can get seized.

Biggest example: Exchangezone
It used to work as escrow service and p2p exchange and it also got closed along with LR

[jdbtracker]

If a p2p exchange was necessary we already have the technology for a distributed website on the Darknet.

For getting Cash into the ecosystem it would be useful to have a three way transaction.
two transactions with the two cash for BTC parties acting as the escrows and a third that temporarily holds the BTC and is released when the original parties allow it...

A Needs BTC contacts B to find someone with BTC locally, C has it. C makes a transaction to B, with A as escrow, B sends a transaction to A, with C as escrow. A won't get C's BTC without authorizing the transaction to  B, and B won't release the BTC unless C gets their cash and authorizes the last transaction.

The website problem is the problem, how do you get these three parties to meet each other? The Dark Web, Each person would setup a Darkweb website using I2P, locally advertise it with the correct tags(BTC for sale or stuff categorized) and a website that is publicly available to everyone(you download it, it's actually local) aggregates dynamically all the items on sale on the darkweb that are advertised.

everyone would have the same encrypted address for the exchange website(the site belongs to everyone), but the content would be dynamically advertised to this website, to be removed at your discretion

It would act like a big categorized forum with lists of websites with similar content.

[escrow.ms]

Yes, and when Bitcoin miners and users are targeted we will all be in for a world of heart 

heart or hurt?

lol

heat XD

[JoelKatz]

The gov't trying to shut down the bitcoin exchanges could turn out to be a game of whack-a-mole. They shut down MtGox, BTC-E becomes the new "80%" exchange, and so on. Plus BTC-E is located in Russia, a non-NATO member.

I'm not sure Bitcoin could survive this for two reasons. First, it would force people to leave fiat in an exchange for as little time as possible. This would mean people forced to exchange quickly rather than when it makes the most sense. This will force people to take currency exchange costs they could otherwise avoid by timing. Second, it would increase the incentives for legitimate businesses to distance themselves from Bitcoin. If nothing else, they'd have a hard time figuring out where to exchange them this month.

But I don't think that's going to happen. I think exchanges will comply with the regulations. I doubt LR or BTC-E have any particular interest in financing terrorism or helping to launder drug money. (Or, if they do, they can be replaced by similar businesses that don't.) They just need to figure out reasonable ways to comply.

[QuestionAuthority]

The gov't trying to shut down the bitcoin exchanges could turn out to be a game of whack-a-mole. They shut down MtGox, BTC-E becomes the new "80%" exchange, and so on. Plus BTC-E is located in Russia, a non-NATO member.

I'm not sure Bitcoin could survive this for two reasons. First, it would force people to leave fiat in an exchange for as little time as possible. This would mean people forced to exchange quickly rather than when it makes the most sense. This will force people to take currency exchange costs they could otherwise avoid by timing. Second, it would increase the incentives for legitimate businesses to distance themselves from Bitcoin. If nothing else, they'd have a hard time figuring out where to exchange them this month.

But I don't think that's going to happen. I think exchanges will comply with the regulations. I doubt LR or BTC-E have any particular interest in financing terrorism or helping to launder drug money. (Or, if they do, they can be replaced by similar businesses that don't.) They just need to figure out reasonable ways to comply.

I agree that a LR-type attack on a big bitcoin exchange is unlikely to happen any time soon, because it would be perceived by many as a quasi-recognition of BTC as a real currency and possibly lead to more people taking it seriously. It seems like for now they're just ignoring bitcoin (publicly) and hoping it fades away on its own....

....while slowly attacking every means of converting it to fiat.

[idev]

Full press conference: http://www.bloomberg.com/video/liberty-reserve-laundered-6-billion-bharara-says-h7kwG_fSQIe~21Dsq~yVmQ.html

[TheKoziTwo]

http://www.bloomberg.com/video/liberty-reserve-indicted-money-laundering-scheme-EFsBgharTIuNSeZea8rISw.html

A few excerpts include:
- largest money laundering case in US history
- laundering ring
- black market bank
- financial hub for cyber crime
- bank of choice for the criminal underworld
- operated to attract criminals
- credit card fraud, identity theft, investment fraud, computer hacking, child pornography, and even narcotic trafficing
- wild west of internet activity
- complete anonymity
- there have to be rules!

Yupp.  

[TippingPoint]

They hate anonymity.

Nice news babe though.

[Ichthyo]

bitcoin itself is decentralized.  but how does one come up with a decentralize exchange?

see the recent developments regarding Open Transactions.

Not there yet, but promising.

[kodo]

Very good news indeed

[SGExodus]

I don't think it is good news for the community.

If Global Illicit Financial Team can shutdown Liberty Reserve, they can do likewise for mtgox, bitstamp and btc-e.

When that happened, lots of fiat money and bitcoins will be frozen (or permanently lost form the network), leading to high losses for everyone.

While the bitcoin in your wallet may theoretically rise in value, you will have no way to liquidate them easily.  All transactions will go back to OTC style.  Escrow for OTC can be prospected for assisted "money laundering" too.  So we may have to fall back to Face to Face transaction each time.

[kodo]

Every online money business that goes out of business is good for Bitcoin.

[Carlton Banks]

MtGox could be closed tomorrow.

This is clearly not the case, because by that rationale, it would have already happened. Mt. Gox can still operate it's Japanese bank accounts denominated in all currencies, even if the Feds pull their accounts based in US jurisdiction. National sovereignty is the barrier to a Gox takedown, and I don't think the Japanese are playing nice with the US regulators right now. Long may it continue!

[NewLiberty]

Yeah, hard fork is a solution and bitcoin would survive, but a lot of honest ASIC operators would lose a lot of investment. It'd be an ugly blow to the ecosystem. We need orders of magnitude more hashing power on the network as soon as possible.

Bring in the army of GPU miners using them for games.

Seriously though, marketing mining to the gamers is a great way to distribute infrastructure.  Then they get paid when they aren't gaming and get more social life, and can afford to go on better dates.   See, the marketing does itself!

[crazy_rabbit]

I don't think it is good news for the community.

If Global Illicit Financial Team can shutdown Liberty Reserve, they can do likewise for mtgox, bitstamp and btc-e.

Not really. Bitstamp seems to be legitimate and legal. MtGox has done it's best to be legal minus this stupid issue about not telling the bank what they were doing in good faith. Major fuck up there.
Liberty reserve was obviously criminals. Everyone knows that.
BTC-e I think is real grey area. They aren't clear if they are legal are not. If they aren't then yes, eventually the government will get them. If they are legal, then they are fine.

Remember the government just wants you to pay taxes and follow regulation. If you do this, you'll be fine.

[NewLiberty]

Every online money business that goes out of business is good for Bitcoin.

I disagree, competition is not such a bad thing.  It sharpens the mind.
But if they were doing foul things with foul people, (alleged but yet to be proven) then putting them in the penalty box for a few rounds is just fine with me.
Anyone who gives "Liberty" a bad name can have a spanking.

[escrow.ms]

Not really. Bitstamp seems to be legitimate and legal. MtGox has done it's best to be legal minus this stupid issue about not telling the bank what they were doing in good faith. Major fuck up there.
Liberty reserve was obviously criminals. Everyone knows that.
BTC-e I think is real grey area. They aren't clear if they are legal are not. If they aren't then yes, eventually the government will get them. If they are legal, then they are fine.

Remember the government just wants you to pay taxes and follow regulation. If you do this, you'll be fine.

If US govt wants US citizens to pay taxes and follow regulations, then why they seized other country based digital currency and their bank accounts in several countries. Not only fucking  USA citizens were using Libertyreserve but still they seized it.

Fuck US LAW.

They said it's getting used in criminals activites,drugs,childporn, bitcoin is getting used too.
They said LR used to allow peoples do money transfer with high anonymity,Bitcoin is doing same.

[Rampion]

Not really. Bitstamp seems to be legitimate and legal. MtGox has done it's best to be legal minus this stupid issue about not telling the bank what they were doing in good faith. Major fuck up there.
Liberty reserve was obviously criminals. Everyone knows that.
BTC-e I think is real grey area. They aren't clear if they are legal are not. If they aren't then yes, eventually the government will get them. If they are legal, then they are fine.

Remember the government just wants you to pay taxes and follow regulation. If you do this, you'll be fine.

If US govt wants US citizens to pay taxes and follow regulations, then why they seized other country based digital currency and their bank accounts in several countries. Not only fucking  USA citizens were using Libertyreserve but still they seized it.

Fuck US LAW.

They said it's getting used in criminals activites,drugs,childporn, bitcoin is getting used too.
They said LR used to allow peoples do money transfer with high anonymity,Bitcoin is doing same.

Don't be foolish. Liberty Reserve was a centralized service that didn't do shit to comply with regulation. You could register your account with a fake name and move hundreds of thousands of $.

To the contrary, Bitcoin is a decentralized currency, and the biggest services that deal with Bitcoin do care to comply with regulation.

I don't know if you ever applied for "verified" of "trusted" status on Gox, but they check thoroughly your documents. They reject applications for silly mispellings on the utility bill. If you are willing to move more than play money and get "trusted" status you do not only need to send notarized documents, but you need an international Apostille... That's some crazy shit, in the sense that they really try hard to comply with AML regulation (even if they are amateurish, as the failed FinCEN register demonstrates).

There's no similarity whatsoever between LR and BTC.

[escrow.ms]

Don't be foolish. Liberty Reserve was a centralized service that didn't do shit to comply with regulation. You could register your account with a fake name and move hundreds of thousands of $.

Yes i know it was a centralized service that's why US govt seized them easily and and comply US regulations why?  Just Because US peoples were using it?

US govt have already banned LR in USA last year and do you even knew how it used to work?  They didn't had deposit/withdraw option. So You can't just register account and move your money in it, You have to buy LR from some exchanger to get LR funds and almost all of them used to require identity proof from peoples.

To the contrary, Bitcoin is a decentralized currency, and the biggest services that deal with Bitcoin do care to comply with regulation.

It's not just about paying tax,
When they seized LR, they said, they closed it because Hackers/criminals were using it for drugs,childporn,trafficking,money laundering. Same thing is happening with bitcoin, the only difference with bitcoin is it's decentralized but only currency, exchangers,other  trading companies are still centralized.

[QuantPlus]

MtGox could be closed tomorrow.

This is clearly not the case, because by that rationale, it would have already happened. Mt. Gox can still operate it's Japanese bank accounts denominated in all currencies...

No, shutting down unregulated gambling sites and exchanges is LOW PRIORITY.

The US takes it's sweet time...
Bureaucrats usually spend 2-3 years building a case...
Identifying principals involved and observing an operation...
Then, "suddenly", the site goes down in 5 minutes.

That's what happened with Full Tilt Poker... 5-10 times bigger than MtGox.

The principals are then charged with crimes carrying huge jail sentences...
Linked to drugs, terrorism, porn, etc...
The principals are invariably extradited or have to go on the run...
Then the whole thing is negotiated with $1000/hour lawyers...
But the business disappears overnight.

Rinse and repeat.

One has to be in complete denial...
To think MtGox or Bitstamp is different from LR or FTP.


 

[kerogre256]

MtGox could be closed tomorrow.

This is clearly not the case, because by that rationale, it would have already happened. Mt. Gox can still operate it's Japanese bank accounts denominated in all currencies...

No, shutting down unregulated gambling sites and exchanges is LOW PRIORITY.

The US takes it's sweet time...
Bureaucrats usually spend 2-3 years building a case...
Identifying principals involved and observing an operation...
Then, "suddenly", the site goes down in 5 minutes.

That's what happened with Full Tilt Poker... 5-10 times bigger than MtGox.

The principals are then charged with crimes carrying huge jail sentences...
Linked to drugs, terrorism, porn, etc...
The principals are invariably extradited or have to go on the run...
Then the whole thing is negotiated with $1000/hour lawyers...
But the business disappears overnight.

Rinse and repeat.

One has to be in complete denial...
To think MtGox or Bitstamp is different from LR or FTP.


 

If they give bitcoin 2-3 years it will be too late for them and MtGox, Bitstamp will be irreverent in 2-3 years time.

[TheKoziTwo]

MtGox could be closed tomorrow.

This is clearly not the case, because by that rationale, it would have already happened. Mt. Gox can still operate it's Japanese bank accounts denominated in all currencies...

No, shutting down unregulated gambling sites and exchanges is LOW PRIORITY.

The US takes it's sweet time...
Bureaucrats usually spend 2-3 years building a case...
Identifying principals involved and observing an operation...
Then, "suddenly", the site goes down in 5 minutes.

That's what happened with Full Tilt Poker... 5-10 times bigger than MtGox.

The principals are then charged with crimes carrying huge jail sentences...
Linked to drugs, terrorism, porn, etc...
The principals are invariably extradited or have to go on the run...
Then the whole thing is negotiated with $1000/hour lawyers...
But the business disappears overnight.

Rinse and repeat.

One has to be in complete denial...
To think MtGox or Bitstamp is different from LR or FTP.

+1

Was gonna reply, but you just said it all.

[Carlton Banks]

No, shutting down unregulated gambling sites and exchanges is LOW PRIORITY.

The US takes it's sweet time...
Bureaucrats usually spend 2-3 years building a case...
Identifying principals involved and observing an operation...
Then, "suddenly", the site goes down in 5 minutes.

That's what happened with Full Tilt Poker... 5-10 times bigger than MtGox.

The principals are then charged with crimes carrying huge jail sentences...
Linked to drugs, terrorism, porn, etc...
The principals are invariably extradited or have to go on the run...
Then the whole thing is negotiated with $1000/hour lawyers...
But the business disappears overnight.

Rinse and repeat.

One has to be in complete denial...
To think MtGox or Bitstamp is different from LR or FTP.


 

Wrong.

Mt Gox operates from Japan (this is not a US state, in case you were still unsure)

This means the Japanese authorities would have to cooperate with the US extradition orders and subpoenas etc. That won't happen. Costa Rica and Spain will give up the Liberty Reserve people. Japan won't be giving up Mt. Gox, or at a least not without an inordinate amount of backdoors arm-twisting. And when you look at both the political and the public sentiment towards the US in Japan lately, you'll realise that's also pretty unlikely.

[TheKoziTwo]

No, shutting down unregulated gambling sites and exchanges is LOW PRIORITY.

The US takes it's sweet time...
Bureaucrats usually spend 2-3 years building a case...
Identifying principals involved and observing an operation...
Then, "suddenly", the site goes down in 5 minutes.

That's what happened with Full Tilt Poker... 5-10 times bigger than MtGox.

The principals are then charged with crimes carrying huge jail sentences...
Linked to drugs, terrorism, porn, etc...
The principals are invariably extradited or have to go on the run...
Then the whole thing is negotiated with $1000/hour lawyers...
But the business disappears overnight.

Rinse and repeat.

One has to be in complete denial...
To think MtGox or Bitstamp is different from LR or FTP.


 

Wrong.

Mt Gox operates from Japan (this is not a US state, in case you were still unsure)

This means the Japanese authorities would have to cooperate with the US extradition orders and subpoenas etc. That won't happen. Costa Rica and Spain will give up the Liberty Reserve people. Japan won't be giving up Mt. Gox, or at a least not without an inordinate amount of backdoors arm-twisting. And when you look at both the political and the public sentiment towards the US in Japan lately, you'll realise that's also pretty unlikely.

Even if not extradited (look at kim dotcoms case), they can still ruin the business.

[Rampion]

No, shutting down unregulated gambling sites and exchanges is LOW PRIORITY.

The US takes it's sweet time...
Bureaucrats usually spend 2-3 years building a case...
Identifying principals involved and observing an operation...
Then, "suddenly", the site goes down in 5 minutes.

That's what happened with Full Tilt Poker... 5-10 times bigger than MtGox.

The principals are then charged with crimes carrying huge jail sentences...
Linked to drugs, terrorism, porn, etc...
The principals are invariably extradited or have to go on the run...
Then the whole thing is negotiated with $1000/hour lawyers...
But the business disappears overnight.

Rinse and repeat.

One has to be in complete denial...
To think MtGox or Bitstamp is different from LR or FTP.


 

Wrong.

Mt Gox operates from Japan (this is not a US state, in case you were still unsure)

This means the Japanese authorities would have to cooperate with the US extradition orders and subpoenas etc. That won't happen. Costa Rica and Spain will give up the Liberty Reserve people. Japan won't be giving up Mt. Gox, or at a least not without an inordinate amount of backdoors arm-twisting. And when you look at both the political and the public sentiment towards the US in Japan lately, you'll realise that's also pretty unlikely.

What are you talking about? Japan is a proxy of the US. They will do whatever the US says.

If you were speaking of Russia... OK, maybe. China... Yeah, US would have a hard time. Iran? OK, in that case you would be definitely right. But come on, Japan? They will do EVERYTHING that daddy US tells them, as they have done since WWII.

[hayek]

Ya but it's a bad sign overall IMO...

First they came for the communists,
and I didn't speak out because I wasn't a communist.

Then they came for the socialists,
and I didn't speak out because I wasn't a socialist.

Then they came for the trade unionists,
and I didn't speak out because I wasn't a trade unionist.

Then they came for the Jews,
and I didn't speak out because I wasn't a Jew.

Then they came for the Catholics,
and I didn't speak out because I wasn't a Catholic.

Then they came for me,
and there was no one left to speak for me.

I can speak for myself

[escrow.ms]

Wrong.

Mt Gox operates from Japan (this is not a US state, in case you were still unsure)

This means the Japanese authorities would have to cooperate with the US extradition orders and subpoenas etc. That won't happen. Costa Rica and Spain will give up the Liberty Reserve people. Japan won't be giving up Mt. Gox, or at a least not without an inordinate amount of backdoors arm-twisting. And when you look at both the political and the public sentiment towards the US in Japan lately, you'll realise that's also pretty unlikely.

http://en.wikipedia.org/wiki/List_of_United_States_extradition_treaties

[Rampion]

Wrong.

Mt Gox operates from Japan (this is not a US state, in case you were still unsure)

This means the Japanese authorities would have to cooperate with the US extradition orders and subpoenas etc. That won't happen. Costa Rica and Spain will give up the Liberty Reserve people. Japan won't be giving up Mt. Gox, or at a least not without an inordinate amount of backdoors arm-twisting. And when you look at both the political and the public sentiment towards the US in Japan lately, you'll realise that's also pretty unlikely.

True but then MTGox have to refuse US customers.

It's simple. Pay them tax (US Govt) or don't do business in/with america/american citizens.

Guys, what are you talking about? Seriously? Didn't you know that Japan's defence is completely dependent on the US? Didn't you know that Japan is just a proxy of the US, just like most of European countries (including Scandinavia, but they seem to forget it sometimes)?

Please check the extradition treaty 31 UST 892, Treaty Doc. 108-12. Signed in the 70's and just reviewed and extended less than 10 years ago.

How can you say that "Japan won't be giving up Mt. Gox"? On what do you base your absurd claim? Name only one case in which Japan refused to extradite a "criminal" on USA's request. ONLY ONE.

Jeeeez, guys, I don't know in what world are you living in.

[villex]

I have $500 in Forex all exchanged from BTC to LR and now all is the account without a way to withdraw. damn gringos.

[escrow.ms]

http://www.forbes.com/sites/petercohan/2013/05/29/after-liberty-reserve-shut-down-is-bitcoin-next

[Rampion]

http://www.forbes.com/sites/petercohan/2013/05/29/after-liberty-reserve-shut-down-is-bitcoin-next

The title is obvious sensationalist FUD, but if you read the article you will see how anybody with half a brain understands that you simply do not "shut down" Bitcoin.

And, quoting literally:

Perhaps a law could be passed that would make it illegal to conduct anonymous transactions using virtual currency. Of course, by that logic, it would be illegal to buy gasoline by handing the attendant four $20 bills.

[visionary]

i think it's good news for bitcoin

[kodo]

Hopefuly Okpay and NEtteller will follow.

[Carlton Banks]

Wrong.

Mt Gox operates from Japan (this is not a US state, in case you were still unsure)

This means the Japanese authorities would have to cooperate with the US extradition orders and subpoenas etc. That won't happen. Costa Rica and Spain will give up the Liberty Reserve people. Japan won't be giving up Mt. Gox, or at a least not without an inordinate amount of backdoors arm-twisting. And when you look at both the political and the public sentiment towards the US in Japan lately, you'll realise that's also pretty unlikely.

For those that can't read, attempt the bolded text. You need to know what the argument is before you try to refute it.   

[countryfree]

The hope is that if the US has killed the whole LR system instead of looking for the bad guys who were using it, with bitcoin, there would be no other choice but to go for the individuals who use it for illegal purposes. The FBI and the CIA have assuredly what it takes to follow what's happening to the bitcoins sent to the silk road.

But I'm worried because many LR users were outside the US. How come the US can freeze their accounts?

[escrow.ms]

How come the US can freeze their accounts?

This is the main question.
They have seized whole Libertyreserve (More than 1 million customers worldwide, 45 Banks accounts and other properties,servers in different countries including switzerland,Costa Rica, Netherlands, Spain, Morocco, Sweden,Cyprus, Australia, China, Norway, Latvia, Luxembourg,United Kingdom, Russia, Canada) just because they failed to stop their peoples ( 200,000 US customers, according to them) from using it.

[MysteryMiner]

This is exactly like e-gold in back in early days. But this time I lost nothing except few empty accounts, being poor have few advantages.

Good news are that Bitcoin cannot be easily shut down. Probably MtGox will be goatsed in any moment but the tactics used to destroy Bitcoin will be messing up development and usability of original Bitcoin client. Probably fist step was manipulating devs into replacing original interface with Qt.

[Rampion]

How come the US can freeze their accounts?

This is the main question.
They have seized whole Libertyreserve (More than 1 million customers worldwide, 45 Banks accounts and other properties,servers in different countries including switzerland,Costa Rica, Netherlands, Spain, Morocco, Sweden,Cyprus, Australia, China, Norway, Latvia, Luxembourg,United Kingdom, Russia, Canada) just because they failed to stop their peoples ( 200,000 US customers, according to them) from using it.

Having money on third party services that not even attempt to comply with AML regulation is very probably a bad idea.

That's why significant money went to Gox, because at least they look like they try

[escrow.ms]

Having money on third party services that not even attempt to comply with AML regulation is very probably a bad idea.

That's why significant money went to Gox, because at least they look like they try

They had a AML policy page and i am saying again they were not doing dealing with customers directly. They had no deposit/withdraw option. People used to buy/Sell currency from  legit currency exchangers like wm-center.com/ecardone.com or from other LR users.

It was like a escrow site, Where you buy money from a legit exchanger and fill your LR account with those money and you will be able to send it to other users. Same as bitcoin.

The only difference is LR was a centralized currency.

[Its About Sharing]

Wrong.

Mt Gox operates from Japan (this is not a US state, in case you were still unsure)

This means the Japanese authorities would have to cooperate with the US extradition orders and subpoenas etc. That won't happen. Costa Rica and Spain will give up the Liberty Reserve people. Japan won't be giving up Mt. Gox, or at a least not without an inordinate amount of backdoors arm-twisting. And when you look at both the political and the public sentiment towards the US in Japan lately, you'll realise that's also pretty unlikely.

For those that can't read, attempt the bolded text. You need to know what the argument is before you try to refute it.   

What is interesting when one considers Japan, it has essentially been a US colony since WWII. They are now practicing Quantitative Easing at the behest of the US Federal Reserve. So, I do wonder how much they can be influenced by the US. One would think a lot. But, BTC being anti-fragile (see my sig), just makes us stronger...

[drrussellshane]

How to stop the use of digital currencies in drug trafficking? de-criminalize drugs.

Yeah, but that is not too likely to happen right now, as various intelligence agencies the world over like to use drug-dealing to pad their black budgets.

[CasinoBit]

Ah, the Land of the Free

After all, only criminal terrorists want to bank anonymously.

The charges against Liberty Reserve are vicious, to say the least. The Financial Crimes Enforcement Network claims that the service “is not designed for legitimate use,” and that it is “designed to facilitate money laundering and illicit finance.”

[TippingPoint]

What is interesting when one considers Japan, it has essentially been a US colony since WWII. They are now practicing Quantitative Easing at the behest of the US Federal Reserve. So, I do wonder how much they can be influenced by the US. One would think a lot. But, BTC being anti-fragile (see my sig), just makes us stronger...

I think so too.  Mt. Gox could be Gaijin to them.  China casts a very large shadow.  If the U.S. asked Japan to squeeze Mt. Gox, I don't think there would be a great deal of negotiating.

[escrow.ms]

Ah, the Land of the Free

After all, only criminal terrorists want to bank anonymously.

The charges against Liberty Reserve are vicious, to say the least. The Financial Crimes Enforcement Network claims that the service “is not designed for legitimate use,” and that it is “designed to facilitate money laundering and illicit finance.”

Currently they are just claming not proving.

[Its About Sharing]

Ah, the Land of the Free

After all, only criminal terrorists want to bank anonymously.

The charges against Liberty Reserve are vicious, to say the least. The Financial Crimes Enforcement Network claims that the service “is not designed for legitimate use,” and that it is “designed to facilitate money laundering and illicit finance.”

Currently they are just claming not proving.

Yes as is typical. I'm sure the news stories will come out that proves their point. Something like "I did apply to use LR but due to having no criminal record I was refused." 
Fun to watch criminals act legit (since the inception of governments). And it is even more fun to see them being squeezed lately.

Enjoy the fireworks once they start and enjoy a much better world, but it will take some time.

[escrow.ms]

Yes as is typical. I'm sure the news stories will come out that proves their point. Something like "I did apply to use LR but due to having no criminal record I was refused."  
Fun to watch criminals act legit (since the inception of governments). And it is even more fun to see them being squeezed lately.

Enjoy the fireworks once they start and enjoy a much better world, but it will take some time.

Much better world?

Well ask from legit peoples like me who lost their money for nothing.
It might be funny for you but for us and others who lost their money it's not.

I am not american and at the end i just want to say.

Fuck you american govt. Stop forcing your fucking dumb rules on us.

[Its About Sharing]

Yes as is typical. I'm sure the news stories will come out that proves their point. Something like "I did apply to use LR but due to having no criminal record I was refused."  
Fun to watch criminals act legit (since the inception of governments). And it is even more fun to see them being squeezed lately.

Enjoy the fireworks once they start and enjoy a much better world, but it will take some time.

Much better world?

Well ask from legit peoples like me who lost their money for nothing.
It might be funny for you but for us and others who lost their money it's not.

I am not american and at the end i just want to say.

Fuck you american govt. Stop forcing your fucking dumb rules on us.

Funny for me? What on earth are you talking about?

Read my post a bit closer...

[high110]

I wonder if I should move my BTCs to a private wallet.

[Rampion]

I wonder if I should move my BTCs to a private wallet.

Well, that's always safer.

Anyhow, listen carefully to what the sheriffs say about BTC (minute 28:00). Basically, that they are not AGAINST them, that they are FOR innovation including virtual currencies, as long as the exchanges comply with FinCEN regulation:

http://www.davidnews.com/2013/05/liberty-reserve-laundered-6-billion.html

NO FEAR

[CasinoBit]

Yes as is typical. I'm sure the news stories will come out that proves their point. Something like "I did apply to use LR but due to having no criminal record I was refused."  
Fun to watch criminals act legit (since the inception of governments). And it is even more fun to see them being squeezed lately.

Enjoy the fireworks once they start and enjoy a much better world, but it will take some time.

Much better world?

Well ask from legit peoples like me who lost their money for nothing.
It might be funny for you but for us and others who lost their money it's not.

I am not american and at the end i just want to say.

Fuck you american govt. Stop forcing your fucking dumb rules on us.

It think he meant criminals as in governments, being squeezed.