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

[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!