Liberty Reserve shutdown is a boost for Bitcoin?

[b!z]

Bitcoin price is not fixed unlike LR, so most likely boost for webmoney, yandex money and so on

The only man in this thread with the correct answer goes ignored...

I doubt anyone ignored alex_fun for this.

But 6 Billion is serious money, compared to the size of the Bitcoin economy, anyway. Some criminals who's funds have been taken by the feds might wonder if another centralized service that can be taken out the same way is such a good solution. If only 10% of that money went to Bitcoin, we should see a serious boost. But we don't. In fact we don't see evidence that any money at all is flowing into Bitcoin atm.

And why should we? Moving money around with LR, Webmoney, WU or Bitcoin is not helping making it appear legitimate, just as carrying a bag of banknotes from one country to another is not helping a criminal in the least. To launder money, you need to have legitimate business and you add to the revenue they actually have.

I think LR's turnover of illegitimate money was orders of magnitude smaller than the official numbers. Govt had other reasons for taking them down and they simply lie to us.

This should give you a better opinion of what cybercriminals think about LR. http://krebsonsecurity.com/2013/05/underweb-payments-post-liberty-reserve/

I suggest you read the article you link to yourself. The poll at the bottom says 13.83% think Bitcoin works best for them. If that translates into 13.83% of the 6 Billion of alleged criminal volume (around 1 Billion / year), that means we should see an additional $300K volume per day. Which would be perfectly visible. Apparently it doesn't translate. Which means that 6 Billion is grossly overexaggerated.

Other than that, I have my issues with the article and the apparent lack of knowledge of the author. Saying that LR was "insanely redundant and secure" as opposed to Bitcoin is not very accurate, as you undoubtedly will agree.

The author does know what he is talking about when it comes to cybercrime, even if he does get a few facts wrong. The majority of cybercriminals do not want to use Bitcoin because of volatility reasons. Feel free to try to prove me wrong.

[BitcoinAshley]

The author does know what he is talking about when it comes to cybercrime, even if he does get a few facts wrong. The majority of cybercriminals do not want to use Bitcoin because of volatility reasons. Feel free to try to prove me wrong.

Sooner or later they will be forced to realize that they have only three choices:

1) Use a centralized payment system and get shut down
2) Completely stop their operations and don't send payment to anybody
3) Use bitcoin and live with the volatility. Obviously the most profitable option. 

Sure, another option is to start a legitimate business and launder that way, but many criminals either don't have the resources or that is practically impossible due to their particular business. In fact,  laundering money using a cryptocurrency is probably less risky than laundering money using a "front business."

[anu]

The author does know what he is talking about when it comes to cybercrime, even if he does get a few facts wrong. The majority of cybercriminals do not want to use Bitcoin because of volatility reasons. Feel free to try to prove me wrong.

13.83% is plenty to support my point, which is that the 6 Billion is grossly overexaggerated. There is no need for 51%.  I think at lower than 3% the impact on the market would be too small. Thanks for the source, BTW.

What I am wondering is, how did the feds come by their numbers? Blunt lie? Or does money laundering require multiple transactions and they simply summed it up? Or....?

[hashman]

What I am wondering is, how did the feds come by their numbers? Blunt lie? Or does money laundering require multiple transactions and they simply summed it up? Or....?

More important than the loss of the money by users of LR is the demonstration of power by the empire state court.  A few folks proved they can take money from any bank accounts around the world (20 accounts in Cyprus, 10 in costa rica, accounts in China, Hong Kong, Latvia, Russia) based solely on unproven accusations.  They showed they can take domains based solely on accusations.  They showed they can shut down amazon web services based on accusations they make.  That is big news I think and will affect the market. 

Speaking of accusations, does anybody understand why "money laundering" is claimed?  I was under the impression that laundering had the implication of cleaning.  This means showing a clean exit for money, for example as restaurant earnings (though not many people went to that mafia restaurant), construction company earnings (hey wait what did they build), etc. etc.  Why do these warrants bother claiming that LR was a "launderer" of money when in no case do they ever provide clean taxable income for anyone? 

[MAbtc]

Why do these warrants bother claiming that LR was a "launderer" of money when in no case do they ever provide clean taxable income for anyone? 

Laundering, IMO, is based on concealment. It's about whether or not you conceal the source of (ill-gotten) money.

So, for instance, if you were able to move funds from hacked bank accounts to anonymous re-loadable credit cards, without the ill-gotten money being tied to you, that would be laundering. That is exactly the type of service that LR was able to provide. It's simply mixing, and it is definitely laundering.

[becoin]

Laundering, IMO, is based on concealment. It's about whether or not you conceal the source of (ill-gotten) money.

No. Laundering is every financial transaction if Big Brother has no information about how much money, from whom, and for what are transferred. If they don't know EVERYTHING about your money then you're dubbed money launderer.

It's simply mixing, and it is definitely laundering.

Well, cash is mixed in every cash register in every shop. Does it mean that every cash register in every shop is a money laundering machine? Fungibility is one of the key functions of real money. If you can't mix them then you're not using real money but some substitute.

[MAbtc]

Laundering, IMO, is based on concealment. It's about whether or not you conceal the source of (ill-gotten) money.

No. Laundering is every financial transaction if Big Brother has no information about how much money, from whom, and for what are transferred. If they don't know EVERYTHING about your money then you're dubbed money launderer.

No, that's some tin-foil hat definition.

"Money laundering is the process of concealing illicit sources of money." -Wikipedia
"money laundering (concealing the source of illegally gotten money)" -Princeton WordNet

It's simply mixing, and it is definitely laundering.

Well, cash is mixed in every cash register in every shop. Does it mean that every cash register in every shop is a money laundering machine?

Mixing here is not simply "to combine" as you are using it. It is the act of specifically mixing dirty money with clean money to conceal the original source of the dirty money. See the Bitcoin wiki for "Mixing service." I don't know on what scale this was actually happening with LR -- we are not privy to that information.

Fungibility is one of the key functions of real money. If you can't mix them then you're not using real money but some substitute.

Hacked credit card money, for example, and "real money" are fungible; you simply wouldn't want that trail leading back to you. Is it not simple to see why AML laws would be used to prevent mixing of these types of funds?

[becoin]

"Money laundering is the process of concealing illicit sources of money." -Wikipedia
"money laundering (concealing the source of illegally gotten money)" -Princeton WordNet

So, if I'm concealing the source of legally gotten money everything should be okay?!

[MAbtc]

"Money laundering is the process of concealing illicit sources of money." -Wikipedia
"money laundering (concealing the source of illegally gotten money)" -Princeton WordNet

So, if I'm concealing the source of legally gotten money everything should be okay?!

AML laws get you then, too! 

[becoin]

"Money laundering is the process of concealing illicit sources of money." -Wikipedia
"money laundering (concealing the source of illegally gotten money)" -Princeton WordNet

So, if I'm concealing the source of legally gotten money everything should be okay?!

AML laws get you then, too! 

So, my "tin-foil hat" definition is correct!

[NewLiberty]

"Money laundering is the process of concealing illicit sources of money." -Wikipedia
"money laundering (concealing the source of illegally gotten money)" -Princeton WordNet

So, if I'm concealing the source of legally gotten money everything should be okay?!

Then the presumption is that at least some of it is ill-gotten, and it may be up to the defendant to show otherwise if there is probable cause for indictment and some evidence against them.

[MAbtc]

"Money laundering is the process of concealing illicit sources of money." -Wikipedia
"money laundering (concealing the source of illegally gotten money)" -Princeton WordNet

So, if I'm concealing the source of legally gotten money everything should be okay?!

AML laws get you then, too!  

So, my "tin-foil hat" definition is correct!

No. Violating AML laws doesn't mean that you have laundered money.

[becoin]

Then the presumption is that at least some of it is ill-gotten

No. The presumption always is "not guilty unless your guilt is proven"! Or, are you saying that AML law is an exception to this universal principle in every judicial system? You're guilty by presumption and you have to prove you are not guilty?!

[NewLiberty]

Then the presumption is that at least some of it is ill-gotten

No. The presumption always is "not guilty unless your guilt is proven"! Or, are you saying that AML law is an exception to this universal principle in every judicial system? You're guilty by presumption and you have to prove you are not guilty?!

...if there is probable cause for indictment and some evidence against them.

Please accept my apologies for putting an important part of the sentence near the end where it can be neatly chopped off.
http://en.wikipedia.org/wiki/Probable_cause

[becoin]

Then the presumption is that at least some of it is ill-gotten

No. The presumption always is "not guilty unless your guilt is proven"! Or, are you saying that AML law is an exception to this universal principle in every judicial system? You're guilty by presumption and you have to prove you are not guilty?!

...if there is probable cause for indictment and some evidence against them.

Please accept my apologies for putting an important part of the sentence near the end where it can be neatly chopped off.
http://en.wikipedia.org/wiki/Probable_cause

Probable cause is like probable pregnancy.

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

Is the probable pregnancy a pregnancy or it isn't?

So, please accept my apologies I should have modified the universal principal to suit AML laws. It should read - "not guilty unless you're probably guilty"

[NewLiberty]

Then the presumption is that at least some of it is ill-gotten

No. The presumption always is "not guilty unless your guilt is proven"! Or, are you saying that AML law is an exception to this universal principle in every judicial system? You're guilty by presumption and you have to prove you are not guilty?!

...if there is probable cause for indictment and some evidence against them.

Please accept my apologies for putting an important part of the sentence near the end where it can be neatly chopped off.
http://en.wikipedia.org/wiki/Probable_cause

Probable cause is like probable pregnancy.

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

Is the probable pregnancy a pregnancy or it isn't?

So, please accept my apologies I should have modified the universal principal to suit AML laws. It should read - "not guilty unless you're probably guilty"

Or to put it more accurately, once prosecution shows evidence of all the prongs of the crime, the burden is on the defense to create doubt and one ignores this at their own risk.

Further, when probable cause is established, and the prosecution convinces a judge that the crimes are continuing and the only way to stop them is to hurt innocents, sometimes a judge agrees! 
They think of it as blocking traffic on a block where there is a violent crime occurring.  Lots of folks suffer but they think that maybe they stop something worse from happening and make an injunction judgement on that risk.

I can't say who is right and who is wrong in this LR stuff, but the legal system is working as it was designed.  Disagree with the design if you like, but it is not good to ignore it.

[becoin]

I can't say who is right and who is wrong in this LR stuff, but the legal system is working as it was designed. 

Not at all. You seem to forget the definition of money laundering you pointed out? You don't have any evidence of illegal money because their source is concealed. To have any evidence of money being illegal you have to know the source. Simple as that.

Your arguments are the same the Holy Inquisition used during the dark ages. Inquisition agents selected their targets on "probable cause" based on "some evidence". During the interrogation the "defendant" has to prove he/she is law-abiding citizen and that he/she is not guilty. If the poor victim died during the "indictment process" this was the ultimate proof that they were guilty, because God won't allow innocent people to die.

[MAbtc]

I can't say who is right and who is wrong in this LR stuff, but the legal system is working as it was designed. 

You don't have any evidence of illegal money because their source is concealed. To have any evidence of money being illegal you have to know the source. Simple as that.

I'm not endorsing anyone's arguments, but the fact that sources are concealed (or perhaps more suitably, that attempts were made to conceal the sources) doesn't mean there is no evidence of illegal proceeds. That's a very strange assumption. Criminals fuck up all the time.

[becoin]

I'm not endorsing anyone's arguments, but the fact that sources are concealed (or perhaps more suitably, that attempts were made to conceal the sources) doesn't mean there is no evidence of illegal proceeds.

Well, answer my question then. What evidence would you have of money being illegal if you don't know where they come from?

[MAbtc]

I'm not endorsing anyone's arguments, but the fact that sources are concealed (or perhaps more suitably, that attempts were made to conceal the sources) doesn't mean there is no evidence of illegal proceeds.

Well, answer my question then. What evidence would you have of money being illegal if you don't know where they come from?

You made the same assumption again. How do you know that I don't know? That attempts were made to conceal the sources does not necessarily make it so.