Is BFL using BitPay for money laundering purposes good for advancing Bitcoin?

[Gleb Gamow]

http://www.walletexplorer.com/wallet/0dd32fc1a663150a = http://www.walletexplorer.com/address/1QAHVyRzkmD4j1pU5W89htZ3c6D6E7iWDs





Looks to me like BF Labs Inc. (Butterfly Labs Inc./BFL) has been using BitPay as their own private exchange. Note the 5562.354 BTC that I highlighted. That was supposedly the $1M USD down payment from HashTrade that Josh Zerlan has NEVER called me out on as being a liar about, yet he's also been quick with that lizard tongue of his each time such in his mind was warranted.

BF Labs, Inc. Processes $1 Million Bitcoin Merchant Transaction for Institutional Bitcoin Mining Hardware Purchase

https://bitpay.com/legal

1. The Services

We are a Bitcoin payment processor—we enable you to accept Bitcoins as payment for goods or services, and process Bitcoin payments that you receive from your customers. We are not a Bitcoin exchange, Bitcoin wallet, or a place to purchase Bitcoin. By using the Services, you authorize us to receive, hold and disburse funds on your behalf and to take any and all actions that we think are necessary or desirable to provide the Services and to comply with applicable law.

10.2 Our Right to Close or Suspend Your Account

We may terminate these Terms and close your account, at our discretion, upon notice to you via email or phone communication. We may also suspend your access to the Services if we suspect that you have failed to comply with these Terms, pose an unacceptable fraud risk to us, or if you provide any false, incomplete, inaccurate or misleading information. We will not be liable to you for any losses that you incur in connection with our closure or suspension of your account.

Reads to me like BFL will no longer be using BitPay since I've personally - with no motherfuckin' help from the media - exposed this fraud.

#ASKFTC

[1714666130]

1714666130

[madmadmax]

Whats the fraud again? That they have sold stolen BTC via BitPay?

[Gleb Gamow]

Whats the fraud again? That they have sold stolen BTC via BitPay?

BFL is using BitPay as an exchange to convert their BTC to fiat and deposited into their bank oppose to only using them as a payment service provider of which that is all BitPay is, again, not an exchange.

You can't do! I can't do it! Yet, BFL has converted millions via BitPay. I just found three other BFL BWAs that have used BitPay to convert their BTC to fiat. BFL has been sooooo NAUGHTY!

Where's the fuckin' media on this?

#ASKFTC

[Gleb Gamow]

This should get the media and #ASKFTC attentions: http://www.reddit.com/r/Bitcoin/comments/2kqqyu/is_bfl_using_bitpay_for_money_laundering_purposes/

[MineForeman.com]

How do you link that transfer to BFL?

[Gleb Gamow]

How do you link that transfer to BFL?

BFL used BitPay to liquidate a million dollars worth of BTC stemming from who knows where, also opting to get their buds, HashTrade, into the act by having them claim that said bogus transaction came from them for the purchase of Monarch bitcoin miners, now getting BitPay caught up in their con actions. Two days later, BFL had a million dollars in their bank account, and that's if BFL used their business account to do such, otherwise Sonny Vleisides and Jeff Ownby split the booty, after giving Josh and Nasser their cuts of course.

The above is fact and breaking news, but for the life of me I don't understand why Matthew N. Wright's Bitcoin Magazine doesn't pen an article around it.

#ASKFTC

[Gleb Gamow]

http://www.walletexplorer.com/txid/45d41f9297ebfbb0d840b47698698d0b3499b35ce109e55093477ffd97a49763



More proof that the QAHVyRzkmD4j1pU5W89htZ3c6D6E7iWDs BWA doesn't belong to HashTrade but to BFL, for I can now easily site a myriad, as in dozens, such transactions stemming from said and similar BWAs verified to belong to BFL paying Luke Jr. for various services. In fact, if you note the date of the transaction you'll realize that HashTrade had yet to create a web presence as witnessed here: http://web.archive.org/web/20130401000000*/http://hashtrade.com

#ASKFTC

[Gleb Gamow]

This is weird! According to this transaction, BitPay is using BitStamp to ??: https://blockchain.info/tx/baaa36348f7228ec46570ead17f764af133dd5a7cd07c67dd14e31124017ec2f

http://www.walletexplorer.com/address/1L7T67j4um5BTFpzvyqd3ShqEBDruZnEW4 ---> http://www.walletexplorer.com/address/15QTGigFgnMpqcg5tQwBszQ94me98ZTVkr

[Bicknellski]

IRS has been informed about these transactions? This seems to be worse for Bitpay if they were operating as an exchange without a license to do so. Bitpay seems they were doing  BFL a special service doesn't it? Legally what US laws were broken by Bitpay and BFL?

[Gleb Gamow]

IRS has been informed about these transaction? This seems to be worse for Bitpay if they were operating as an exchange without a license to do so. Bitpay seems they were doing  BFL a special service doesn't it? Legally what US laws were broken by Bitpay and BFL?

Besides money laundering on BFL's part, I haven't a clue, but I don't think it's legal for one entity - BF Labs Inc. - to pretend that another entity - HashTrade - sent the first entity a million dollars for its upcoming line of bitcoin miners, then even go out of its way to declare the following: http://www.prweb.com/releases/2013/10/prweb11283333.htm

This is a major endorsement of Butterfly Labs' technology and ability to deliver, from one of the industry's most significant players."Butterfly's technology is robust and reliable and our relationship is very strong,” said Greg Bachrach, Co-Founder and CEO of HashTrade. “Having worked with their equipment now for some time, we are confident of Butterfly Labs' ability to deliver based on their multi-generational experience designing, producing and delivering high performance mining equipment. Because of this we feel that Butterfly Labs is one of the only institutional hardware vendors uniquely positioned to deliver exactly what they advertise."

I don't know the legalese term for such practice, but I sure the hell know that it's illegal. And so does/will the FTC and whatever other three-letter agency who reads this post/thread.

Many millions were sent to BFL due to that one endorsement (the PR picked up by dozens of other periodicals) by working folks who are now entangled in the FTC lawsuit. Yet, HashTrade, NimbusMining, Netsolus and LiquidBits have yet to file their lawsuits to get their supposedly tens of millions back for non-delivery of Monarchs, but recall that LiquidBits filed as quick as possible to try to get their $6M USD back from HashFast (not HashTrade, to clarify).

#ASKFTC

PS: Now, I ask one more time: Where's the fuckin' media that has reported on much lesser Bitcoin-related issues? Fuck, I can't even get the Reddit actors to comment: http://www.reddit.com/r/Bitcoin/comments/2kqqyu/is_bfl_using_bitpay_for_money_laundering_purposes/ It's like it's some taboo subject like 'who is Satoshi' or something akin.

[1echo]

this is possible hard to tell

[Gleb Gamow]

this is possible hard to tell

Really? Even after it's shown that the https://blockchain.info/address/1QAHVyRzkmD4j1pU5W89htZ3c6D6E7iWDs BWA was virtually totally funded via blocks found on the block chain and paid out accordingly from BFL's (formally Josh Zerlan's) EclipseMC (EMC) pool? On top on that, Josh has yet to call me a liar even after the dozens of times I've espouse such fact, something he's always done in the past when he believed in his mind such was warranted.

http://www.walletexplorer.com/txid/45d41f9297ebfbb0d840b47698698d0b3499b35ce109e55093477ffd97a49763

Lemme see if I can put this post in words.  You've identified that the infamous 1QAH paid to a wallet known to belong to Eligius (i.e., Luke Jr.) an even 100 BTC, which, given the latter's known programming work for BFL, can be inferred to be compensation for work.  That re-establishes that 1QAH was controlled by BFL.  

Around two hours later, that 100 BTC, plus an additional 11, were transferred out of some wallets of unknown ownership, with 100, matching the payment to Eligius, going to ("repaying") 1QAH, and the rest going to another wallet of unknown ownership.  One could then infer that those three wallets were also controlled by BFL.

You also note that these transfers occurred after business hours, which may or may not be significant, if this were a transaction involving a programmer.

That about sums it up. But, if I'm incorrect, Josh will be here to call me out a liar and offer up proof depicting how I'm mistaken.

Also, it looks like most all the BTC that the 1QAH BWA garnered stemmed directly from the EMC pool as shown in the following:

http://www.walletexplorer.com/wallet/0dd32fc1a663150a
http://www.walletexplorer.com/wallet/0dd32fc1a663150a?page=2
http://www.walletexplorer.com/wallet/0dd32fc1a663150a?page=3
http://www.walletexplorer.com/wallet/0dd32fc1a663150a?page=4
http://www.walletexplorer.com/wallet/0dd32fc1a663150a?page=5

Then, BFL was using BitPay to liquidate the BTC to fiat, treating them as an exchange oppose to ONLY as a payment processor.

#ASKFTC



I'll tell you what! Thanks to Josh showing us how the game is played, as well as sharing with us the rules, this sure the hell is a fun sport... And glad I'm on the winning team.

[BayAreaCoins]

You give BitPay BTC and you get cash.  

You can't judge stolen BTC or it fucks shit up.  Not accepting stolen cash is a felony in the USA I believe.

Be mad at BFL not BP.

[MrGreenHat]

Why is nobody paying any attention to this? This could be VERY bad for the bitcoin economy if Bitpay was aware that BFL was using them as an exchange. Am I the only one who realizes what the OP has discovered?

[MrGreenHat]

You give BitPay BTC and you get cash.  

You can't judge stolen BTC or it fucks shit up.  Not accepting stolen cash is a felony in the USA I believe.

Be mad at BFL not BP.

You don't think BitPay's accountants wouldn't notice a transaction that large and look into it?
EDIT: to be clear, I do not believe that BitPay had prior knowledge at this point, as I believe they are a legitimate company and very much respect the business. (And I live right down the street from them).

[BayAreaCoins]

You give BitPay BTC and you get cash.  

You can't judge stolen BTC or it fucks shit up.  Not accepting stolen cash is a felony in the USA I believe.

Be mad at BFL not BP.

You don't think BitPay's accountants wouldn't notice a transaction that large and look into it?

Lol what do you need a company or government looking over your transactions to make sure they are ok before they give you what is yours?

BitPay supposed to save the day for y'all and steal the Bitcoins back?

[MrGreenHat]

You give BitPay BTC and you get cash. 

You can't judge stolen BTC or it fucks shit up.  Not accepting stolen cash is a felony in the USA I believe.

Be mad at BFL not BP.

You don't think BitPay's accountants wouldn't notice a transaction that large and look into it?

Lol what do you need a company or government looking over your transactions to make sure they are ok before they give you what is yours?

BitPay supposed to save the day for y'all and steal the Bitcoins back?

I never directly purchased anything from BFL so I have no dog in this fight. My concern is for the impact this could have on the entire bitcoin economy if BP happened to be aware of this (which at this point, I don't believe there is sufficient evidence to make such an assumption).

[Gleb Gamow]

Why is nobody paying any attention to this? This could be VERY bad for the bitcoin economy if Bitpay was aware that BFL was using them as an exchange. Am I the only one who realizes what the OP has discovered?

You give BitPay BTC and you get cash. 

You can't judge stolen BTC or it fucks shit up.  Not accepting stolen cash is a felony in the USA I believe.

Be mad at BFL not BP.

Basically, I can reply to both your welcome posts at the same time.

Even though I don't like the alternative, I'm working under the assumption that BitPay may have been unaware of BFL's practice, albeit it'd been hard to miss.

I'm claiming that the BTC that BFL quasi-stolen from its customers were converted to fiat and deposited in some bank using BitPay as its own personal exchange, and not as a payment provider that BitPay only is.

I hate to say it, but Sonny Vleisides, Jeff Ownby and Josh Zerlan, et al., have opened up a can of worms that shouldn't have been sealed in the first place.

Suffice to say, I'm been privy to a myriad of information, and I'm hear to tell you it's a lot worse than you can imagine and what I'm all allowed to say at this time. 

#ASKFTC

[Gleb Gamow]

You give BitPay BTC and you get cash. 

You can't judge stolen BTC or it fucks shit up.  Not accepting stolen cash is a felony in the USA I believe.

Be mad at BFL not BP.

You don't think BitPay's accountants wouldn't notice a transaction that large and look into it?

Lol what do you need a company or government looking over your transactions to make sure they are ok before they give you what is yours?

BitPay supposed to save the day for y'all and steal the Bitcoins back?

I never directly purchased anything from BFL so I have no dog in this fight. My concern is for the impact this could have on the entire bitcoin economy if BP happened to be aware of this (which at this point, I don't believe there is sufficient evidence to make such an assumption).

Sadly, I can easily prove that all the large withdraws from the https://blockchain.info/address/1QAHVyRzkmD4j1pU5W89htZ3c6D6E7iWDs BWA prior to and after the supposed HashTrade $1M USD transaction was via BitPay.

Most the proof can be found here: http://www.walletexplorer.com/wallet/0dd32fc1a663150a

#ASKFTC

[Gleb Gamow]

Apologies to all you guys inquiring about what's the inside info I possess, but I'm swore to secrecy. Still feel free to PM me though, whereupon I'll personally thank you for thanking me as I've been doing.

On a sad note, now you guys are keeping me busy, with nary a one being some troll PM as far as I can tell.