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Wednesday, June 8, 2011

When Will Mt. Gox's Owner Be Indicted?

Anonymous has left a new comment on your post "Silk Road Was A Partial AgoristBay Implementation":

Bitcoins are actually worth $18.75/bitcoin right now on
It's possible that all those Bitcoin purchases were made by undercover police, preparing for a crackdown!

Psychopath Senator Chuck Schumer has said that "Bitcoin is money laundering!" Bitcoin potentially threatens the State banking cartel. State thugs are already mobilizing violence against Bitcoin and Silk Road.

Mt. Gox is one of the leading exchanges, for trading Bitcoins for State paper money.

PayPal has already shut down the account of people who operated a business trading USD for Bitcoins.

I hope that Mt Gox's owner lives in a country that doesn't have an extradition treaty with the USA!

Based on recent precedent, State thugs may seize a website domain name without trial. There is a risk that the domain will be seized without trial. Some people say that it's a risk for Internet freedom, that the DNS servers are controlled by the US government.

Anybody who operates a business trading Bitcoins for State money is at risk. You might be accused of "money laundering" or "operating an unlicensed money transmitting business".

Such laws were used against E-Gold. The exact same law could be used against Bitcoin exchange operators.

Here's how the scam works:
  1. An undercover policeman buys Bitcoins from you.
  2. The undercover policeman uses those Bitcoins to buy drugs or child pornography.
  3. Now, you're guilty of "money laundering" or "facilitating child pornography" or "operating an unlicensed money transmitting business".
Economic activity X is forbidden. Anyone who develops a system for facilitating private economic activity is therefore a criminal.

State thugs probably won't go after individual users. However, they may pursue anyone who operates a Bitcoin-based business.

I don't like Bitcoin. Every client gets a copy of every transaction. That's a flaw and not a feature.

I was really offended by articles like this one. I saw this commonly cited.
By using an untraceable currency called Bitcoins and downloading and installing an encrypted browser, the illicit network has remained anonymous since its launch in February, officials said.
Bitcoin *IS NOT UNTRACEABLE*. EVERY CLIENT GETS A LIST OF EVERY TRANSACTION. Even if you use a different Bitcoin wallet ID for every transaction, State thugs can analyze the flow of Bitcoins.

Suppose a Bitcoin travels from A to B to C to D. State thugs capture B. Then, A, C, and D are at risk.

Bitcoin is very vulnerable. State thugs won't go after everyone. They will go after anyone who operates a Bitcoin-based business. State thugs will probably wait, and indict/arrest all heavy Bitcoin users simultaneously.

State justice is slow. However, once State thugs aim their "justice" system against you, then you probably are SOL.

Heavy Bitcoin users can be indicted based on laws that already exist. Even if your business is Internet-based, you still have to physically reside somewhere.


Anonymous said...

Now they are worth $30.40/Bitcoin.

Anonymous said...

With a little effort, bitcoins are really not that traceable. The developers may not like to emphasize it, but there are many ways to obfuscate the transaction history.

Use of third party wallets (mybitcoin, mtgox), client-side chaumian blinding (, and tumblers make tracing extremely difficult. These services will only multiply as bitcoins become more popular.

The fact that you can view transactions through is an advantage! You can see exactly how much of your transactions can be traced (and NOT traced once you've used the methods outlined above). You know when you're money has been completely unlinked to you.

Furthermore, because bitcoins can be programatically manipulated, the entire process can be automated!

dionysusal said...

Federal Gangsters Seek Crackdown on Bitcoin - Good Luck

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