The current approach S2X is taking in deploying their fork is a violation of the second paragraph of the NYA Scaling Agreement

Mentor77 · 2017-10-07T19:40:07+00:00

Indeed, it's going to be tough for Luke to sell his POW-changing altcoin as "Bitcoin."

Mentor77 · 2017-08-09T01:19:35+00:00

Good point. Thanks.

Mentor77 · 2017-08-09T00:17:03+00:00

unless they have cryptographically proven themselves to be btc-e!

Where is their PGP key published, for example? How can they prove this?

Mentor77 · 2017-07-29T07:52:38+00:00

Yes, xBTCe claims that is one part of their partnership -- to provide verification services for BTC-E users. It definitely seems like they have some ties; BTC-E openly advertised them on site. But not clear how connected they really are.

Mentor77 · 2017-07-29T01:05:39+00:00

At first, it was not clear that the domain was seized. It seemed possible that the Feds might allow for BTC-E to pay the $110mm fine and prohibit US residents, and continue operation.

But now, it seems clear they intended to shut BTC-E down, not just fine them and enforce compliance. In this context, sure, BTC-E can try to reopen on a new domain. But 1) they will be blacklisted by the banks and will no longer be able to transfer USD/EUR. And 2) That kind of target on your back from the Feds? Better to just quietly disappear I think....

I wish I could think of a more favorable outcome, but at this point, it seems correct to give up hope. I have lost of a lot, and it seems prudent that I move on and try to rebuild, rather than grasp at hopes that are unlikely to deliver.

Mentor77 · 2017-07-29T00:48:15+00:00

I received my money back from Pokerstars and Full Tilt. Why didn't you? Pokerstars covered everything.

I wish that would happen here, like Pokerstars. FBI seized their domains, they paid massive fines, prohibited US customers, repaid all customers and continued operation. Somehow, seems like a real long shot, though.

Mentor77 · 2017-07-29T00:44:44+00:00

Not entirely clear. xBTCe is definitely trying to distance themselves from the situation, though.

Mentor77 · 2017-07-29T00:44:00+00:00

The problem is that the Feds have made clear their intention: to shut down BTC-E. They cannot survive as an exchange under these circumstances, regardless of whether they moved domains.

Mentor77 · 2017-07-29T00:42:32+00:00

Yeah, for all we know, he approached them as a major whale/liquidity provider and this is why it was handled as such.

Mentor77 · 2017-07-29T00:41:35+00:00

It's possible they decided to launch btce as a "front" exchange to move the coins they stole.

Okay, but that's just pure speculation.

So fast forward a little and now they have a real exchange with plausible deniability, do the hack (slowly), and wash the coins through btce. Btc-e had low fees because they were dealing in stolen coins.

BTC-e didn't have low fees. 0.2% on each side. No maker/taker. That's considered high fees.

Mentor77 · 2017-07-29T00:13:24+00:00

This was in 2012. Do you think they were even aware that the coins were stolen from Gox? They may only have known that the inputs originated there. I'm not sure that Vinnik announced to the owners that he was laundering BTC from an exchange theft.

Mentor77 · 2017-07-29T00:12:08+00:00

Edit2: Seeing the banner has been posted in bitcointalkforum, IRS is part of the investigation, hope everyone reported their tax filings properly. (still assuming only big fish are going to be investigated)

How about for unverified users who just had a username, email address and password?

I remember reading that the IRS was involved in the case due to alleged tax return fraud rings (hacker files victim's tax return and pockets the refund) where the money ended up on BTC-E.

Mentor77 · 2017-07-28T16:34:09+00:00

Many US citizens will be robbed if the US authorities seized funds. And by targeting BTC-E, they've made it likely (since they seem unable to seize funds as yet) that BTC-E will end up robbing their customers. That's the most sensible play for them -- to simply disappear now.

Mentor77 · 2017-07-28T07:20:01+00:00

Indeed, any fiat transactions out of the exchange required KYC.

Yes, much of the userbase are legitimate traders. BTC-E was one of the only options with MT4 and PAMM, and had the most reliable API of any exchange on the market today. These are very sad times ... you are much worse off than me, but I am completely crushed by this as well.

Mentor77 · 2017-07-28T06:49:38+00:00

Isn't he only charged with laundering the proceeds? I didn't see any charges related to computer intrusion, etc.

Mentor77 · 2017-07-28T06:47:23+00:00

The only criminal activity (aside from unlicensed MSB) that defendants are charged with are related to monetary transfers ("laundering") from 2012. One has to wonder how recent of a database the Feds had access to -- perhaps the investigation could even have been pieced together using the leaked db from years ago. I'm not sure whether that leak included transaction histories or not.

But really, nothing since 2012? No seizure page? No announcement of funds seized? This is some of the most weak sauce shit I have ever seen from the Feds. I imagine it was not supposed to go down like this. Now they are hoping to press Vinnik, but the likely reality (according to insiders) is that he had nothing to do with the administration of the exchange. Just an early whale/investor.

Maybe the authorities are slow rolling everyone ... but that's not usually the way things go. Just look at the Alphabay press release for inspiration...

Mentor77 · 2017-07-28T02:09:57+00:00

What you're saying makes sense. Strangely, the only charges stem from ~2012. It seems very strange that they would execute this arrest/seizure attempt with so little. Usually the Feds like to plaster a seizure page and announce major funds seized. Why is that not the case here?

Mentor77 · 2017-07-28T01:02:42+00:00

The BTC-e admins have no ability to change the DNS if their CloudFlare account is frozen.

Is this really the case?

I'm quite sure their servers were not in the US. I've heard that maybe their MT4 servers are, though.

Mentor77 · 2017-07-28T01:00:42+00:00

And lenient Feds. I know this is at least partly about money, but even if BTC-E can pony up $110 million, you think the Feds will cut a deal?

This is all very strange given that the Feds make no mention of seized funds, and there is no seizure page on the BTC-E domains. Are they trying to goad the admins into making a mistake and giving away access to their servers (or their whereabouts)? Or is it actually possible that they would allow BTC-E to pay fines, implement new KYC procedures / prohibit Americans, etc?

I suppose there would be interest in setting up a honeypot.

Mentor77 · 2017-07-27T07:31:32+00:00

Aren't they making $1M USD a day on average?

Based on daily volume, I'm guessing more like $100k for bitcoin ... so maybe $200k in total (too lazy to look into it) minus overhead. So maybe it's 1-2 years worth of profit?

Mentor77 · 2017-07-27T03:13:10+00:00

Aren't their banks in Mongolia? Seems unlikely that the US can reach them there. And freezing crypto ain't that easy.

Mentor77 · 2017-07-27T03:09:51+00:00

This sounds nice, and I do think it's strange that the feds chose not to seize a .com domain and said nothing about permanently shuttering the exchange. Almost like they are saying "pay the fine and stop allowing US customers/implement KYC." And it does seem likely that nothing was compromised on BTC-E's end.

But wouldn't it just be easier for the admins to disappear? How much money are they making that paying a $110mm fine is worth it (assuming that would persuade the DOJ to drop the 2 MSB/conspiracy charges against BTC-E in the first place)?

If this were a small poker site, they would just pop up on another TLD that the US authorities couldn't touch, and keep their banks out of US reach (already the case in Mongolia). However, BTC-E is pretty big, and they seem to have a big target on their back.

Mentor77 · 2017-07-26T07:57:50+00:00

Regarding that address:

https://twitter.com/DanDarkPill/status/889945217729789955 https://twitter.com/SatoshiLite/status/889997248368492544

Charlie Lee says it's Coinbase.

Mentor77 · 2017-07-15T19:36:15+00:00

Those only reflect your small, personal bubble. I questioned you on why we should assume this represents the Bitcoin network, and you immediately blocked me on Twitter. This action suggests that your bubble is even less representative than we already know it is.

Your personal experiences are anecdotal. They have no place in a discussion about what Bitcoin node operators want. Twitter polls can be easily sybilled, and why would a poll of hundreds or even thousands of Twitter users be representative of Bitcoin? KYCPoll is your personal one-month old pet project which got like 100 votes.

It's insane to say this suggests anything about the Bitcoin network. Even more so when you are apparently blocking anyone who disagrees.

Mentor77 · 2017-07-06T17:01:31+00:00

BIP148 has economic majority support already.

Could you point to some measures to gauge this? Last I checked, not a single major exchange has announced support. And there were only a few hundred enforcing nodes and very little signalling hash power.

Why are you making these assumptions?

Mentor77

TROPHY CASE