Show: Reality Exploit Roundtable
Date: May 30, 2013
Topics: The Bitcoin Oligarchy, Skull Cracking TOR, The Right to Print and Bear 3D Guns, Patriot Act 0wns Liberty Reserve, Financial Thought Crime
Panelists: Hiro, Wise-Guy, Plato, Josh
Tags: Bitcoin, Digital Cash, p2p, Tor, The Liberator, 3D Printing, 3D Guns, Patriot Act, Liberty Reserve, MSB, FinCEN
- Voodoo: Black and Yellow Pages, Beer Can Engines
- Plato: Twitter, Reddit
- Hiro: Podcasts: AgoristRadio | News: OrlinGrabbe
Topic 1 – wise-guy
Darknets like Tor have been used by whistlebowers, dissidents and criminal for years now Australia is seeking ways to use the coordinated power of governments over ISPs to break their security.
Defense Distributed updates
Topic 2 – plato
Mt. Gox / Dwolla / Liberty Reserve
Although Mt. Gox is run out of Japan, they used a US LLC to open a Dwolla account. That account has been seized by the
DHS for acting as an unlicensed money transmitter.
The founder of Liberty Reserve has been arrested and assets seized as well as the domain names for independent sites
that acted as Liberty Reserve exchangers.
In conjunction with Costa Rican authorities and Spanish police, U.S. law enforcement participated in a joint operation
on Friday to arrest the founder of Liberty Reserve S. A., a private digital currency exchange service based in Costa Rica.
U.S. authorities accused the currency exchange of facilitating $6 billion worth of money laundering, calling it a “bank
of choice for the criminal underworld.”
Since 2002, Liberty Reserve had been operating one of the oldest and most popular payment processors in the world with
millions of clients. Vitalik Buterin of Bitcoin Magazine credits the company with being “one of the chief enablers of
the Bitcoin economy’s early growth.” Payment methods such as credit cards and ACH transfers are not a great match for the
irreversible bitcoin, because those payment methods can be reversed, or charged back. In 2010 and 2011 with the bitcoin
exchanges struggling for irreversible inbound payment methods, Liberty Reserve Dollars and Liberty Reserve Euros were
proprietary digital units that satisfied the need for payment finality.
- Ars – Feds smash Liberty Reserve
- Costa Rican Arrested in Spain for Alleged Financial Crimes
- U.S. Shuts Currency Exchange Allegedly Tied To $6B In Money Laundering
- Website Domain Name Seizure Order (.gov PDF)
- Indictment alleging money laundering (.gov PDF)
- Bruce Sterling analyzes Secret Service comments on Liberty Reserve bust
Topic 3 – Josh
Money Laundering is Financial Thoughtcrime
Jon Matonis writes in American Banker:
At its essence, money laundering is the act of concealing money or assets from the state to prevent its loss through
taxation, judgment enforcement, or blatant confiscation. However, as the late J. Orlin Grabbe wrote: “Anyone who has
studied the evolution of money-laundering statutes in the U.S. and elsewhere will realize that the ‘crime’ of money
laundering boils down to a single, basic prohibited act: Doing something and not telling the government about it.”
Topic 4 – Hiro
The Bitcoin Oligarchy
“One of the big issues is merged mining,” said [Alex] Waters [CEO of BitInstant]. It was something many of the pool operators were pushing for.
Such pools allow users to combine their processing power as to mine bitcoins as one single entity. What happens is
that it gives the operators of those pools plenty of political power.
“This is a problem,” said Waters. “There are only a few pool operators and only a few pull requests that benefit
them.” But given their political weight, there’s a higher chance those changes get added.