Hell Yes, I Bitcoin

[Foxx]

2016 hack of Bitfinex

 

Two Arrested for Alleged Conspiracy to Launder $4.5 Billion in Stolen Cryptocurrency

Quote

Two individuals were arrested this morning in Manhattan for an alleged conspiracy to launder cryptocurrency that was stolen during the 2016 hack of Bitfinex, a virtual currency exchange, presently valued at approximately $4.5 billion. Thus far, law enforcement has seized over $3.6 billion in cryptocurrency linked to that hack.

 

“Today’s arrests, and the department’s largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals,” said Deputy Attorney General Lisa O. Monaco. “In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions. Thanks to the meticulous work of law enforcement, the department once again showed how it can and will follow the money, no matter what form it takes.”

 

“Today, federal law enforcement demonstrates once again that we can follow money through the blockchain, and that we will not allow cryptocurrency to be a safe haven for money laundering or a zone of lawlessness within our financial system,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “The arrests today show that we will take a firm stand against those who allegedly try to use virtual currencies for criminal purposes.”

 

Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31, both of New York, New York, are scheduled to make their initial appearances in federal court today at 3:00 p.m. in Manhattan.

 

According to court documents, Lichtenstein and Morgan allegedly conspired to launder the proceeds of 119,754 bitcoin that were stolen from Bitfinex’s platform after a hacker breached Bitfinex’s systems and initiated more than 2,000 unauthorized transactions. Those unauthorized transactions sent the stolen bitcoin to a digital wallet under Lichtenstein’s control. Over the last five years, approximately 25,000 of those stolen bitcoin were transferred out of Lichtenstein’s wallet via a complicated money laundering process that ended with some of the stolen funds being deposited into financial accounts controlled by Lichtenstein and Morgan. The remainder of the stolen funds, comprising more than 94,000 bitcoin, remained in the wallet used to receive and store the illegal proceeds from the hack. After the execution of court-authorized search warrants of online accounts controlled by Lichtenstein and Morgan, special agents obtained access to files within an online account controlled by Lichtenstein. Those files contained the private keys required to access the digital wallet that directly received the funds stolen from Bitfinex, and allowed special agents to lawfully seize and recover more than 94,000 bitcoin that had been stolen from Bitfinex. The recovered bitcoin was valued at over $3.6 billion at the time of seizure. ...

 

[Hedge]

 

[Billsandhorns]

They weren't going to let this new form of currency go on for too long without starting to go after it.

[Foxx]

37 minutes ago, Hedge said:

 

 

I'm sure it's completely unrelated.

 

Canada sanctions 34 crypto wallets tied to 'Freedom Convoy' protests

Quote

The list of sanctioned crypto wallets includes 29 Bitcoin addresses, one Ethereum address, one Ethereum Classic address, one Litecoin address, one Monero address, and one Cardano address.

 

Canadian authorities have ordered all regulated financial firms to cease facilitating transactions from 34 crypto wallets tied to funding the trucker-led “Freedom Convoy” protests in Ottawa, and elsewhere across the country.  ...

 

[Foxx]

If Kraken is saying this...

 

[Foxx]

https://twitter.com/pluggedinn/status/1495246939838840840

 

[IDBillzFan]

Can anyone refer a place to dig into "crypto for dummies" for someone who brings the dumb to dummies?

 

Maybe I just spend too much time online, but I'm starting to see how seizing assets from a donor is becoming the new "he raped me," where all the bad shit happens to the accused first and THEN they try to figure out if he's guilty.

[Foxx]

57 minutes ago, IDBillzFan said:

Can anyone refer a place to dig into "crypto for dummies" for someone who brings the dumb to dummies?

 

Maybe I just spend too much time online, but I'm starting to see how seizing assets from a donor is becoming the new "he raped me," where all the bad shit happens to the accused first and THEN they try to figure out if he's guilty.

I will try to give a quick primer after work today.

[Foxx]

4 hours ago, Foxx said:

I will try to give a quick primer after work today.

Okay so... this is not going to brief, it is a complicated subject.

 

I started working on the reply but it may be a couple days until I feel the response will have the justice that the question deserves. I may get it done tomorrow, don't know.

 

Please bear with me, it will be forthcoming.

 

[Foxx]

Crypto Primer

Read time: 8 minutes 5 seconds

 

 

It will be hard to keep this brief because there are so many different aspects and tangents that are relatable to each one that one wouldn't want to leave something out for fear of not giving a complete picture. I shall try to keep it on topic, be cogent, and hit the high points while not meandering off into the weeds too much. No guarantees, though.

 

First and foremost, at this time, because of the volatility, crypto should only be considered as speculative vehicles.

 

In the fiat world, we take many of the aspects that it contains for granted because we have been conditioned basically from birth to be enmeshed in its various trappings. There are equally as many facets in the crypto world, but essentially being a digital platform, these may seem like a foreign entity until it becomes second nature. The many different aspects carry their own concerns, each important in their own right.

 

Aspects

• Entry/Exit points
• Coins/Tokens 
• Wallets
• Blockchains
• Taxation

 

Entry/Exit Points:

What is an entry/exit point? This is where you put fiat into and convert crypto back into government-sanctioned reserves.

 

In most instances, you will need to put fiat into the cryptoverse to obtain crypto. Though this is ever-changing (as more and more retailers are accepting crypto payments), to 'realize' your crypto holdings, you will probably have to convert it to fiat once again. Entry and exit points.

 

There are new entry/exit points coming online every day, it seems (they need to gain SEC and individual State approval, depending on the state), such as Crypto.com. And I'm sure there will be many, many more as time goes by. There are also many established ones such as Coinbase (perhaps the most popular), Kraken, Gemini, and many others. Google is your friend.

 

Paypal is offering crypto, but last I knew, they do not allow an off-ramp (taking your crypto off their platform). So I'm not sure what good they are other than to be utilized for speculation purposes.

 

As GUS (government US) has caught up to most things crypto, getting verified on any of these platforms will entail KYC and AML submissions. Depending upon your interest and involvement, there are different levels of information you will be required to submit. In addition to those levels, restrictions on what you can and can't do upon those respective levels.

 

Lastly, while I do not advocate anything that does not comply with the law, there are other 'exit points' where you work on a peer-to-peer basis.

 

I am of the opinion that, of all the various aspects, outside of being able to pay directly with crypto, it is these on/off ramps that are the weakness of the whole system: albeit an unavoidable one at this point in time.

 

 

Coins/Tokens:

What is a Coin/Token? They are digital assets that can only exist on a digital platform because of their decentralized nature.

 

What do I want, a coin or a token? The short answer is that it depends on what you are looking to do. At their essence, a coin exists on its own blockchain (Bitcoin, Ethereum, Litecoin, etc., a token does not have its own blockchain and is built upon others blockchains. Ethereum, because of its smart contract capability, is perhaps the most popular blockchain for tokens. Vitalik Buterin is one smart muther &#%$er. He had the vision.

 

A coin equates to money, and a token is representative of a product or application. In general, you are going to need coin to purchase token. Tokens can be viewed as investment vehicles or what might be termed as stocks in a company. Depending upon their nature, Tokens can also hold other capabilities, such as being used as a coin on its own network.

 

ICO (initial coin offering) is the new IPO. There may come a time when you want to participate in an ICO. Again, there will be certain KYC and AML restrictions that may/may not prevent/allow you to do so. 

 

 

Wallets:

What is a wallet? A wallet is nothing more than entry upon a blockchain that holds digital information. Every wallet has two keys, a 'public key' and a 'private key.'The public key is the location of said 'wallet' on the blockchain. The public key is also known as its 'address.' This 'public key' is what you are giving out to interact with other wallets, i.e., sending and receiving crypto. The private key is the information you enter to access the wallet, which allows you to interact with the contents therein. These private keys are usually quite long to make it hard to be hacked by running brute force attacks. You want to keep your private keys private, safe and secure.

 

This is important. I can't stress this in strong enough terms - If you don't have the private key to a wallet, you don't truly own the contents. Custodial services abound, and they do not give you private keys to any wallet's contents.

 

In the short history of crypto, there have been several cases where custodial wallet contents were stolen either by the platform's owners or hackers. Be careful when utilizing a custodial service.

 

To give you some idea of what I am talking about, perhaps the most iconic was the hacking of Mt.Gox. Over 840K BTC was stolen. BTC was worth roughly $550 each in February '14, making the haul at the time in the vicinity of $460 mm. At BTC's all-time high ($65K), those same 840K BTC would be worth... 56.6 billion dollars. So, I trust you can see the incentive for hackers. Bitfinex and Wex are two other custodial platforms that crypto was hacked/stolen.

 

In addition to the above, we also see where just last week, Canada wanted custodians to deny access by specific users to wallets and their contents. Again, be wary of custodial services.

 

All that said, custodial wallets are fine for what they are intended. My only recommendation is that you do not leave more in them than you are willing to lose. 

 

Take your holdings to a wallet that you have the keys for. Transfer in and out as needed. Regarding this aspect, though, I would recommend you develop 'clean' practices to minimize your risk exposure. As you probably know, hackers are everywhere, and they are even more prevalent and persistent in crypto.

 

Clean practices include but are not limited to, not using a computer that doesn't have a good antivirus program, not using a computer that visits dodgy content (i.e., porn and the like). Contracting key loggers, spyware, and other nefarious entities can affect your overall experience.

 

Another critical warning here: You can not send crypto to any address. You risk losing your asset if you send it to the wrong blockchain. Make sure you are sending/receiving it to the relevant blockchain. Bitcoin to a BTC address, Ethereum to an Ether address, Litecoin to an LTC address, Tokens to their respective blockchains, etc...

 

Specific types of wallets include paper, browser, software, and hardware ones. Paper wallets used to be considered the most secure because they are not connected to the internet and are generally used for cold storage (long term). However, there are now other cold storage methods considered the gold standard of cold storage today. Again, Google is your friend here. It is said that hardware wallets are the second most secure.

 

Hardware wallets include KeepKey, Ledger, and the dominant, Trezor. I know many people who have preferences for each, but, in my opinion, they are all generally pretty much as safe as the other. These wallets will most likely hold any crypto asset. However, please do not assume that they will. Make sure that your wallet supports the crypto you want to send to it before you hit that send button. 

 

Browser wallets include MEW (My Ether Wallet (the original Ethereum wallet), My Crypto, Metamask, Brave (which is actually part of the Brave browser), amongst a plethora of others. 

 

Software wallets include Exodus, Atomic, and others.

 

You could always run a BTC core wallet and help the network by having a record of every single transaction ever made on your computer. If you have a high-speed computer, it would probably take a week to download the entire BTC blockchain and catch up to current blocks. If you have a reasonably usable computer, it may take you two weeks of running it 24/7 to catch up.

 

I have probably used every specific wallet I have mentioned, and they all work fine. Which one(s) you will ultimately utilize will be a matter of your preferences and desired usage.

 

 

Blockchains:

What is a blockchain? A blockchain is a decentralized digital ledger that is a historical record of every transaction ever made. It is because they are decentralized and scrutable by anyone on the network that it is said they are an immutable, anti-fragile ledger and therefore the safest method of record-keeping there is.

 

When a transaction is submitted for validation, it goes out into what is known as a pool. This pool is where transactions await being picked up to be processed by 'miners' or 'stakeholders' (dependent upon what type of algorithm that blockchain operates upon, PoS or PoW) who process the transaction(s). There is a process for this where many potential transactions are batched into a 'block.' These blocks are often processed at regular intervals, dependent upon several factors. 

 

Once a miner/stakeholder has processed a block, it is submitted to the network for confirmation by 'nodes' (who also are the ones to initially broadcast the transaction(s) to be processed). This 'confirmation' involves checking that the rules of the network were followed. Depending upon the rules of the respective blockchain, there are a number of confirmations required before the transaction will be officially approved and recorded to the blockchain. Different standards apply, but generally, BTC requires six confirmations, while Ethereum requires 35.

 

 

Taxation:

No need to define what taxation is. It is one of the two certainties in this life. The other, well, when you meet that one, the IRS won't matter anymore.

 

Every individual's circumstance is unique and particular to them, so there is no one size fits all advice to be given here. I recommend consulting with a CPA knowledgeable about crypto and your specific circumstance to determine what they think is in your best interests.

 

What follows is just a generalization and is not intended to take the place of a financial professional's advice knowledgeable of your particular circumstance. Please do your due diligence.

 

The IRS rules and regulations have evolved this last decade. With those rules seemingly changing yearly. There was a time when you could trade crypto for crypto, and it would be considered much along the lines of the real estate 'like for like' transactions. Of which capital gains/losses were not incurred. You only had to worry about capital gains/losses when you off ramped. Those days, however, are long gone.

 

Today, anytime you do anything with crypto, you have to record and ultimately report it. This includes anything from simply moving an asset to another wallet to realizing a capital gain or loss. As anyone who has been in this world for any amount of time knows and who tries to do things by the book can tell you, it can be daunting. There are, however, crypto trackers out there that will make the recording of 'events' more manageable for you. If you are like me, though, and prefer to do your record keeping, recording these 'events' as they happen, will be the key to good record keeping and reporting practices. 

 

 

I believe this is about it. I am pretty sure I may have forgotten a thing or two, but I can't think of what it may be at the moment. If there is any aspect I have not covered or anything I have attempted to explain that is murky, or you have questions, please feel free to ask for clarification on any point or question you may have. If preferred, you can also PM.

 

I hope you find this little primer helpful, and if you do onboard and find that it was helpful, you can drop a bit of ETH in the tip jar. 0x2942bf9Ce0592e9E05d89AcEA935326834862102

 

 

[Foxx]

Something to keep an eye on.

 

[Foxx]

Done.

 

Biden signs executive order mandating study of federal crypto policy including cyber security and a U.S. digital currency

Quote

...The executive order focuses on six priorities for the Biden administration in the digital asset space, including consumer protection, financial stability, illicit finance, economic competitiveness, financial inclusion and innovation, and will give agencies time ranging from 60 to 120 days in order to formulate policy recommendations. ...

 

... The order also focuses on the potential benefits of a central-bank issued digital currency, an issue that the Federal Reserve has been been studying in depth since 2020.

 

Last month, the Federal Reserve Bank of Boston released research, in collaboration with the Massachusetts Institute of Technology, on the technological viability of a Fed-backed digital dollar. Federal Reserve Chairman Jerome Powell has said the Fed won’t move forward with issuing a digital currency without the support of Congress. ...

 

[Foxx]

https://twitter.com/disclosetv/status/1501560140604059652

 

[Foxx]

Do yourself a favor and watch this 26 minute video.

 

[KD in CA]

Thanks @Foxx;  very interesting keynote and panel discussion afterward.

 

For me the key point was starting around the 11 minute mark when he got into the question of essentially whether we are reverting to a 1970s (Dem led) high-inflation, high-tax, high-regulation era and what that means for equities and thus, equity alternatives.   The chart showing the gold:equities ratio in 1980 v today is stark.

 

As with anything, after a prolonged period of success, dumb people start trying to change things without any rational analysis, and right now we are seeing a wave of self-loathing Americans foolishly turning their backs on free market economic concepts in favor of (his other key point) the ESG 'hate factories' that have been enabled by corporate leadership.

 

It sound like the real unlock for BTC is the point O'Leary made about most huge pension/equity funds not yet allowed to invest in crypto.

[Foxx]

Morgan Stanley Says Crypto Could Become More Widely Used as Currency

[Foxx]

Those of you who have been following my crypto currency posting over the years know that one day I expect that Bitcoin will become an international settlement vehicle. And if and when that comes to pass, I am also on record as expecting the price of one Bitcoin to hit 9 or 10 digits.

 

Still a ways off but along comes the following.

 

Russia considers allowing cryptocurrency for international payments as sanctions over Ukraine bite

Quote

Russia is considering allowing cryptocurrency to be used for international payments, Interfax news agency quoted a government official saying on Friday.

 

"The idea of using digital currencies in transactions for international settlements is being actively discussed," Ivan Chebeskov, head of the finance ministry's financial policy department, was quoted as saying. ...

 

[Nouseforaname]

On 5/28/2022 at 9:53 AM, Foxx said:

Those of you who have been following my crypto currency posting over the years know that one day I expect that Bitcoin will become an international settlement vehicle. And if and when that comes to pass, I am also on record as expecting the price of one Bitcoin to hit 9 or 10 digits.

 

Still a ways off but along comes the following.

 

Russia considers allowing cryptocurrency for international payments as sanctions over Ukraine bite

 

How will they reconcile that with their goal of controlling their population?

[Foxx]

On 6/15/2022 at 12:57 PM, Nouseforaname said:

How will they reconcile that with their goal of controlling their population?

Slow day?

apologies, i don't know what came over me. all of a sudden my arms and hands started waving all over the place and i typed the above...

[Nouseforaname]

1 hour ago, Foxx said:

Slow day?

apologies, i don't know what came over me. all of a sudden my arms and hands started waving all over the place and i typed the above...

Think what you want about the west but the russian population is controlled in terms of what they have access to.  Being able to use bitcoin would go against that since it is anonymous.

Edited June 16, 2022 by Nouseforaname