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Bitcoin Crime Government The Almighty Buck

Russian Bitcoin Issuers Will Risk 7 Years In Prison (thestack.com) 99

An anonymous reader writes: The Russian Ministry of Finance has announced an amendment to the country's criminal code which will impose prison sentences of up to seven years for the issuing of Bitcoin or other cryptocurrencies. A government source speaking to Interfax (Russian) said that the maximum prison sentence for individuals found issuing cryptocurrencies would be 2-4 years, and/or up to three years' worth of salary or income, whilst managers of dispensing institutions could face seven years in prison, up to four years of income equivalent in fines, and a lifetime ban from similar posts. Russia announced the ban on Bitcoin or other 'money surrogates' in February of 2014, asserting that cryptocurrencies facilitate money-laundering and other criminal activity.
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Russian Bitcoin Issuers Will Risk 7 Years In Prison

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  • by Anonymous Coward

    You dirty commoners get to stew while our economy craters!

    • Seriously. There comes a time when a government just effectively openly declares:
      "I am insane and megalomaniacal. Just ignore me and go full black market libertarian."

      The Russian government apparently just did this.

      • really it's as if they want another October 1917, but instead of commies waving red tomes this time around maybe they should try something else. Mafia "State Capitalism" just isn't cutting it, gawdless-Commie-ism didnt'....gotta be something else to try, some europeans countries doing a lot better than they are now

      • by rtb61 ( 674572 )

        I gather from you comment, you have a lot of hard cash sunk into mining ponzi currencies, specifically bitcoin. It's not like everyone wasn't warned it was inevitable, especially when bitcoin miners were douching around bragging about using bitcoin to enable criminal activities and cheat on taxes. Russia fault, hmm, not so much more like the US government's fault. The US government picked up a whole bunch of bitcoins are were using them to fund criminal espionage activities, kind of screwing it up for you.

        • by KGIII ( 973947 )

          I've learned a few things in my life - often by observation but I also have a penchant for learning the history of a variety of subjects.

          There are a few things that are near certainties:

          If you screw with the wealthy and powerful, it doesn't often turn out well.
          Revolutions *never* result in the utopia the revolutionaries wanted - it's temporary, at best.
          There will be violence, it is as inevitable as entropy.
          The pendulum swings both ways - at either extreme it's often really bad.
          There are a lot of pendulums.
          A

          • by rtb61 ( 674572 )

            Knowledge is power, what was is not what will be because knowledge has changed in the interim. So tackling the corrupt rich is no longer what is was, we know the problem and the problem is not money, it is genetics and the brain defect of psychopaths. So there is a simple problem to solve how to keep psychopaths from positions of governance, control and influence because the destructively corrupt everything they touch, it is their inherent nature. This is new knowledge both in terms of genetics and psychol

  • by idbeholda ( 2405958 ) on Friday March 11, 2016 @02:28PM (#51679389) Journal
    The bank robs you.
    • Re:In Soviet Russia (Score:4, Interesting)

      by Anonymous Coward on Friday March 11, 2016 @02:34PM (#51679461)

      Also in Japan, Switzerland, Sweden, and Denmark. Also, the ECB. And probably coming soon to a country very near you.

      • Re: (Score:2, Informative)

        by Aighearach ( 97333 )

        People who think bank fees are robbery should probably read more. Maybe that "fine print" is important documentation, and not just entertainment for silly nerds?

        As an American, every time I've ever had a bank fee I didn't think was fair, I just went into my bank and asked them to rescind the fee (or challenged it if it was a technical error) and they agreed to do it every single time.

        Of course, I only complained about incorrect, confusing, or unclear fees, not just regular ones that are part of the offered

        • by KGIII ( 973947 )

          Wait, what?

          Somewhere in that pile of logical and well-reasoned text, albeit not tacitly articulated, you're expecting people to be educated, alert, and accepting of personal responsibility or accountability?

          That's no way to get elected.

          • Somewhere in that pile of logical and well-reasoned text, albeit not tacitly articulated, you're expecting people to be educated, alert, and accepting of personal responsibility or accountability?

            No, I simply target my communication at those parties, and I really don't care about the comprehension ratio or average interpretation. ;)

            There is way too much available noise for me to worry about the external ratio. I'm only worried about controlling my own data stream.

  • It looks like they are basically making it illegal to sell bitcoin for money within Russia. I can't imagine any legitimate businesses will accept the hassle, but hackers will likely still be able to exchange bitcoin for money overseas. Personally, I think the large delays in accepting bitcoin transfers is probably more harmful to its value as a currency, and this would likely not help any. If I held any bitcoin, I would sell them now before they reach firesale value.
    • by Yomers ( 863527 )
      Basically nothing gonna change - you may confirm it by observing BTC/RUR exchange offers at localbitcoins.com. Russian internet currency exchanges have operated illegally since the beginning of times. I see news like this couple of times a year - yep, bitcoin transactions continue to illegal in Russia.
    • That's the whole point, the oligarchs were supposed to divest themselves of significant foreign assets and start bringing their money home years ago, in preparation for annexing Ukraine and the anticipated sanctions.

      This is entirely about preventing cash flight. The black market is bringing money in, not sending it overseas. This is not about he black market, and how big the effect on price will be depends mostly on how much of the bitcoin market is actually legit Russian wealth pretending to be the black m

    • by jfengel ( 409917 )

      Exactly. It provides a tool for identifying criminals: if you're using bitcoins, then you're doing something illegal. They don't even necessarily have to enforce the bitcoin law, just investigate whatever you're doing for the bitcoins. And if they fail at that, they can enforce the bitcoin law, like putting mobsters in jail for tax evasion.

      Not saying that's a good thing, necessarily. The same thing could go for criminalizing cryptography. Even without that, crypto does potentially make you a target, and I s

      • by dbIII ( 701233 )

        like putting mobsters in jail for tax evasion

        That example keeps on coming up but if you look at raw (not sanitized) history it's for the wrong reasons.
        It was about "routing around damage". Hoover's infamously corrupt FBI was not going to deal with the mobsters but the IRS had not been paid off so the government of the day used them to deal with the problem.
        We still have lie detectors in use as a legacy of Hoover taking kickbacks.

    • This is a symptom of the sort of authoritarian shit that "pussy riot" was jailed for protesting against and has nothing much to do with bitcoin itself. Bitcoin is not seen as something ideal people do so it's being outlawed for being on the fringe - it really has nothing to do with whether bitcoin is a scam or not.
      It's a symptom of increased efforts to control.


      I should add that we should not dismiss it as being an "only in Russia" problem since a tendency to authoritarian rule crops up all over the place
  • Let's see: There's an award given for information leading to anyone using the TOR network. And now a prison sentence for anyone issuing a form of currency that can hide your identity. What's next, outlawing hoodies so the IP Cams can ID you on the Russian Equivalent of Facebook?
    • You should read up on bit coin it is much less anonymous then using cash. There is a public electronic record for every transaction made.
      • You should read up on bit coin it is much less anonymous then using cash. There is a public electronic record for every transaction made.

        It's "differently anonymous", not "less anonymous". For one thing, if you're transacting in cash then it's hard to avoid interacting with the other party in person. They probably know who you are, and your location can be monitored to reveal who you interact with. Cash isn't exactly impossible to trace in its own right, either, thanks to the need for physical handling (thus leaving DNA evidence) and unique serial numbers.

        Bitcoin transactions are recorded in a public ledger, but that ledger only lists the ad

    • by GuB-42 ( 2483988 )

      Don't know about Russia but in France, it is forbidden to wear clothing designed to hide your face in public space.
      It was conceived as an anti-Burka law but it may apply to hoodies. It is no more serious than a parking ticket and it is rarely put in practice but it can give the police a reason to arrest you.

  • In Soviet Russia? (Score:5, Informative)

    by Nidi62 ( 1525137 ) on Friday March 11, 2016 @02:38PM (#51679493)

    Russia announced the ban on Bitcoin or other 'money surrogates' in February of 2014, asserting that cryptocurrencies facilitate money-laundering and other criminal activity.

    I believe that was mistranslated. I think it should actually read that cryptocurrencies don't facilitate the graft and money grabbing of Putin and his friends. Sure, I might be nitpicking on a little error of translation, but it's important to get things right.

    • I just assumed that the next law would be against the use of the ruble as it can be used to facilitate money-laundering.

  • That's the whole point! Untraceable, unaccountable, easily-hidden money. The cops can't find it on you by checking your pockets; the FBI can't find it by checking your bank account; and the individual block chains tend to flow in and out of exchanges with no association to who is putting them in or taking them out. Bitcoin exchanges are money laundering operations as a feature: bitcoins go into a consolidated fund, and the same number of bitcoins come back out of that consolidated fund; they're different block chains, so their block history is not traceable to any particular original owner.

    It's like they just wrote the mission statement of Bitcoin and said "ILLEGAL!"

    • Wait... explain to me why are consensual value-for-value trades are considered "illegal"? I'm a libertarian, and I'd like to know.
      • by Archangel Michael ( 180766 ) on Friday March 11, 2016 @02:58PM (#51679671) Journal

        Because "Control"

        If the government can't control you, you are a danger to the government. And government cannot allow its people to be uncontrolled.

        And this "war on crypto-currency" will fare about as well as the War on Drugs has.

        • will fare about as well as the War on Drugs has

          That's only because we've been coddling the drug dealers. Had we gotten rid of them things would have turned out much different.

          Instead we keep doing the same things over and over and expecting different results.
        • by tnk1 ( 899206 ) on Friday March 11, 2016 @03:15PM (#51679829)

          That's not really true. The War on Drugs hasn't failed at all.

          The War on Drugs has been a *huge* success... for those people who want a ready made excuse to throw people in jail.

          Guess what the War on Bitcoin will provide?

          The goal of the law isn't to *end* Bitcoin, it is merely to keep it from overtaking the ruble for most purchases. In this, it will totally succeed.

          Also, by insuring that you can only buy criminal things with now-criminal crypto-currency, it will ensure that Bitcoin never gets a reputation as being useful for normal business. Just having a Bitcoin will equate you with all sorts of drug runners, terrorists, and child pornography sorts all by association. I can already envision the judges and jury recoiling from you with a look of fear and disgust on their faces for your dirty crimes.

          Bitcoin threat averted. And here you thought that they were failing....

          • The war on drugs wasn't designed to toss people in jail. The laws designed to toss people in jail are the differences between Crack and Powder versions of Cocaine, between 1 OZ pot and more than one OZ. Speaking of Pot, isn't it interesting that in spite of it being "illegal" for years, that people still use(d) it?

            Basically, I see BitCoin as something that is outside Government Control, and thus a danger to governments. And enough people will use it for normal activities in addition to Illegal ones. And onc

            • by tnk1 ( 899206 )

              And people will still use Bitcoin, but while it is illegal, you won't be able to avoid using government currency for just about everything that the government might notice. That is them winning.

              You could always get and use pot. It's never been particularly hard to get. That's not the point. The point was to drive it underground and make all activities associated with it into something you could charge people with.

              Yes, they didn't intend to have the War on Drugs become something to throw people in jail f

        • <gasp> Oh deary me! I do hope so, since I have a few dollars worth of bitcoin now that will be worth hundreds or thousands if this progresses the same way as the War on Drugs.
      • by bluefoxlucid ( 723572 ) on Friday March 11, 2016 @03:38PM (#51680045) Journal

        You're a fad libertarian if you didn't know governments frequently ban things like carrying large amounts of money, traveling with large amounts of money, or making large bank account deposits and withdrawals without disclosure to the authorities. In Alabama, a routine traffic stop will end in the police confiscating your drug money if they notice you have more than $100 in cash. No drug charges, just "that's a lot of cash to be carrying. Don't you use credit cards, boy? That must be for drugs. Now we can't arrest you for drugs, but we can take your money on suspicion of involvement in illegal activities."

      • Russians aren't interested in libertarianism, and not even close.

        If that is your personal perspective, great. But it has nothing to do with Russia, and if you insist on trying to understand Russia based on your personal views, instead of their views, you'll have little chance to understand because it will never appear to make any sense. It will just be gobblygook until you try looking at it using "theory of mind."

        Russia banned cash flight in preparation for annexing Ukraine and being sanctioned by the inter

    • by Coren22 ( 1625475 ) on Friday March 11, 2016 @02:54PM (#51679641) Journal

      How do I take the money from my drug enterprise into bitcoin without any tracing back to me?
      Is there a bank where I can walk up with $10 million and ask to convert it into bitcoin without the bank requiring ID?

      • It's one thing to trace a $10 million withdrawal to you; it's something completely different to trace that $10 million back to a Mexican in Palo Alto acting as a known drop point for large cocaine shipments. How *did* that $10 million get into your bank account? It looks like money went into the exchange, and money came out; but we don't know whose hands it passed through, or what investments it went through, in its context as transactions.

      • How do I take the money from my drug enterprise into bitcoin without any tracing back to me?
        Is there a bank where I can walk up with $10 million and ask to convert it into bitcoin without the bank requiring ID?

        They didn't say the crime is easy, they said this tool is used by the people doing it. ;)

        There are additional steps and parts to the plan. Generally, you have to create a fake business and pretend it has income, and so you lose the overhead of the business, and pay taxes on the claimed profit, so you end up paying more taxes than a legit business. You don't just drop it in the bank. You do a bunch of risky things, and end up with 25 cents on the dollar if you're good at it. That is why lower level criminals

    • That's the whole point! Untraceable, unaccountable, easily-hidden money. The cops can't find it on you by checking your pockets; the FBI can't find it by checking your bank account; and the individual block chains tend to flow in and out of exchanges with no association to who is putting them in or taking them out. Bitcoin exchanges are money laundering operations as a feature: bitcoins go into a consolidated fund, and the same number of bitcoins come back out of that consolidated fund; they're different block chains, so their block history is not traceable to any particular original owner.

      It's like they just wrote the mission statement of Bitcoin and said "ILLEGAL!"

      Avoiding the egregious charges of card processing companies is a legitimate and very appealing use. That's is why we accept risk in society. So we can have nice things, even though bad people don't stop being bad.

      • Avoiding card charges isn't what bitcoin was originally marketed for. "Privacy" was its main thrust.
        • Avoiding card charges isn't what bitcoin was originally marketed for. "Privacy" was its main thrust.

          Sigh. You have it exactly backwards.

          Read the Satoshi paper. [bitcoin.org] Avoiding the need for trusted intermediaries (i.e., banks/card companies) when processing electronic transactions over the internet was what bitcoin was originally "marketed" for.

          Privacy is mentioned in the paper, but only in so much as to show that the system might actually afford less privacy than the traditional banking model.

    • by MightyYar ( 622222 ) on Friday March 11, 2016 @03:23PM (#51679893)

      It's basically exactly analogous to cash.

      With cash, you can trace it with the serial number and with bitcoin you need the chain - both are trivial to work around, though laundering physical money is harder.

      With cash you cannot tell who gave you the cash- this is also the case with a "laundered" bitcoin. Here cash has the edge since you don't need to take any action.

      With cash, you can hide it anywhere - just like your bitcoin wallet. Bitcoin has an edge here because the wallet is ultimately just a number. It is easier to hide a slice of information than a physical pile of cash.

      Both seem to scare the hell out of authorities. That's perhaps the best "feature".

  • by s13g3 ( 110658 ) on Friday March 11, 2016 @02:44PM (#51679545) Journal

    "Russia announced the ban on Bitcoin or other 'money surrogates' in February of 2014, asserting that cryptocurrencies facilitates public competition to the government's own money-laundering and other criminal activity while making it more difficult for the government to interfere with legitimate private economic activity."

    FTFY.

  • by zenlessyank ( 748553 ) on Friday March 11, 2016 @02:47PM (#51679571)
    about the laws made by man to control man. It has always been this way and it will ALWAYS be this way now and in the future. Pass all the laws you want.
    • the lawmakers have armed goons and cages and torture centers to support their will and control over you, and enforce their interpretation of the scribbles they made on paper. you're been fucked, are being fucked, and will be fucked over until you die.

      • Since we are all born fucked, I don't see this as intimidating.
        • by KGIII ( 973947 )

          As your moniker indicates you're an American, I can see why you'd express such bravado seeing as this is a half world away.

          • And you sound like a typical earthling willing to follow whatever any cocksucker tells you, I would imagine. I am sorry you are motivated to let others think for you, and being an 'American' has nothing to do with whether you succumb to others will. You might as well put a bullet in my head, whether in Russia, South Africa, or Israel, or America. I won't follow rules I don't like no matter where they originate. Troll on motherfucker!!!!
            • by KGIII ( 973947 )

              You're the third pretend tough guy I saw yesterday on Slashdot. You guys having a convention or something?

          • America has identical issues

  • ..This just in! The Russian Ministry of Logic declared the following: Russia announced the ban on currency other 'money surrogates' in March of 2016, asserting that all currencies facilitate money-laundering and other criminal activity. *not an actual announcement*
  • Governments (this time it's Russia) cannot allow competition on criminal activity. Governments are the only ones with the 'legal' (legal in quotes, anything governments do they see as legal) authority to any form of criminal activity. All that governments are is criminal activity. No individual is allowed to murder another individual, to steal, to kidnap. Governments do all those things and it's legal because they say it is.

    I am going to translate some of the text from here [interfax.ru]:

    Moscow, March 10th, INTERFAX.RU

    Ministry of Finance has prepared a more strict set of rules that will be added to the criminal code. These rules will apply to issuance of fiat currencies (in TFA they call it 'currency surrogates'). Anybody issuing a 'currency surrogate' can be sent to prison for up to 4 years. For any top managers of banks or financial organisations the prison sentence can be up to 7 years and also a prohibition to work in certain top management positions in the future.

    The previous version of the law was less strict in that it only would have sent a person to prison for up to 1 year maximum (or if somebody is a part to an organisation up to 2 years maximum) for any one of the following:
    1. purchasing with the intent to sell,
    2. selling of 'money surrogates'

    According to the March rule changes, now for the same 'offence' the punishment will include a monetary fine of up to 500,000 rubles or an amount equal to the 3 years of salary or 3 years of any other income of the 'offender' or imprisonment of up to 4 years.

    In case an individual acts as part of an organisation the prison sentence went up to 4 years. Also for an organisation (organized group) there is also a fine starting from 500,000 rubles up to 1,000,000 rubles or an amount equal to 2 - 4 years or salary or other income and a prison sentence of up to 6 years.

    Also for top managers of a financial institution, a bank, an insurance company, a stock market, etc.), the penalties will be much heavier. They will face up to 7 years in prison and they will no longer be allowed to work in top management positions in certain companies (and government I suppose) and they will not be allowed to work in certain professions for a period of up to 3 years. They also may face a fine from 1,000,000 to 2,500,000 rubles or an amount equal to 2-4 years of their income.

    Ministry of Finance considers usage of 'money surrogates' to be a proof of criminal activity by definition and by default.

    • Governments do all those things and it's legal because they say it is.

      It can be stated simply that "government" is an organization that is exempt from the ethics of a society.

      Otherwise it'd just be a club, or a business. The question a considered person must ask himself is, "if our ethics are good, why do we need an exception, or if we need an exception, are ours ethics sufficiently univeralized?" n.b. government schools don't teach philosophy in K-12; who really needs to learn how to think?

  • the bit coins you!

  • Wouldn't that include any form of barter or trade that did not involve the government sanctioned currency?

    This would mean even playing games that use fictional currency would be illegal, wouldn't it?

    • This would mean even playing games that use fictional currency would be illegal, wouldn't it?

      Yeah - when I testified on a similar bill in my State, I pointed out that their language puts the banking department in charge of WoW gold.

      The bureaucrat who was there said, "nuh-uh". They had no clue about the blockchain or anything else to demonstrate any competency in the field. So, of course they want to be in charge.

    • by Prune ( 557140 )
      1. In virtually every nation, barter and trade are subject to taxes. Yes, if you're a a rancher in Texas and trade your horse for another's few cows and you don't pay tax on that, you have actually done something illegal.
      2. You can only pay your taxes in the national currency, in the US and pretty much all other nations who are sovereign currency issues.
      Now, put (1) and (2) together and you'll realize that the combination enforces the use of the official currency even if there is no explicit law banning o
      • by mark-t ( 151149 )
        That would mean that even doing someone a favour in exchange for any kind of good or service would also be illegal... since no money will have exchanged hands. For example, saying that I will mow your lawn next week if you let me borrow your car tonight would be an example of a private barter that cannot be taxed, and this is somehow illegal?
  • Russian users just got hit with their first ransomware attack?

  • by sims 2 ( 994794 ) on Friday March 11, 2016 @04:25PM (#51680441)

    I always use Tide when I launder my money. http://nymag.com/news/features... [nymag.com]
    Leaves it with a nice fresh scent too!

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