The FBI owns our digital money
This article is a stark reminder of the dangers of digital exchanges.
Never keep more than you are willing to lose in an online exchange
One might think that hackers are the only ones to own our digital currencies without our consent, but after the hacker gets caught this may happen.
The Alexander Vinnik follow up
After the arrest of the Russian hacker the cryptocurrency exchange BTC-e has said its downtime was due to “FBI agents entering its data center.” but previously they stated that the reason was due to “unscheduled maintenance”. BTC-e has been down for almost a week and the aftermath becomes bigger when their customers start to get worried about their virtual money.BTC-e announced that: ” if we cannot restart our service by the end of August, we’ll begin returning funds from Sep. 1.”“Anybody who thought about this for a second understood that law enforcement was working on a case against BTC-e,” said Jerry Brito, executive director of Coin Center. “The question was just whether the government would catch them.”He also stated that:“BTC-e’s system was designed so that criminals could accomplish financial transactions with anonymity and thereby avoid apprehension by law enforcement or seizure of funds,”Maybe it’s something larger that just Vinnik, but until we get more updates the speculations can go out of hand.
Is our money safe?
Everyone is waiting for future updates as the FBI has gained control where its wallets are located, and this is actually good news, although the same cannot be said about BTC-e. The company was hoping to resume its regular service by August 6 but as the days go by this seems less and less likely to happen.The US Securities and Exchange Commission announced last week it was seeking $110 million from BTC-e for flouting anti-money laundering rules but the news are still fresh and there are more updates to come. In the meantime the funds are in the hands of the FBI and the information about the refunds will be known in the coming weeks.
Read this article and more at http://mycoinslearning.com/
This is a clear line for new people to see the difference between CUSTODIAL wallets, like the ones used on exchanges, and PRIVATE wallets like the ones you can download yourself. When you hold your own private keys that gives you all of the power and someone would have to physically seize that private key from your computer in person (or hack it). This is where cold storage comes in handy.
Exactly. Hardware Wallets and BitShares Decentralized Exchange!
The FBI could easily raid an exchange or website - but it's way harder to get every piece of mining equipment of a decentralized network, especially when the infrastructure is distributed over the world in many countries and legal jurisdictions.
Therefore, the exchanges are risky based on where they are, but crypto-currencies as a whole are much safer being decentralized and distributed.
Summary: Use a private wallet and don't keep money on exchanges longer than you need to!!!
You got it! :)
Gracious, one more reminder indeed. It's hard enough receiving funds from a backed up customer support center - the government does much more do diligence. I hadn't heard this update. Thank you sir!
oh,,,,,
this is exactly why we need decentralized exchanges like nvo.io and exscudo.com (maybe an exchange?)... FYI this isn't a plug, these projects aren't even active yet.