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|Criminals are cashing in on Bitcoins for illegal activity from buying drugs, hiring hitmen and forging passports on the Dark Web|
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A Sun investigation has now proved that Bitcoin is linked to a range of serious crimes on the Dark Web
By Miles Goslett and Nick Pritchard
8th December 2017, 2:03 am
Updated: 8th December 2017, 4:22 am
THE smartly dressed young woman barely attracted a glance as she swept into the second-hand electronics store and approached the Bitcoin machine.
Standing there for half an hour, she peeled off £50 notes from a fat roll and fed them into the slot — until £10,000 in sterling had been converted into the electronic currency that only exists online.
When she came back the next day to do the same, store manager Simao Arinto became suspicious.
“It was £50 after £50 after £50,” said the boss of the CeX store in central London’s Tottenham Court Road.
“She told us she got some kind of insurance that paid out for some kind of disease. What was the truth? Who knows?”
The police, however, believe they do know the truth, warning this week that this fast-growing digital cryptocurrency is being exploited by organised criminals who use Bitcoin cashpoints to launder dirty cash.
Bitcoins were being traded for around $20,000 each yesterday as speculators created the biggest buying rush the world markets have ever seen.
Some exchanges saw the value of the digital currency 52 percent rise at its peak yesterday – with the past seven days seeing a 72 per cent rise.
The astronomical price increases–driven by demand for the coins the numbers of which are limited–are the biggest in the history of modern financial markets, even beating ‘Tulip Mania’, a 17th century financial crash that became known as the first financial ‘bubble’.
Bitcoin’s price has gone up faster in past three years than the price of tulip bulbs did before that bubble burst, according to figures from the New York firm Convoy Investments.
Within minutes of logging on to the Dark Web — an encrypted corner of the internet that can only be accessed by special browsers — we found organised criminals offering a chilling array of services.
For payment in Bitcoin, we could get a computer hacker to “destroy a business or a person’s life”, buy drugs, passports, cloned credit cards and counterfeit money or even order acid attacks, rape and murder.
Bitcoins only exist as lines of computer code and are created and stored online–and the surge in value means that criminals who had previously been paid in Bitcoin are seeing their wealth rise astronomically.
They can be ‘mined’ by computer users using software that both verifies other people’s transactions and generates a new ‘block’ of code by solving increasingly complex mathematical problems.
They were created in 2009 by Satoshi Nakamoto — an unknown person or group — but have surged in value by more than 1,400 per cent this year alone.
They hit a peak this week when one unit went from being worth £8,750 on Tuesday to £12,500 Thursday at the time of writing. The value has probably risen again since.
Bitcoin’s rapid rise is fuelled by the fact there is a limited supply — only 21million will ever exist — and that it is completely unregulated by banks and governments, making it attractive for criminals or those who want to keep their transactions secret.
One of the first sites we come across on the Dark Web is Dream Market, where a gram of super-strength cocaine costs 0.00344 of a Bitcoin, the equivalent of £43.
The vendor, called Drugkingz, promises to ship it anywhere in the UK or Ireland.
Another site, called Clone Card Crew, offers cloned credit cards, and boasts: “All cards are skimmed and cloned. They are legal to receive. Using them is a different thing.”
One truly disturbing site is Slayers Hitmen. The online agency claims to have 48 operatives worldwide who will inflict all sorts of physical attacks in return for Bitcoin.
An assassination by shooting costs the Bitcoin equivalent of £11,185. An acid attack is £3,000, rape £1,500 while a “scare” comes in at £750.
The site asks for 50 per cent of the fee to be deposited upfront in an online Bitcoin wallet.
At the UK Guns and Ammo site, you can buy a new 9mm Glock 19 pistol for 0.04 Bitcoins, worth £500. A new 9mm Walther P99 handgun goes for £650.
Yet another site offers “high quality” fake euros that will apparently pass UV and pen tests and work in vending machines.
Thirty bills, worth 600 euros, cost the Bitcoin equivalent of 315 euros.
Cryptocurrency specialist detective inspector Timothy Court, of the Met’s Organised Crime Group, said this week: “We are seeing criminals using Bitcoin to buy drugs and firearms on the Dark Web and also laundering money with it.
“Cash is hard to move for criminals but cryptocurrency is an easy way to move assets across borders.”
He added that it was an “emerging issue” which is being closely monitored by law enforcement agencies.
Julian Dixon, CEO of anti-money laundering and big data specialists Fortytwo Data, said: “I warmly welcome The Sun’s investigation.
“I hope the authorities sit up and take notice of this report, which suggests highly dangerous individuals and criminal organisations are using a cloak of anonymity surrounding Bitcoin to finance crime.
“Regulation of crypto-currencies is long overdue so the funding of these activities by worldwide criminals, in even the darkest region of the web, ceases.”
The Met’s Serious and Organised Crime Command is carrying out a cryptocurrencies training programme to help sharpen its officers’ awareness of the problem.
But they face an uphill battle combatting it, as detective superintendent Nick Stevens explains.
He said: “Cryptocurrencies are not illegal, but they are unregulated, decentralised currencies that can be quickly transferred across borders then converted into the currency of the country where the funds are received.”
He added that his team is currently investigating several major criminals who use Bitcoin and the Dark Web for “the supply of drugs, firearms, modern slavery and child exploitation”.
The CeX store in Tottenham Court Road is more used to customers buying and selling unwanted DVDs than arriving with large sums of cash.
But that could change now it is one of only 98 UK High Street shops to host a Bitcoin terminal.
Boss Mr Arinto told The Sun that the Bitcoin users he sees are a mixed bunch, but one trait unites them: A desire for privacy. This is not surprising.
The terminals offer an easy way for drug dealers and other criminals to launder cash without having to go through any bank checks.
After notes have been converted into Bitcoins, they can be moved anywhere in the world electronically then withdrawn as clean cash.
They are stored in a virtual wallet on a PC or mobile phone app and can then be withdrawn from another Bitcoin machine in the local currency.
This system makes the cash almost impossible to trace. Mr Arinto said: “I see people from all types of backgrounds. Some try to cover their faces and will look around to see if anyone is looking.
“Some of them come in and make the whole shop stink of weed.
“There is a £400 limit on deposits, but there is no limit on how many deposits you can make and no identity checks.
“You want to ask questions but it’s their personal life.”
That might be so, but it is a problem that has the potential to affect us all.
There are more than 1,300 cryptocurrencies in use, with new ones emerging all the time.
Bitcoin’s extraordinary growth has sparked alarm among police and intelligence agencies across the globe, with the Russian mafia in particular known to be capitalising on the phenomenon.
The Way It Works
BITCOIN is a form of digital currency, created and held electronically. It is produced by people running powerful computer programs to solve complex mathematical problems. Here we answer the main questions about it.
What makes it different from a normal currency? There are no physical notes or coins, so no single institution controls it. It exists only as lines of computer code. The value of Bitcoin is highly volatile, which has led people to buy it as a risky speculative investment.
Who created it? An anonymous software developer, or possibly developers, known as Satoshi Nakamoto.
Who prints it? No one. Bitcoin is created digitally by a community of people that anyone can join. Bitcoins are “mined” using computing power to solve puzzles and unlock currency units.
can be divided into smaller parts. The smallest divisible amount is one hundred-millionth of a Bitcoin and is called a Satoshi, after the founder.
Is its use truly anonymous? You can set up a Bitcoin address in seconds – and it does not have to be linked to any name or address. But Bitcoin stores details of every single transaction that has ever happened in a huge version of a ledger, called the blockchain. This blockchain tells all about each purchase by each address linked to each Bitcoin.
Detective chief superintendent Mick Gallagher, head of the Met’s Organised Crime Command, says police have been aware of the threat for around 18 months but “at the moment it feels like there is significant growth”.
This week, the Treasury said that money-laundering regulations should be updated to include virtual currencies.
But while we wait for that to happen, law agencies have their work cut out to stop Bitcoin and its rivals allowing requests for serious crimes to be just a few clicks away.
Signed in as mikenova
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After a year of largely denying it, even while throwing in the occasional wink, the Russian government is now finally admitting that it rigged the United States presidential election in Donald Trump’s favor. It’s not saying so in exact words. Instead it’s acknowledging through a state-controlled media outlet that it arrested one of its own intel officers for admitting to the U.S. that Russia rigged the election. Rachel Maddow broke this news on her show, but left it an open question as to why Russia is choosing now. I have some thoughts on that.
Keep in mind that just yesterday, Russian President Vladimir Putin announced that he’s “running” for reelection in early 2018 after all. I’m putting “running” in quotes because he’ll rig this election like he always does, and he’ll win automatically. But this announcement is something of a surprise, because just a week ago, someone planted a series of stories in major European newspapers which claimed Putin was considering retiring. These stories had to have been planted by the Russian oligarchs as a warning to Putin: get your act together on this nonsense with Trump and sanctions, or we will put you out of business.
To be clear, even though Putin has total control over his puppet Trump, there is nothing that Putin can do to get Trump to lift U.S. sanctions on Russia. Both political parties are intent on increasing those sanctions, in retaliation for Putin’s decision to rig the election for Trump. There is only one possible way Putin can get those sanctions lifted, even though it may be a long shot, and he’s savvy enough to know it.
The United States will continue to take a defensive and punitive position toward Russia as long as Donald Trump illegitimately remains in power. If Trump is gone, and Russia begins to atone for its sins, then maybe those sanctions get incrementally walked back as a way of encouraging future good behavior. I’m not saying Putin is preparing to oust Trump in the hope of keeping his oligarchs happy. I’m just saying I think he’s testing the waters for ousting Trump by admitting today that he rigged the election. Watch Putin’s next move carefully.
The post Why the Kremlin is suddenly admitting that it rigged the election in Donald Trump’s favorappeared first on Palmer Report.
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Signed in as mikenova
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Think about this for a moment. By this time, Flynn and everyone else in the country was aware that Russia had interfered in the election and that there was serious suspicion surrounding the Trump campaign’s and transition team’s dealings with Russian actors. They knew about the “Steele dossier” because it had been written up in Mother Jones before the election, and Trump himself had been briefed on it by FBI Director James Comey. If what this whistle-blower says is true, Flynn was even more reckless than we knew.
This news is especially damning since we already know that Flynn failed to disclose trips to the Middle East on behalf of ACU when he filed his security clearance renewal application in 2016. It means that his memory was sharp enough to call his friend even before Trump had finished his speech, but not good enough to remember to put his dubious business activities on his disclosure forms. And Robert Mueller knew all about it.
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|Russia Takes a Step Toward the Post-Putin Era|
Russian President Vladimir Putin’s announcement that he would run for a fourth term as president was long predicted, though it seemed to some Russian observers (incorrectly) that he waited unusually long to make it. Less predictable is how the system Putin built will plan its perpetuation after his term ends in 2024, when he’s constitutionally barred from running again.
Putin’s third term has been his most important one, more momentous even than his first, in 2000-2004, which was marked by U.S. Republican-style economic reforms, a flat income tax, the harsh taming of the 1990s oligarchs and the recentralization of power. In 2012-2018, Putin abandoned any pretense of playing along with the U.S. and its European allies and sought to make it clear to the rest of the world that Pax Americana was ending. In that, he has been largely successful. He has, however, neglected the base on which his geopolitical achievements rest — his own Russia, the vast, still poor, increasingly cynical and potentially very angry nation that Putin may not quite represent, or even run, anymore.
Putin claims his biggest successes outside of Russia. He has held on to illegally annexed Crimea, and the Kremlin retained operational control over the mob-run, separatist “people’s republics” in eastern Ukraine, most recently through what looked like an engineered coup in one of them. Putin was held back from further territorial gains by cost considerations — it appears important to him to keep regular military casualties low while making proxies shoulder most of the burden — but his minimum goals, including instability in Ukraine, have been achieved. It’s obvious even to the most biased observers that, despite massive Western support, modern Ukraine is a corrupt mess that is hardly more European than when its people decided to break away from the Russian orbit at the beginning of Putin’s third term.
Despite U.S. resistance, Putin helped his Syrian ally, President Bashar al-Assad, win his civil war. At the end of 2017, it’s clear that if Assad is leaving at all, he’s not being toppled, the way the U.S. and its allies toppled Saddam Hussein and Muammar Qaddafi. Putin’s successful, resource-light intervention has redrawn the Middle Eastern relationship map, helping effectively rip Turkey out of the Western alliance and forcing even Saudi Arabia to seek a good working relationship with Moscow, which was solidified by an oil policy alliance.
Putin has also given hope to illiberal forces throughout Europe, which failed to win critical elections this year but which will remain useful allies. And, deservedly or not, Russia has been established in the Western elite’s mind as a hacking superpower, a different kind of tech force than the U.S. with its commercial internet behemoths. It’s a reputation Putin is looking to strengthen by embracing cryptocurrency technology as an alternative to the Western-dominated financial system.
All of this has cost Russia its place in the G-8 and its vague aspirations to membership in a greater Europe, stretching from Lisbon to Vladivostok. But it hasn’t made Russia a pariah to the rest of the world, most notably to China, which has benignly allowed Putin to shake the foundations of the Western-led global order. Putin’s third term will likely be remembered as the four years that made a multi-polar world if not a reality, then a possibility.
But as Putin’s skill was applied to geopolitics, he was an increasingly absent feudal lord at home. Gleb Pavlovsky, a Kremlin political operator during Putin’s early years in power, captured this feeling best in an interview with Echo Moskvy radio on Wednesday:
Indeed, if first- and second-term Putin was a competent micromanager, making all the important decisions and mediating every significant conflict, Putin now appears to have lost that ability.
One high-profile example is the ongoing trial of former economy minister Alexei Ulyukayev, against whom a close Putin associate, Igor Sechin, the head of state-owned oil giant Rosneft, organized a sting operation to accuse him of extorting a $2 million bribe. The trial has been open to the press, and the secretive Rosneft chief has suffered the indignity of being repeatedly summoned to appear and inventing excuses not to. This is the kind of conflict that, in earlier days, Putin wouldn’t have allowed to play out in the open — at least not for long.
Another example is the defiant independence of Ramzan Kadyrov, the Putin-installed head of Chechnya. His conspicuous wealth, violent suppression of opponents and insistence on conservative Islamic values in a secular state are an ongoing challenge to Moscow’s authority — but Kadyrov’s warlord reputation seems to keep the federal law enforcement apparatus at bay. Again, Putin hasn’t intervened.
Even the banishment of Russian officials from next year’s winter Olympics is indicative of Putin’s weakening leadership. Russian state propaganda outlets discuss it in terms of geopolitical retribution — but Putin could have staged a domestic clean-up and kicked out officials who had, at best, failed to out a doping conspiracy in Russian sports and at worst, participated in it. He could then have appealed to his old friend International Olympic Committee President Thomas Bach for support. Yet no such clean-up has taken place, indicating Putin’s remoteness and relative indifference.
Throughout the third term, Putin also drifted on economic policy. Little was done to prepare Russia for an era of low oil prices. A modest agricultural boom which has turned the country into a top grain exporter is no substitute for the lost hydrocarbon revenues, and snail-paced economic growth based on a borrowing-fueled consumption surge isn’t enough to generate economic optimism. Putin has repeatedly shown a reluctance to promote any bold change that would show Russians a more hopeful future.
Though Putin remains by far Russia’s most popular politician, Russians have been apathetic about the March election. According to Levada Center’s latest poll, only 58 percent of voters intend to cast ballots. In 2012, 65.3 percent turned out, and polls at the same time in the electoral cycle indicated that more than two-thirds would cast votes. Alexei Navalny, the anti-corruption activist and Putin’s only serious opponent, won’t be allowed to run against him despite months of campaigning and mustering visible support in the Russian hinterland, especially among the young. He has promised to campaign actively for a boycott of the election.
The Soviet-style campaign announcement on Wednesday — during a visit to a truck factory in Nizhny Novgorod, where a worker asked him a “spontaneous” question about the election — is evidence of the Kremlin’s lack of ideas, characteristic of its domestic policy during Putin’s third term. Putin’s legitimacy after his inevitable win will be the lowest of his reign, spurring an ever more active battle for succession, in which new players are likely to start emerging as soon as Putin is re-enthroned.
Putin has cast Russia in the role of the world’s biggest geopolitical disruptor. But its current performance is unsustainable without coherent, successful domestic policies. Putin has presided over, indeed enabled, a corrupt, inefficiently run country where people — including those in the top echelons of business and power — just fend for themselves as best they can. The question of what kind of future Russia might have will arise after Putin’s re-election, and Putin won’t necessarily have much say in it.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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