Quote from: bitbadger on April 19, 2013, 02:34:01 AM

the irony of that is that we the customers can't now get our deposits now because of this seizure of hardware and closure of bank accounts. Something that this seizure was apparently supposed to avoid!

So it's the banks and authorities and not Simon who are preventing us from doing what they accused Simon of preventing us from doing.

Depends. In retrospect it looks like Simon was running his business in violation of european regulations for the prevention of money lending (and financing of terrorism). As posted multiple times in this forum, running such an exchange he needs to verify the identity of at least significant customers (if not all) and needs to report any transactions above 15k euro as well as suspicious transactions at any volume (if someone withdraws 1000 euro 100 times or whatever). In addition he needs to be able to answer questions regarding who is the legal responsible for any customer account at any time.

With no ID verification in place, all of the above doesnt work. If any money laundering then happens (as it seems it did, e.g. from phished bank accounts), as he can not identify who did the trading the dirt sticks to him, as unwitting accomplice due to neglect of precautions.

Simon somehow managed to fly under the radar for some time, but this first set of accusations is already more then enough to close the business, impound all accounts and worst case sentence the manager to up to 2 years of jail time.

So it is certainly Simon's business practice and neglect that caused all this, and he is responsible for running bitcoin24 in an illegal way.

Blaming authorities or banks for closing down illegal business is a tad naive, sorry.

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I wonder about this seizure of hardware... surely the hardware was installed in a secure area at a data centre, not located in his own business office? Couldn't be that easy to simply seize?

At least last year he seems to have had his stuff on virtual machinse on rented servers somewhere (evident from his him asking in a forum how to restore deleted files on such a virtual server, as he lost a bitcoin wallet to wiping one server without having backups last year).

How exactly everything is set up and whether it requires physical access to one of his own physical computers (for keys or whatever), no idea. Naively I would agree and say shouldn't be needed and thus hard to seize.

On the other hand if he allows any withdrawals, thats continued support of money laundering, as he still cannot identify customers of course. That would remove the "unwitting" from the accusation making it infinitely more serious.