$7.5B In Stolen Bitcoin from 2016 Bitfinex Hack has just been moved(twitter.com)
twitter.com
$7.5B In Stolen Bitcoin from 2016 Bitfinex Hack has just been moved
https://twitter.com/CryptoWhale/status/1382392286819057668
280 comments
> if you receive BTC from one of these addresses as payment for something, do you refuse it?
You cannot refuse a BTC transaction. You could return it in a subsequent transaction, and pay the transaction fee, but I would imagine your address would be forever tainted by a number of illicit address/transaction tracking algorithms.
You cannot refuse a BTC transaction. You could return it in a subsequent transaction, and pay the transaction fee, but I would imagine your address would be forever tainted by a number of illicit address/transaction tracking algorithms.
That's an interesting angle to cash out... just start sending to 1,000s of addresses - who's to say which addresses are owned by the criminals, and which are owned by other people?
They'd get less than cashing it all out themselves obviously, but it would take forever to unravel what actually happened (if possible ever)
They'd get less than cashing it all out themselves obviously, but it would take forever to unravel what actually happened (if possible ever)
You could use also do that to embarrass/blackmail politicians or other prominent people. Imagine the threat "You either do what I want or I'll send you 1 million dollars" :)
What politicians accept Bitcoin as donations?
I think whole bunch of them do, Eric Swalwell accepts like 6 of them.
Wasn't that the one associated with a known CCP spy? https://www.axios.com/china-spy-california-politicians-9d2df...
More like "targeted by."
How else do you suppose they pay for their crimes?
Just tell them you're willing to donate them more than $5K and they'll figure it out.
Politicians are surprisingly cheap, as I've learned over the years from various reports.
Politicians are surprisingly cheap, as I've learned over the years from various reports.
How about universal basic income? Send some to everyone monthly. Would be curious the social implications of elicit money used as a welfare utility.
Yes, look forward to my $20 check that lasts one month.
I'd take that over still not receiving a stimulus check despite needing them more than ever.
Yea, my comment was more that $7.5B is $1 per person in the world or $20 for people in the US. Nowhere near something to be considered UBI. I hope you get the assistance you need.
Okay so I was actually thinking based on wallet counts (64 million currently) I agree it still doesn’t go too far
You don't need to start with an entire country, start with a city or state. Then steal more.
Not sure how you'd target a geographical area though.
Not sure how you'd target a geographical area though.
Don't worry, the printer is just out of ink. They're coming soon!
I know of plenty of people who consider taxes "elicit money", and we spend that money EVERYWHERE
Send it to 7,500 random wallets, including your own, and you can keep as many millions as wallets you have. Most people will keep the money, making them indistinguishable from your own wallets.
IANAL, but if crime prescription is possible, you could transfer to 5,000 wallets and keep the rest for your pirate-themed retirement island.
IANAL, but if crime prescription is possible, you could transfer to 5,000 wallets and keep the rest for your pirate-themed retirement island.
We’ve done that on a number of projects
Basically communities freak out when they think founder/team is selling any of the project’s tokens no matter how long its been or whether what the stated vesting conditions were
So we just bundle it in monthly distributions in multisend transactions to new addressses, some of the transactions are monthly vesting payments to marketers, some of the payments are to ourselves. Not possible to distinguish.
(This is also possible because communities also demand that issuers put funds and the tokens into liquidity pools, which is not always compatible with having a ton of other tokens just sitting in separate vesting treasuries. So liquidity pool shares are vesting and they can be sent anywhere and unbundled)
Basically communities freak out when they think founder/team is selling any of the project’s tokens no matter how long its been or whether what the stated vesting conditions were
So we just bundle it in monthly distributions in multisend transactions to new addressses, some of the transactions are monthly vesting payments to marketers, some of the payments are to ourselves. Not possible to distinguish.
(This is also possible because communities also demand that issuers put funds and the tokens into liquidity pools, which is not always compatible with having a ton of other tokens just sitting in separate vesting treasuries. So liquidity pool shares are vesting and they can be sent anywhere and unbundled)
I had the same idea, and it would be funny, but investigators wouldn't have to unravel the whole thing.
They'd just have to look at anyone unwise enough to use the money instead of turning it over to authorities (or abandoning the wallet).
They'd just have to look at anyone unwise enough to use the money instead of turning it over to authorities (or abandoning the wallet).
Most people wouldnt actually know that the money is illicit
Almost nobody would turn to authorities, people just think it's their lucky day and spend it, so they would target a lot of innocent people.
What'd you really do is just send it to a liquidity smart contract and use a function parameter to send it to different wallet(s). These pools pay out big money to alot of different wallets, you'd never be able to track it out the other side.
They could just setup their own Bitcoin tumbler
Tumbling on bitcoin doesn't work like it used to a few years ago. There are now multiple companies dedicated to blockchain tracking and analysis. All coins coming from tumblers are flagged. It's possible because the bitcoin blockchain is public and every balance and transaction is visible to the whole world.
Many exchanges refuse to accept coins that have passed through a tumbler. If you attempt to deposit these coins, the exchange will refuse to credit you unless you provide copious amounts of documentation. Currently they do not seize your coins but will force you to withdraw them.
Some exchanges are even going through users' deposit histories and are retroactively flagging deposits from coin mixing services: https://twitter.com/kristapsk/status/1374336620158140419
This is why many criminals are moving away from Bitcoin into Monero, which has anonymized transactions and doesn't suffer from the chain analysis problem.
Many exchanges refuse to accept coins that have passed through a tumbler. If you attempt to deposit these coins, the exchange will refuse to credit you unless you provide copious amounts of documentation. Currently they do not seize your coins but will force you to withdraw them.
Some exchanges are even going through users' deposit histories and are retroactively flagging deposits from coin mixing services: https://twitter.com/kristapsk/status/1374336620158140419
This is why many criminals are moving away from Bitcoin into Monero, which has anonymized transactions and doesn't suffer from the chain analysis problem.
So if someone buys a stick of gum from me after taking rent money from a tainted BTC address, I get flagged?
It only takes a few exchanges refusing to flag coins and the whole flagging system fails.
The bad money gets mixed with the good in the exchanges wallet, and sent to random people...
The bad money gets mixed with the good in the exchanges wallet, and sent to random people...
> a few exchanges refusing to flag coins
they may not have a choice if the gov't regulation forces them to flag it.
they may not have a choice if the gov't regulation forces them to flag it.
Currency of the future
If tumblers are a problem, why wouldnt monero be? You could view it just as a BTC that has built-in tumbler. I dont really follow this logic of Monero shills. Exchanges can ban both tumblers AND monero.
So can you poison someones wallet if you send them 1 satoshi that’s from a tumbler?
Came here to ask about this… Does anyone know whether this has happened before?
This is essentially what a tumbler does
The suggestion is a philanthropic variation of a tumbler.
Pretty sure what they mean is 'do you refuse it as payment?' - i.e. should you provide the thing someone is paying for or send the payment back and ask for untainted coins?
> […] but I would imagine your address would be forever tainted by a number of illicit address/transaction tracking algorithms.
Not if those algorithm are any good.
In Bitcoin, you can’t taint an address just by sending funds to it, since all transactions to the same address create separate “outputs” that must be redeemed separately.
Not if those algorithm are any good.
In Bitcoin, you can’t taint an address just by sending funds to it, since all transactions to the same address create separate “outputs” that must be redeemed separately.
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If I send you a stolen iPod in the mail, do I forever taint your home address? Are you forced to accept it? No, of course not. You can return it to the police, throw it out, or return it to the sender. If you keep it and use it, then it becomes your problem. The same is true for Bitcoin. You can refuse any transaction output. You are not your address.
Edit: This post is being downvoted by people who don't want it to be true. Sorry folks, it is. Bitcoin is UTXO-based, and every output sent to your address is a unique piece of mail. If you don't like that, use an account-based system where it all gets mixed together.
Edit: This post is being downvoted by people who don't want it to be true. Sorry folks, it is. Bitcoin is UTXO-based, and every output sent to your address is a unique piece of mail. If you don't like that, use an account-based system where it all gets mixed together.
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Coinbase suspended my merchant account from receiving funds about 5 years ago without warning. I was receiving funds as any merchant would, with the occasional payout to bank. I had no idea why they suspending receiving, and as some already know, their support was not very supportive. The only reason I could think of is possibly receiving tainted funds?
You can definitely do this with bills... You realize when a bank gets robbed the serial numbers are tracked and confiscated when they show up, and often lead to the theives
I saw something like this happen when I was younger (this was pre-web, in the 80s or 90s, so I unfortunately haven't been able to find any online references to it): there was a big bank heist, and the stolen banknotes were new notes which hadn't been put into circulation yet. The ranges of their serial numbers were widely distributed by the press, and for instance cashiers at supermarkets were supposed to verify whether the serial numbers of the banknotes they received matched any of these ranges (since the banknotes hadn't been put into circulation, they were treated similar to counterfeit money: they officially didn't have any value). The country's currency has changed since then (it was the hyperinflation times), so that whole banknote series is no longer valid nowadays.
If someone pays you in cash, do you really look up the serial numbers of all the bills you receive?
Actually, some people do.
There are tools like EuroBillTracker (https://en.eurobilltracker.com/) where you can enter the serial number of bills that you received and can watch them travel around the world. If someone else tracks them as well, that is.
I entered 31 serial numbers over the last 15 years. Those haven't been seen again so far. I guess it's not the right kind of game for me... :)
There are tools like EuroBillTracker (https://en.eurobilltracker.com/) where you can enter the serial number of bills that you received and can watch them travel around the world. If someone else tracks them as well, that is.
I entered 31 serial numbers over the last 15 years. Those haven't been seen again so far. I guess it's not the right kind of game for me... :)
I played with Where's George? for a few minutes, then got bored. None of these things seem to have enough adoption to make it interesting.
If there were money in it, someone would throw OCR at the problem. Say, attach prizes to certain bills, or finding certain patterns of bills (say, two bills whose serial numbers are mathematically related a certain way).
If there were money in it, someone would throw OCR at the problem. Say, attach prizes to certain bills, or finding certain patterns of bills (say, two bills whose serial numbers are mathematically related a certain way).
If a government wanted to encourage spending, they could turn the lottery inside out by offering payouts on cash being spent by everyone. You take a picture of your money and if the serial number is today's lucky winner you get $1MM. Though maybe that would encourage hoarding instead? Cobra effect perhaps?
Euro coin tracking was a bit popular in the early days of the euro, as it showed how coins moved around Europe (you can’t identify individual coins, but each country has its own coins that can be used throughout the euro zone. Spanish and Italian coins move to Germany and the Benelux faster in summer than in winter, for example)
You can still play that game with new coins, but it’s less f visible now, as most coins are old and those already are well dispersed throughout the euro zone (and, of course, more and more people pay with a card)
You can still play that game with new coins, but it’s less f visible now, as most coins are old and those already are well dispersed throughout the euro zone (and, of course, more and more people pay with a card)
No, but eventually they end up at the bank or similar and tracing process starts. One banknote probably won't tell you much, but if thieves are spending constantly you will find many, and you only need to get lucky once.
This isn't so far fetched. Cash registers already have Internet connections and can be outfitted with cameras to record all bills going in, except maybe those inserted in a stack. And ATMs might already be recording serial numbers of dispensed bills. Essentially they might/could do with currency what they do with license plates, which is track where everything goes and at what times.
Like 0 cash registers I have ever seen employ this.
Truth is, most cash these days probably only has one or two transactions between bank withdrawal and bank deposit.
If the banks track serial numbers, they could probably build a fairly complete picture of what kind of transactions are going on. With the vast amount of data, you could probably fill in a lot of the gaps.
If the banks track serial numbers, they could probably build a fairly complete picture of what kind of transactions are going on. With the vast amount of data, you could probably fill in a lot of the gaps.
It's a feature on some money counters, which seem like something banks might use at the end of the day to check the balances in the drawers.
ATMs might already be recording serial numbers
Say John gets bills from the ATM then pays dealer Dylan for weed. Dylan then buys a beer at a bar.
If Dylan gets convicted, and banks collaborate with the police, then John gets subjected to - at least - parallel reconstruction.
Plausible deniability wrecks that entire thesis (someone existing between John and Dylan such as a gas station)
Gas station isn't someone. It's an endpoint, as the bar in my story. If the gas station cashier takes from the register to get a bier, you're right. If not, my thesis still holds I think.
What if I pay with 100 Euro bank note and get back "tainted" 50 Euro note and then pay in bar? Bank notes are not just collected and sent back to bank.
You're right but the higher the denomination, the smaller the chance it'll serve as change.
Doesn’t matter, plausible deniability means a reasonable person might spend it. Without knowing who’s next, you may have circumstantial evidence but that’s not enough to hold up in court.
You don’t punish someone based on chance.
You don’t punish someone based on chance.
No, but I might deposit that money in the bank, and the bank could check those serial numbers.
The kidnapper of https://en.wikipedia.org/wiki/Gerrit_Jan_Heijn was caught because a teller recognized a bill number that he had spent
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I don’t think the “confiscate” part is categorically true.
If the police arrest suspected criminals and find money that can be traced back to criminal activity, they’ll confiscate it (permanently only after a trial). “Traced back” typically need not even involve checking serial numbers. If you’ve a lot of cash, but no regular job that explains how you could have that much money or why you would keep it in cash, that’s enough to confiscate it.
If, on the other hand, they find John Doe in possession of a banknote that was paid out in a ransom or stolen from a bank, and cannot link John Doe to any crime, John Doe can keep the money (they’ll ask him whether he knows where he got it and may be able to force him to exchange it for untainted money, but that’s it)
(Counterfeit money is different. If the police finds you in possession of it they’ll confiscate it, even if they know that you’re a victim)
If the police arrest suspected criminals and find money that can be traced back to criminal activity, they’ll confiscate it (permanently only after a trial). “Traced back” typically need not even involve checking serial numbers. If you’ve a lot of cash, but no regular job that explains how you could have that much money or why you would keep it in cash, that’s enough to confiscate it.
If, on the other hand, they find John Doe in possession of a banknote that was paid out in a ransom or stolen from a bank, and cannot link John Doe to any crime, John Doe can keep the money (they’ll ask him whether he knows where he got it and may be able to force him to exchange it for untainted money, but that’s it)
(Counterfeit money is different. If the police finds you in possession of it they’ll confiscate it, even if they know that you’re a victim)
Unfortunately due to the abuse of civil forfeiture the "permanently only after a trial" part isn't true these days.
Which is why thieves prefer used notes.
Monero tackles this problem. Coins are fungible and transactions are private.
https://www.getmonero.org/resources/moneropedia/fungibility....
https://www.getmonero.org/resources/moneropedia/fungibility....
That both does, and doesn't solve this problem. If someone pays for services with stolen assets the ideal scenario is that the criminal is apprehended, the service provider doesn't lose money, and the funds can be returned to their rightful owner.
Monero protects the service provider, but doesn't solve the other problems.
Monero protects the service provider, but doesn't solve the other problems.
It's a curious question for the value proposition of blockchain denominated currencies.
There is a real possibility that in the future, all stolen assets will eventually be recovered and returned to their owners. There needn't be any limit to recovery given a universal, traceable, and non-fungible transaction log. Pretty soon payment processors/recipients would start maintaining blacklists of stolen coins which they refuse to transact in.
The value proposition of theft/fraud may be significantly curtailed in such a world.
There is a real possibility that in the future, all stolen assets will eventually be recovered and returned to their owners. There needn't be any limit to recovery given a universal, traceable, and non-fungible transaction log. Pretty soon payment processors/recipients would start maintaining blacklists of stolen coins which they refuse to transact in.
The value proposition of theft/fraud may be significantly curtailed in such a world.
That won't handle the case where some coins are stolen and used before they are marked as "bad". Some merchant will be out of luck once the transaction is reversed. Really that is no better than what we already have from credit card payment networks.
Also interesting: since the total number of Bitcoins is fixed, as more and more coins are used for crime and get blacklisted, the value of remaining coins will become inflated. Given a long enough timeline, there will be too few coins for the currency to remain useful.
(Though to be fair, people simply losing the private keys to their wallet also has the same effect. Not sure which phenomenon would, over time, result in more coin losses.)
(Though to be fair, people simply losing the private keys to their wallet also has the same effect. Not sure which phenomenon would, over time, result in more coin losses.)
Bitcoin is already not such a useful currency (although it’s currently a very useful speculative asset) due to the fact that it has been maxed out at a real world daily average of ~3.5tx/s for years AFAICT (half the often quote 7tps) as its blocksize is hard-capped (and if history has shown, will never be able to be increased). There are also minimums for value that are effectively spendable based on BTC/byte transaction fees, UTXOs (the set continues to grow dramatically) and price where a larger and larger percentage of the coinbase becomes un-economic to spend as price goes up.
Just as a point of reference, the current median tx price in USD is ~$12, next block confirmations currently cost in excess of 100+ satoshis/byte and the median tx size is ~250 bytes.
Just as a point of reference, the current median tx price in USD is ~$12, next block confirmations currently cost in excess of 100+ satoshis/byte and the median tx size is ~250 bytes.
Not if the person behind the crime was caught - then their coins could be un-flagged.
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I would actually like if there was a place where people could hack each other without repercussions. A fair game where all that matters is technical skill, not laws.
If your security is bad or you want the state to prosecute hackers in your defense, you can keep using traditional banks, Bitcoin, etc. If you want complete freedom and you trust your security, use Monero.
If your security is bad or you want the state to prosecute hackers in your defense, you can keep using traditional banks, Bitcoin, etc. If you want complete freedom and you trust your security, use Monero.
That's the price we have to pay in order to stop global surveillance. There should be limits to what authorities can know and do. It shouldn't be possible for them to analyze every transaction that ever occurred.
I work at a distributed exchange and we have a blacklist. if funds are sent in from an address that's blacklisted we hold it and don't send them the other half. I don't know what the business does with those coins after that but there is a compliance team so I assume it's properly handled.
The mere fact a distributed exchange has a central compliance team tells me it isn't very distributed...
Sorry that should have been "non-custodial" not distributed.
Whats the point of a distributed exchange if you can just deny any exchanges at will? Doesn’t that defeat the core idea of an distributed exchange?
What stops them from just sending it to an intermediate address first?
Nothing, and I'm curious about how any source addresses are traced backwards before permitting a transaction.
Is everyone expected to know the addresses by heart? Does software flag them? If so, where does the list of tainted addresses come from?
Total outsider here, asking honestly.
Total outsider here, asking honestly.
exchanges keep lists of stolen coins and probably use taint analysis https://arxiv.org/pdf/1906.05754.pdf
There are a number of ways, you can use a non-custodial bridge like RenVM and receive renBTC which can be used as collateral or just traded in plain sight for something more liquid
Like all blockchain analysis, following the conversion process always assumes that all addresses involved are tainted forever because its also assuming it is under custody of the thief, so if you really want to play along further and think that this is both true and that the thief needs to hide then the thief can just drop all the converted assets into Tornado.cash and take them out later.
Even if you think that cashing out Tornado.cash is hard, they can always just pump the price of some other token that they already bought with clean funds, and those cleans funds just become highly-profitable-trader-clean-funds. While the addresses with tornado.cash sourced funds are just bagholding whatever token they bought.
Like all blockchain analysis, following the conversion process always assumes that all addresses involved are tainted forever because its also assuming it is under custody of the thief, so if you really want to play along further and think that this is both true and that the thief needs to hide then the thief can just drop all the converted assets into Tornado.cash and take them out later.
Even if you think that cashing out Tornado.cash is hard, they can always just pump the price of some other token that they already bought with clean funds, and those cleans funds just become highly-profitable-trader-clean-funds. While the addresses with tornado.cash sourced funds are just bagholding whatever token they bought.
Can one even refuse it? If someone just sends tainted coin to my address, am I screwed?
Not an answer to your question but BTC does not really have wallets. Someone just signs a number of BTCs with his private key and your public key so the only way to sign it again is with your private key. This is essentially how it "moves" to "someone".
Some other DTLs (blockchains) actually have wallets/accounts with properties where you can disable incoming funds/add a name/change the password and such stuff.
Unlike Ethereum, Bitcoin addresses are just a hash of a public key. The sent Bitcoins are unspent outputs that you can selectively (depends on the wallet) decide not to use.
iirc, a number of wallets allow you to specify which unspent TX outputs you use.
So if you got tainted coin sent to your address, you could avoid using that UTXO in future TXs.
That might protect you from some scrutiny.
So if you got tainted coin sent to your address, you could avoid using that UTXO in future TXs.
That might protect you from some scrutiny.
That would work. But then there's also the question if the received transaction counts as taxable income in the jurisdiction of the receiver. If that's the case and if they received a very significant amount they would be forced to sell some of the coins so that they can pay the tax for them.
> a number of wallets allow you to specify which unspent TX outputs you use.
Yep, this is referred to as “coin control”
Yep, this is referred to as “coin control”
What's wrong with simply returning it? Any "tainted coin tracker" could easily build in a mechanism for detecting that
The simplest answer is that returning it isn't free.
Also there is a good question is there some limit or ratio of tainted coins that would be considered non incriminating. Or if there isn't would single satoshi taint all coins? If there were wouldn't dilution of funds be possible? That is wash them by sending to wallets with enough funds...
Ok so use it to pay the fee, returning the rest.
You just washed part of the BTCs which is now owned by the miner.
That's assuming a BTC miner even agrees to process the transaction. Why would a BTC miner want to deal with the headache of tainted bitcoins? It's such a problem that Marathon Digital Holdings, a major bitcoin miner, has stated they will refuse to process transactions from tainted addresses. In the near future, I expect more mining pools to do the same.
If they were send to you, someone does process them.
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And why would currency users even bother with it? If I receive a payment for something, I don't feel the need to pretend to be the police.
Why would you give money to a criminal?
Would you return stolen goods to the thief? How about return it to the owner/authorities. May not be simple but certainly better than sending it back. If all else fail there are black hole addresses to forever lock the BTCs.
Every so often a moron shows up trying to sell the idea of colored coins... it is almost as if they've never heard of "fungibility".
what is tracked is outputs and inputs, not addresses. addresses are derived from a public key or a script.
when a block is mined, an output is created, outputs can only be spent once. a bitcoin transaction is just a list of existing outputs (inputs) and new outputs to create (outputs). each output is created with a lock script, to spend the output you must provide the unlock script which normally contains at least a signature and a public key
returning the output that corresponds to the unwanted transaction should do
when a block is mined, an output is created, outputs can only be spent once. a bitcoin transaction is just a list of existing outputs (inputs) and new outputs to create (outputs). each output is created with a lock script, to spend the output you must provide the unlock script which normally contains at least a signature and a public key
returning the output that corresponds to the unwanted transaction should do
Would you pay the transaction fee from the returned funds, washing a fraction of it through mining? Or pay for it out of your own utxo, potentially leading to a griefing attack?
That’s correct and several exchanges will freeze funds when they have a “tainted history”. Thus, tokens on open ledger DLTs are not fungible at all.
Cash is more fungible, yet you can also link serial numbers on bills back to ransom payments.
In a similar fashion, if you, even unknowingly, pay with counterfeit cash, you won’t get reimbursed for the face value, if it gets detected.
Back to crypto, Monero addresses the aforementioned issues through stealth addresses, ring signatures and ringCTs, thus fungibility of the token is higher.
Cash is more fungible, yet you can also link serial numbers on bills back to ransom payments.
In a similar fashion, if you, even unknowingly, pay with counterfeit cash, you won’t get reimbursed for the face value, if it gets detected.
Back to crypto, Monero addresses the aforementioned issues through stealth addresses, ring signatures and ringCTs, thus fungibility of the token is higher.
why would I? I mean we still use dollars even though a lot of them are used to buy heroin and hookers
Knowingly receiving then spending stolen money or property is a crime in many jurisdictions. In many cases it may be phrased like "or ought to have known" so wilful ignorance isn't a defence.
Even unknowingly receiving stolen money or property leaves you on the hook, potentially. If the rightful owner tracks it to you they can go "that's mine!" and the courts will order you to give it to them. The loss you incur here is yours; the law treats it as an incentive to be diligent and to not deal in stolen goods.
You can of course then try to recover the value you are owed from the person who sent you the stolen goods/money, if you want/can. And they from whoever sold them the stolen goods/money. And so on, all the way back to the original thief. The whole chain is tainted. (Pun intended, maybe.)
Even unknowingly receiving stolen money or property leaves you on the hook, potentially. If the rightful owner tracks it to you they can go "that's mine!" and the courts will order you to give it to them. The loss you incur here is yours; the law treats it as an incentive to be diligent and to not deal in stolen goods.
You can of course then try to recover the value you are owed from the person who sent you the stolen goods/money, if you want/can. And they from whoever sold them the stolen goods/money. And so on, all the way back to the original thief. The whole chain is tainted. (Pun intended, maybe.)
> If the rightful owner tracks it to you they can go "that's mine!" and the courts will order you to give it to them.
I don't believe that's true, though this is based on just stuff I've heard, not on any data I can present. In general I hear that if someone steals something, and then sells it to you, and you don't know (and have no reason to believe) it was stolen, not only are you not legally liable, but you cannot be forced to return the property to the original owner.
If this wasn't the case, the act of buying anything through a private sale would in general be pretty risky.
This goes pretty far sometimes: I remember a somewhat bizarre case where someone sold some land to someone, and lied to the buyer about where the property line was. The new owner built on what was technically someone else's land, but later the "true" owner lost in court, and the owner who built on it was given ownership rights, and I don't believe was required to compensate the "true" owner. (I imagine the "true" owner had a strong case against the lying seller, though.)
I don't believe that's true, though this is based on just stuff I've heard, not on any data I can present. In general I hear that if someone steals something, and then sells it to you, and you don't know (and have no reason to believe) it was stolen, not only are you not legally liable, but you cannot be forced to return the property to the original owner.
If this wasn't the case, the act of buying anything through a private sale would in general be pretty risky.
This goes pretty far sometimes: I remember a somewhat bizarre case where someone sold some land to someone, and lied to the buyer about where the property line was. The new owner built on what was technically someone else's land, but later the "true" owner lost in court, and the owner who built on it was given ownership rights, and I don't believe was required to compensate the "true" owner. (I imagine the "true" owner had a strong case against the lying seller, though.)
At least in the United States, I don't believe this is true. Years ago I bought a laptop for a too-good-to-be-true price on Craigslist. As it turns out, the laptop I purchased had some kind of hardware lojack and I had a uniformed police officer and detective show up at my door, and later found myself responding to their questions at the station. When all was said and done, I was without the laptop and receiving $50/week until the full amount of $700 was received from the thief.
> The new owner built on what was technically someone else's land, but later the "true" owner lost in court, and the owner who built on it was given ownership rights, and I don't believe was required to compensate the "true" owner.
Sounds like a case of adverse possession, which is a special feature of real property law not shared with personal property.
So, while that story is plausible, its not something you should generalize to non-real-estate law.
Sounds like a case of adverse possession, which is a special feature of real property law not shared with personal property.
So, while that story is plausible, its not something you should generalize to non-real-estate law.
But in reality, nobody does - and only in some peculiar cases do payments made to a merchant gets confiscated like that (and they usually have no recourse).
AFAIK exchanges will not accept certain outputs, this is probably based on taint analysis. I believe the FIFO method [1] is the most accurate and probably used by exchanges
[1] https://arxiv.org/pdf/1906.05754.pdf
[1] https://arxiv.org/pdf/1906.05754.pdf
FIFO would mean that non-tainted funds added after tainted are also locked.
Isn’t that what “marked bills” are? Isn’t that why kidnappers ask for unmarked money so it can’t be traced back to the theft?
There are many stories of bills being marked in specific ways to to identify their provenance.
There are many stories of bills being marked in specific ways to to identify their provenance.
[deleted]
> if you receive BTC from one of these addresses as payment for something, do you refuse it?
It's a crime to spend money you do not own. Like if you would find 500k in paper bills in your car. There is no source of funds it would be your legal asset. You hand it over to police.
It's a crime to spend money you do not own. Like if you would find 500k in paper bills in your car. There is no source of funds it would be your legal asset. You hand it over to police.
Finding money and using miney that your know is stolen are totally different situations.
'finding' is ofcourse situational, but abandoned property can be 'found' and claimed
'finding' is ofcourse situational, but abandoned property can be 'found' and claimed
It is not. If you find something that does bot belong to you it does not become your property. Only in special circumstances you can claim it as your own.
You see. This is what bitcoin so fascinating... it is absolutely impossible to hide a transaction.
So imagine the field day the irs would have with this if everyone used it. They basically would be able to send bills to owners of wallets. And anyone ever caught working with an undesirable would be able to have their funds more or less locked up.
So now, we all watch as billions of stolen money moves and we know the moment it gets converted to anything real, the owners will be caught. However in the future I could easily see a government watch money that some undesired element has move and no one will want it because the moment they get it they are connected to an undesirable and their wallet becomes tainted.
So imagine the field day the irs would have with this if everyone used it. They basically would be able to send bills to owners of wallets. And anyone ever caught working with an undesirable would be able to have their funds more or less locked up.
So now, we all watch as billions of stolen money moves and we know the moment it gets converted to anything real, the owners will be caught. However in the future I could easily see a government watch money that some undesired element has move and no one will want it because the moment they get it they are connected to an undesirable and their wallet becomes tainted.
This fails to account for the fact that IRS currently (and maybe this changes in the future) has a hard time doing serious audits on any significant amount of wealthy people; and that the agency has pretty much been gutted over the years.
[0] https://www.propublica.org/article/how-the-irs-was-gutted
[1] https://www.propublica.org/series/gutting-the-irs
[2] https://www.gq.com/story/no-irs-audits-for-the-rich
[0] https://www.propublica.org/article/how-the-irs-was-gutted
[1] https://www.propublica.org/series/gutting-the-irs
[2] https://www.gq.com/story/no-irs-audits-for-the-rich
all it takes is for one president in 2030s to create a new branch of gov that pays Google style salaries. would attract the best and brightest to write some powerful tools for all that, no?
That’s the big lie. You just have to pay enough and have a process.
I’ve done consulting work for tax agencies. They are full of smart people and are very good, as most government agencies are, at implementing and consistently delivering processes.
The problem at the IRS is that a group of people with the ability to influence the purse strings have signed pledges and dedicated careers to make the IRS as ineffective as possible. I have a former associate who is a specialist in a few arcane areas of tax law and has the ability to basically look at the books of any company and figure it out in a day or two. He left because systematic cuts meant that he was one of a half dozen specialists in the country (there were 200+ when he started), and ended up traveling all across the country to testify at trials as an expert.
Look at the military as an example of how any government agency works. Billions are spent on weapons systems development with the best and brightest minds. In the field, the applied work is done by 19 year old kids, roughly sorted into an occupational category by IQ.
I’ve done consulting work for tax agencies. They are full of smart people and are very good, as most government agencies are, at implementing and consistently delivering processes.
The problem at the IRS is that a group of people with the ability to influence the purse strings have signed pledges and dedicated careers to make the IRS as ineffective as possible. I have a former associate who is a specialist in a few arcane areas of tax law and has the ability to basically look at the books of any company and figure it out in a day or two. He left because systematic cuts meant that he was one of a half dozen specialists in the country (there were 200+ when he started), and ended up traveling all across the country to testify at trials as an expert.
Look at the military as an example of how any government agency works. Billions are spent on weapons systems development with the best and brightest minds. In the field, the applied work is done by 19 year old kids, roughly sorted into an occupational category by IQ.
Obama was that forward thinking, charismatic, enlightened leader that people wanted to work for. The White House Digital Service was by any metric a resounding success. But the pay did suck.
The problem with the government paying "Google salaries" is who gets them? Is an IRS auditor really worthy of half a million a year in comp? What about the DEA agent deep under cover and risking his life, much more deserving... right?
So you create a new branch of the government where keyboard warriors bang out solutions to government problems. Why is one of these hot-shots making what an entire department of inspectors is paid at the USDA? The resentment from other agencies will be a hard barrier to overcome. They also have no incentive to help your new Rockstar Agency to get access to all the data they need so they can put government employees out of work.
Not to mention, is it really beneficial to the tax payer to try and compete with tech companies? If FAANG companies start to suffer a talent drain, they will just re-up and double whatever the government offers.
The problem with the government paying "Google salaries" is who gets them? Is an IRS auditor really worthy of half a million a year in comp? What about the DEA agent deep under cover and risking his life, much more deserving... right?
So you create a new branch of the government where keyboard warriors bang out solutions to government problems. Why is one of these hot-shots making what an entire department of inspectors is paid at the USDA? The resentment from other agencies will be a hard barrier to overcome. They also have no incentive to help your new Rockstar Agency to get access to all the data they need so they can put government employees out of work.
Not to mention, is it really beneficial to the tax payer to try and compete with tech companies? If FAANG companies start to suffer a talent drain, they will just re-up and double whatever the government offers.
This makes me wonder, was pay competitive for rocket scientists during the space race, or was the mission so compelling that nobody cared if they were making less than they might have at a defense contractor?
A friend of mine is an electrician, an in-demand skilled job. He can make +/- 10% working for the government directly, at Lawrence Livermore, or in the private sector. Each has tradeoffs like how interesting the work is or the hours, but in the end the government isn't really less competitive.
Now imagine Facebook steps in and wants to hire all the electricians and is willing to pay $750k/yr. Obviously the entire system becomes fucked and the government (or even "normal" businesses) won't be able to find electricians.
Don't get me wrong... I like my tech salary. But inserting a player into any market or economy with effectively unlimited resources breaks it.
Now imagine Facebook steps in and wants to hire all the electricians and is willing to pay $750k/yr. Obviously the entire system becomes fucked and the government (or even "normal" businesses) won't be able to find electricians.
Don't get me wrong... I like my tech salary. But inserting a player into any market or economy with effectively unlimited resources breaks it.
If Facebook could create a local monopoly or competitive advantage to pay electricians $1M/yr, they would to deny the skills to their competitors.
I found this trying to Google around for NASA scientists pay during the space race. Turns out maybe money wasn’t the biggest factor involved.
tldr; Korolev, the lead Soviet engineer during the space race died in the middle of it from colon cancer and they never recovered.
https://www.forbes.com/sites/startswithabang/2019/07/11/this...
tldr; Korolev, the lead Soviet engineer during the space race died in the middle of it from colon cancer and they never recovered.
https://www.forbes.com/sites/startswithabang/2019/07/11/this...
IRS agents are easy to calculate pay.
Base living wage ($70-$90k)
+ 1-5% of each amount recovered
Incentivize pursuing the biggest evaders, and the problem may solve itself.
Base living wage ($70-$90k)
+ 1-5% of each amount recovered
Incentivize pursuing the biggest evaders, and the problem may solve itself.
As other commissioned jobs will show you, like in real estate, that’s only an incentive to close high volume easy deals, not move mountains to chase hard deals.
Your idea would likely just spur a movement to throw the book at normal working people to extract the most from easy targets, like self-employed misfiles.
Your idea would likely just spur a movement to throw the book at normal working people to extract the most from easy targets, like self-employed misfiles.
You could address that to have the benefit only usable once per year.
Admitted, without much data to back myself up, I think I disagree. Real Estate has a tier of broker that handles the huge deals too.
Right now the IRS are spending too much time going after the low hanging fruit, which is hurting the little guys. The department has been gutted and understaffed, so they are trying to hit the easy less sophisticated targets.
A few $1 Million settlements could more than double their salary for the year. Even if the bonus was split between a team, a few whales would be a boon.
Right now the IRS are spending too much time going after the low hanging fruit, which is hurting the little guys. The department has been gutted and understaffed, so they are trying to hit the easy less sophisticated targets.
A few $1 Million settlements could more than double their salary for the year. Even if the bonus was split between a team, a few whales would be a boon.
you and I both know that could never happen, it would get contracted out to Oracle or something
I wonder how many bitcoin people understand the history of banking regulations. Banks do not want to be accessory to crimes. They make plenty of money legally. So when the government says we know that you helped someone steal billions of dollars so we are going to shut you down, the banks will quickly offer to track and report and block people.
Banks are the most law breaking entities in the United States. They constantly have to make enormous settlements for the insane number of laws they break. These are just the settlements for Bank of America:
https://www.fool.com/investing/general/2014/10/01/the-comple...
A better summary wouldn't be "they make plenty of money legally." It would be they make plenty of money illegally after paying the settlements.
https://www.fool.com/investing/general/2014/10/01/the-comple...
A better summary wouldn't be "they make plenty of money legally." It would be they make plenty of money illegally after paying the settlements.
None of these fines are about laundering money.
Also, showing these fines is a long way from "the most law breaking entities".
I do believe Wells Fargo got in trouble for helping launder money - and they spent a LOT of money to help fix it.
Also, showing these fines is a long way from "the most law breaking entities".
I do believe Wells Fargo got in trouble for helping launder money - and they spent a LOT of money to help fix it.
https://www.bloomberg.com/news/articles/2021-03-05/ubs-may-u...
https://www.theguardian.com/world/2011/apr/03/us-bank-mexico...
https://www.bbc.com/news/business-54597256
I could keep Googling but that should cover your complaints about laundering money.
https://www.theguardian.com/world/2011/apr/03/us-bank-mexico...
https://www.bbc.com/news/business-54597256
I could keep Googling but that should cover your complaints about laundering money.
Forgive my vagueness- I wasn't complaining that banks don't launder money - only that the original links didn't support that thesis. You have rectified that.
Do you also claim that banks are the biggest thieves?
Do you also claim that banks are the biggest thieves?
Biggest source of theft in the US is wage theft by employers.
Wait.. really? I'd love to dive into some of those numbers. I'm not saying you are wrong - otoh, I want to see if I can screen for behaviors that are preparatory.
HSBC then.
> HSBC Holdings Plc agreed to pay a record $1.92 billion in fines to U.S. authorities for allowing itself to be used to launder a river of drug money flowing out of Mexico and other banking lapses.
https://www.reuters.com/article/us-hsbc-probe-idUSBRE8BA05M2...
> HSBC Holdings Plc agreed to pay a record $1.92 billion in fines to U.S. authorities for allowing itself to be used to launder a river of drug money flowing out of Mexico and other banking lapses.
https://www.reuters.com/article/us-hsbc-probe-idUSBRE8BA05M2...
This is what I'm saying. The banks are more than happy to pay fines and add regulations to their practices because they don't want the government to shut them down. Coinbase will be no different. They make too much money to have any principals around standing up for a "Permissionless and Decentralized financial system"
What? Banks lobby heavily against regulation and their lobbyists write the regulations that do exist. They also often commit crimes themselves, are accessories to others, and work in grey areas. This seems well known.
Yeah but they break those laws for their own gain, not for you.
And when a corrupt federal agent asks a bank to delete records, because they’re allegedly part of a secret investigation, they also comply. This happened in the Silk Road case, but the immutability of the Bitcoin blockchain revealed their transactions.
Not sure how the scammers and thieves operate, but wouldn't they (likely) be laundering the money the same way they've always been doing it?
I.e, exploiting things like identity theft, countries and exchanges with little oversight, mules, gambling, etc.
I.e, exploiting things like identity theft, countries and exchanges with little oversight, mules, gambling, etc.
If they want to launder the funds all they have to do is used a decentralized exchange to convert the bitcoin into something like monero. Monero has an encrypted blockchain and a bunch of other anonymization features. So once you convert it to monero, poof, the funds simply disappear into the ether just like that without a trace. They can then convert it back into bitcoin if they want as well.
Wouldn’t they have some trouble getting it into an exchange to change it to XMR?
I assume that even if they moved some portion of it, say 10 BTC, to N different wallets, those transactions would be traceable to the exchange?
I’m not sure how XMR works but then the exchange would know at least which wallet the XMR was sent to.
I’m also not sure of the law surrounding a P2P transfer (IE receiving stolen property) but I’m guessing you might be SOL if you did a trade with them on a P2P platform as well...
Very interested if someone in the know would like to chime in
I assume that even if they moved some portion of it, say 10 BTC, to N different wallets, those transactions would be traceable to the exchange?
I’m not sure how XMR works but then the exchange would know at least which wallet the XMR was sent to.
I’m also not sure of the law surrounding a P2P transfer (IE receiving stolen property) but I’m guessing you might be SOL if you did a trade with them on a P2P platform as well...
Very interested if someone in the know would like to chime in
Defi exchanges can help with this. You essentially give your money to a smart contract and receive whichever other token you’d like.
But what exchange (in its right mind) would take those bitcoins? They're permanently tainted, and are likely very hard to convert into fiat currency, and therefore have, I expect, near zero value.
The exchange taking it wont be knowingly taking it, it is likely just a exchange that doesnt have system for detecting it.
There are thousands of btc exchanges all around the world. For sure there are some where they dont even know about bitfinex.
There are thousands of btc exchanges all around the world. For sure there are some where they dont even know about bitfinex.
All it takes is one country like Switzerland legalizing cryptocoin tumbling. You send your bitcoin to a single address along with millions of others, and it sends out to millions of addresses different values, with no traceability between the sender and receiver (if done correctly, such as batching all transactions over a month into a single event). It would be used by many legal entities also in order to hide their activity (rich people don't want their financial activity known to the public even if it's completely legal).
There's also wrapped bitcoins as an etf on etherum. Would they be able to detect or reject stolen bitcoins. Would you be able to trade the ETF coins instead without knowing?
I think this seems to be main reason crypto wasn't shut down by government when it was relatively easy to do ( now there are real players entering the fray ). There is already a small cottage industry based on selling insights from BTC nodes to FinCEN and banks ( but I do not know whether they are buying ).
I can think of a recent politician who’d take the money and spin it in such a way that half the country would believe it’s not a big deal. That every other politician would do it too if they had any balls... etc.
> the moment it gets converted to anything real, the owners will be caught
Is that how it works? Won't there be, say banking institutions that simply won't keep a record of who converted the bitcoin to money similar to how VPN providers are claiming to not log user's IP addresses?
Is that how it works? Won't there be, say banking institutions that simply won't keep a record of who converted the bitcoin to money similar to how VPN providers are claiming to not log user's IP addresses?
The US has regulations around banks knowing their customers and being responsible about things like this. For better or worse, those regulations have in many ways "leaked" into the regulations of other countries, because the US makes many of them mandatory in order to get access to the US financial system, which most countries see as essential.
Sure, there might be places where you could convert that Bitcoin into a local fiat currency, but then what? You have US$7.5B denominated in some random fiat currency that is likely mostly cut off from the "main" transactable currencies of the world. You'd have to find ways to slowly launder it and convert it into something else. Doable, I guess, and maybe worth the time and effort considering you can't do anything with the money otherwise, at least not without getting caught. But doing all that is risky as well... make a mistake and you could get caught.
Sure, there might be places where you could convert that Bitcoin into a local fiat currency, but then what? You have US$7.5B denominated in some random fiat currency that is likely mostly cut off from the "main" transactable currencies of the world. You'd have to find ways to slowly launder it and convert it into something else. Doable, I guess, and maybe worth the time and effort considering you can't do anything with the money otherwise, at least not without getting caught. But doing all that is risky as well... make a mistake and you could get caught.
I'm pretty sure there's no bank in the world that would be willing to make a transaction in the billions and not keep a record of it.
Ye of little faith. Google: HSBC cartel money.
HSBC knew what they were doing.... Because of their records.
“The confidential records and interviews with former employees reveal that compliance officers often filed SARs lacking even basic information about who owned companies banking with HSBC, the nature of their businesses, and where the money came from. Sometimes, records show, they asked branches for the information and were ignored or rebuffed.”
There’s records and then there’s “records”.
https://www.icij.org/investigations/fincen-files/hsbc-moved-...
There’s records and then there’s “records”.
https://www.icij.org/investigations/fincen-files/hsbc-moved-...
And the record of not having a proper record.
So we’re good? A record of a record (of a record of a record of a...) that doesn’t tell you who the money went to, doesn’t fill in that blank. It’s useful to ascertain fault at the bank (which in HSBC’s case didn’t result in much of consequence ).
So yes records (of sometimes dubious quality) are kept from a pedantic standpoint, but I understood GP to mean that this would prevent someone from laundering large sums through (large respectable) banks which is demonstrably not always the case.
Not only may these logs be questionable, but apparently the penalties, using the HSBC example, don’t seem to be a deterrent.
TLDR; banks having records doesn’t mean shit when you want to launder large sums of money.
So yes records (of sometimes dubious quality) are kept from a pedantic standpoint, but I understood GP to mean that this would prevent someone from laundering large sums through (large respectable) banks which is demonstrably not always the case.
Not only may these logs be questionable, but apparently the penalties, using the HSBC example, don’t seem to be a deterrent.
TLDR; banks having records doesn’t mean shit when you want to launder large sums of money.
You're probably right. I was thinking of the usual suspects when it comes to offshore accounts but also Switzerland with historically very strong privacy laws. But I'm know nothing about the banking industry so I could be totally off here.
Even Switzerland eventually bent to pressure from the United States:
https://www.wsj.com/articles/SB10000872396390443713704577601...
https://www.wsj.com/articles/SB10001424127887324412604578512...
https://www.wsj.com/articles/BL-MBB-23415
https://www.wsj.com/articles/SB10000872396390443713704577601...
https://www.wsj.com/articles/SB10001424127887324412604578512...
https://www.wsj.com/articles/BL-MBB-23415
that's about 750,000 times what banks have to track. I think anything over $10k must be tracked or groups of transactions that are linked that are at/over that.
Anything over $10k must be reported. Or anything that "looks suspicious". Or anything that "looks like it is trying to subvert the $10k rule"
> it is absolutely impossible to hide a transaction
What about tumblers?
What about tumblers?
They just shuffle coins around. Still possible to track. It's also obvious to everyone watching that the shuffling service was used. Exchanges have already started to refuse coins that passed through these services. They might as well be tainted.
The real solution is to drop bitcoin and use better technology. Monero looks like the best option right now. Private transactions, concealed amounts, fungibility, low fees and fast transaction processing. It's everything bitcoin was meant to be.
The real solution is to drop bitcoin and use better technology. Monero looks like the best option right now. Private transactions, concealed amounts, fungibility, low fees and fast transaction processing. It's everything bitcoin was meant to be.
> The real solution is to drop bitcoin and use better technology.
Walk into WalMart with cash and buy a prepaid gift card. Voilà. And the best part: it works literally everywhere. Both the buying and the using. Unlike flavor-of-the-week crypto.
Though, let's be real for a second, the ways to screw up from this point are many and varied. Accidentally use your home IP address to make the purchase? Oops. Did the naughty thing at Starbucks and there just happened to be a CCTV cam on you? Oh noes.
Probably best to stay offline, use cash everywhere, limit your banking, turn off your smartphone, and move from location to location constantly.
Or just give up.
> O cruel, needless misunderstanding! O stubborn, self-willed exile from the loving breast! Two gin-scented tears trickled down the sides of his nose. But it was all right, everything was all right, the struggle was finished. He had won the victory over himself. He loved Big Brother.
Walk into WalMart with cash and buy a prepaid gift card. Voilà. And the best part: it works literally everywhere. Both the buying and the using. Unlike flavor-of-the-week crypto.
Though, let's be real for a second, the ways to screw up from this point are many and varied. Accidentally use your home IP address to make the purchase? Oops. Did the naughty thing at Starbucks and there just happened to be a CCTV cam on you? Oh noes.
Probably best to stay offline, use cash everywhere, limit your banking, turn off your smartphone, and move from location to location constantly.
Or just give up.
> O cruel, needless misunderstanding! O stubborn, self-willed exile from the loving breast! Two gin-scented tears trickled down the sides of his nose. But it was all right, everything was all right, the struggle was finished. He had won the victory over himself. He loved Big Brother.
The Walmart gift card will only get you so far.
You can't: buy a fancy boat, car, or house. You can't pay for your kids school supplies (or school tuition), or treat your wife to a fancy hair do.
The money laundering laws try to stop people dealing in tens of thousands of dollars, who LIVE off of the money.
You can't: buy a fancy boat, car, or house. You can't pay for your kids school supplies (or school tuition), or treat your wife to a fancy hair do.
The money laundering laws try to stop people dealing in tens of thousands of dollars, who LIVE off of the money.
I think you could buy a prepaid Visa? Or is that not a thing anymore?
Hmm.... That IS a thing, and I think they have limits up to $5k. Mind you, if you try to buy anything too big, you'll get put on a list somewhere.
Also, something to keep in mind, most financial companies have a "Know Your Customer" stage where they verify you employment and income. If you are trying to buy a $20k thing, and your only income is "a stack of Visa Gift Cards", you're going to have a bad day.
Also, something to keep in mind, most financial companies have a "Know Your Customer" stage where they verify you employment and income. If you are trying to buy a $20k thing, and your only income is "a stack of Visa Gift Cards", you're going to have a bad day.
So, you're saying a hacker controlling an innocent person's machine can easily get away with it because law enforcement would catch the innocent person instead?
Or letting someone else to do that in Starbucks by buying him off would be quite easy.
Or letting someone else to do that in Starbucks by buying him off would be quite easy.
It’s a pretty obvious strategy that is scrutinized already. Try buying $500 gift cards routinely,
You have to find some clean bitcoins to tumble them with .... why would someone with clean coins tumble theirs with dirty ones?
Tumblers don't hide transactions, they just obfuscate them. Afaik the coins can still be easily traced programmatically.
That depends on how the tumbler is implemented. If the transaction from sender to receiver is instant and from a single address to another single address, well then yeah it's obvious. But if you batch the transactions of thousands of users over the course of a day for example, and make sure to split the amount to send to multiple addresses with random values, now the only thing that you can correlate is that one of the thousands of senders might also be one of the seemingly tens of thousands of receivers. If the tumbler is allowed to spread it out over multiple days or weeks or even months, well then good luck ever correlating the sender and receiver.
Maybe someone took them up on the $400,000,000 reward offered... https://www.bitfinex.com/posts/494
That would be a lot more today...it was $400M in August last year. That 30% fee is now worth $2.3B.
This seems to be the best solutions for the hackers?
"In order to confirm the identity of the hackers, we will request that 1 Satoshi is sent from the wallet address responsible for the hack to a wallet address specified by Bitfinex. We will work to ensure this can be done safely, thereby protecting the identities of all parties, and Bitfinex reserves the right to impose conditions on any transfers in order to verify claims and ensure a secure process."
Get $2.3B, no jail
"In order to confirm the identity of the hackers, we will request that 1 Satoshi is sent from the wallet address responsible for the hack to a wallet address specified by Bitfinex. We will work to ensure this can be done safely, thereby protecting the identities of all parties, and Bitfinex reserves the right to impose conditions on any transfers in order to verify claims and ensure a secure process."
Get $2.3B, no jail
Are they tryin' to send some sort of subtle signal, given the Coinbase listing today? :)
The all time high was also earlier today.
“Stolen”
This is Bitfinex we’re talking about. It’s a company run by criminals.
This is Bitfinex we’re talking about. It’s a company run by criminals.
Fun little reminder that when Bitfinex was "hacked" they took a 36% haircut, if memory serves, from all account holders, in all assets -- not just Bitcoin. [1]
Except for one account. Coinbase. [2]
They then issued tokens to all the accounts they skimmed, valued at $1 each redeemable for shares in Bitfinex. They effectively converted a $72 million dollar theft (at the time) into a $72 million dollar valuation for Bitfinex.
One of their executives, Giancarlo, was recorded telling token holders the best way to get their money back was to sell their shares to other people before they realized. [3]
> “The fastest way to get paid back, is to convert debt to shares and then sell your shares to another shareholder”.
These people run Tether.
This is the true magic of cryptocurrency.
[1] https://www.reuters.com/article/us-bitfinex-hacked-hongkong-...
[2] https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/
[3] https://medium.com/@bitfinexed/bitfinex-never-repaid-their-t...
Except for one account. Coinbase. [2]
They then issued tokens to all the accounts they skimmed, valued at $1 each redeemable for shares in Bitfinex. They effectively converted a $72 million dollar theft (at the time) into a $72 million dollar valuation for Bitfinex.
One of their executives, Giancarlo, was recorded telling token holders the best way to get their money back was to sell their shares to other people before they realized. [3]
> “The fastest way to get paid back, is to convert debt to shares and then sell your shares to another shareholder”.
These people run Tether.
This is the true magic of cryptocurrency.
[1] https://www.reuters.com/article/us-bitfinex-hacked-hongkong-...
[2] https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/
[3] https://medium.com/@bitfinexed/bitfinex-never-repaid-their-t...
The loss became tradable on their exchange, the swap for equity was optional, their was also a token for for representing the return of the stolen funds that was trading as well. Eventually the tokens representing the losses were trading for an equal value to the loss so if you were a little patient you were reimbursed. Alternatively if you took the gamble to buy the debt tokens at below dollar parity you made a nice return. Meanwhile MtGox users are still waiting for legal proceedings to conclude and get their money back.
The exchange of the 36% of assets for the token is a kind of fraud called conversion. [1] That it happened to work out is honestly completely irrelevant. Just as Madoff wouldn't have gotten off scott free if he'd happened to find a way to make people whole.
[1] http://www.dmlp.org/legal-guide/elements-conversion
[1] http://www.dmlp.org/legal-guide/elements-conversion
After the Mtgox hack mtgox debt was breifly tradable on website called bitcoinbuilder iirc. Financial innovation at its finest.
Seems to me the root problem is when people decide to use Bitcoin outside of it's original intended use, and centralize it.
Well, that's because it's completely inadequate for it's intended use (due to its 2-3 tx/sec cap) forcing people into L2.
I love Tether.
3 Billion printed this week, back then they should've just printed 72 mil USDT.
3 Billion printed this week, back then they should've just printed 72 mil USDT.
Should just print a trillion or two, you know, in reserve. "Authorized but not issued" is what they call it right?
They are probably waiting for the Statute of Limitations to expire. For wire fraud that is 10 years.
Fencing stolen property is a fresh crime with a new countdown.
It would be easy to use satellites to find the person with hundreds of Tesla's in their front yard.
people in crypto buy lambos
you can buy a telsa with btc
Or a lambo
not with converting it to fiat.
and we both know I did not mean _that_ Fiat.
and we both know I did not mean _that_ Fiat.
Meaningless unless they fix the BTC price of the Tesla
Not meaningless for taxes
How so? If I bought a Tesla with Bitcoin apparently I'd be forced to pay short-term capital gains even though I'm using it as just a payment currency. Doesn't sound like a good deal tax-wise. If Tesla gave me an equivalent discount on the BTC price though, that would change the game.
They want BTC.
They don't want you to buy BTC and spend it with them. That's not what they're incentivizing.
They don't want you to buy BTC and spend it with them. That's not what they're incentivizing.
Unless it’s the same owner just rotating addresses
But that wouldn’t make those bitcoins theirs legally, would it?
I believe in Hong Kong it's 12 years for criminal charges and 6 years for civil charges.
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Does the limitation resets if you move the funds publicly?
Case law on Bitcoin is still new. No guarantees depending on the jurisdiction, but I would figure most common law regions would not see it that way. The obvious analogy is moving the stolen funds between your accounts and publishing info about that. The limitation period on the fraud would still be from when the fraud was initially discovered by its rightful owner.
I wonder if some jurisdiction has a law against transporting stolen goods, and someone could twist that into saying that moving the coins from one address to another qualifies, and consider that a new crime, with the clock starting today.
Transactions only amount to $740mil, though: https://twitter.com/search?q=bitfinex%20hack%20from%3Awhale_...
Will be interesting to see what effect this has on the price, might extend into all of the risk conversations around Satoshi's stockpile.
Funds like this can be frozen when 51% of mining pools start censoring transactions. Pools are now beginning to do this. I expect there will be a lot of BTC like this that starts to realise they need to be trying to dump it / escape into monero as quickly as they can
There's a difference between pools not accepting txs in their mempool, and pools refusing to build on other miners' blocks that contain them. Pools are beginning to do the former (which doesn't cost them), not the latter (which would cost them dearly). Only if a majority of hashpower does the latter will censoring be effective (and then no longer cost them again).
A hashpower majority is not needed. For the latter, if a single digit percentage of the hashpower decides to enforce the ban, other miners in the network have an economic incentive to join the ban as well.
The reasoning is explained here https://juraj.bednar.io/en/blog-en/2020/11/12/how-could-regu...
In short, if a miner chooses to include banned transactions in its block, it means that block cannot be built off of by fully regulatory compliant miners. Fully compliant miners will be still building off the previous block in the chain. If fully compliant miners win the hash race and mine the next 2 blocks, the original miner's block will not be part of the longest chain, and they will lose all their block reward.
The reasoning is explained here https://juraj.bednar.io/en/blog-en/2020/11/12/how-could-regu...
In short, if a miner chooses to include banned transactions in its block, it means that block cannot be built off of by fully regulatory compliant miners. Fully compliant miners will be still building off the previous block in the chain. If fully compliant miners win the hash race and mine the next 2 blocks, the original miner's block will not be part of the longest chain, and they will lose all their block reward.
Who gets to determine which addresses are "poisoned"? China? The US? I have to imagine the ideologues in the bitcoin community will fight back against that. Also, not being censorable is a big part of bitcoin's value prop so this type of regulation would likely crash the price as well.
If different countries had different ban lists then it would still censor the BTC that are included in enough lists
As BTC continues to grow, the 'bitcoin community' changes in character; it's already fallen far from the cypherpunk anti-censorship / privacy roots
As BTC continues to grow, the 'bitcoin community' changes in character; it's already fallen far from the cypherpunk anti-censorship / privacy roots
Of course they can't start orphaning blocks yet, but they can once it is more popular. It wouldnt take much government pressure, obviously governments will want to stop people from processing illegal transactions, and miners won't care
The price of bitcoin will plunge to 0 if that happens, which is the reason why it won't.
The new breed of users doesnt care at all about such things. Usually the price goes up as it becomes less cypherpunk and more of a regulated surveillance instrument - speculators will argue that it increases legitimacy and encourages institutional investment. It will still be a scarce asset that hedges against inflation
You're missing that for this to work, miners, those who invest into processing bitcoin transactions, would be willingly lowering the value of what they do. Other comments bring issues they'd already face in cost trying to adopt banning more transactions. But if they accepted those costs, bitcoin's reputation of stability and trust would be broken, if 1 BTC = 0.75BTC because .25 was from tainted transactions, nobody wants to risk that happening to them so they'd abandon quickly and the price would plummet. But if the price would plummet then miners would be inclined to do the opposite to avoid that happening.
but it is already happening:
https://decrypt.co/48025/bitcoin-mining-pool-that-censors-tr...
Big pools need to buy cutting-edge equipment and use huge resources, they have to abide by regulators.
Most users would be unaffected because they just "hodl" and only care about the price going up + encouraging institutional adoption. Bitcoiners don't really care about making transactions.
The lack of privacy built into the protocol makes this inevitable. You're asking miners to willingly help move illegal funds while regulators watch
https://decrypt.co/48025/bitcoin-mining-pool-that-censors-tr...
Big pools need to buy cutting-edge equipment and use huge resources, they have to abide by regulators.
Most users would be unaffected because they just "hodl" and only care about the price going up + encouraging institutional adoption. Bitcoiners don't really care about making transactions.
The lack of privacy built into the protocol makes this inevitable. You're asking miners to willingly help move illegal funds while regulators watch
Only if you can keep up with the new addresses the coins are sent to, and if they decide to send some of the coins to random legitimate accounts en masse, now pools will be blocking countless legitimate accounts that have no connection to the censored address. It would require some kind of central agency that can track and immediately update a list of censored addresses.
Monero is mostly traceable still.
Source: https://www.sciendo.com/article/10.1515/popets-2018-0025
Source: https://www.sciendo.com/article/10.1515/popets-2018-0025
That article has been debunked for years, it is very old
https://www.getmonero.org/2018/03/29/response-to-an-empirica...
https://www.getmonero.org/2018/03/29/response-to-an-empirica...
It's not, that analysis is from 2017 and the issues described have been mitigated. The Monero team updated mixin sampling algorithm to better reflect real world usage. They increased the ring size from a minimum of 4 in the paper to 11. The team is working on increasing the ring size from 11 to 64, and possibly 128 (provided there is enough block chain space).
Is that money trapped in the system? The moment they sell to USD that account is now linked to a real person no?
It's more difficult, but not impossible I think:
On the Bitcoin side you can "wash" it by mixing it with other coins, or deposit/withdraw it through multiple exchanges.
Then on the output side, you can get rid of it through shell companies or through less reputable sites, or into countries that won't extradite criminals.
So - it's definitely harder than normal, but I think you could find a way.
On the Bitcoin side you can "wash" it by mixing it with other coins, or deposit/withdraw it through multiple exchanges.
Then on the output side, you can get rid of it through shell companies or through less reputable sites, or into countries that won't extradite criminals.
So - it's definitely harder than normal, but I think you could find a way.
Its pretty easy to from a tech perspective to tumble and swap coins or use a combination of both. Not only that but you can swap into different blockchains which have fully anonymous layers. So tracing a path is completely impossible. But there is one significant problem, tumbling and swapping 7.5 Billion is hard to do without creating huge market waves and that will be noticed. So you would spread it over 3-4 years and use a variety of swap/tumblers and it can be done. Eventually you have to cash it out and some off ramps might raise some flags.
It's possible to swap into monero without using any KYC exchange, but that requires liquidity. So it could take years.
> swap into monero without using any KYC exchange
How? Links on this being done?
How? Links on this being done?
Atomic swaps were possible way before Uniswap and the DeFi craze. Liquidity is another issue for 7.5bn though.
Isn't Uniswap doing a swap within the same chain?
Indeed. Alts should be wrapped so that they become swap-able with Uniswap. In that sense, Atomic swaps are superior since you have zero counter-party risk. Who guessed Bitcoin tech is superior to that of Ethereum?
Correct me if I'm wrong, but doesn't wrapping require KYC? So how could this be used to convert the BTC to Monero?
Wrapping and KYC are orthogonal, although maybe most of the current implementations require KYC, no idea.
Cross chain atomic swaps are something else entirely. Typically they involve using timelocked multisig transactions that reveal a new part of a secret in each output, allowing both parties to redeem or both deposits to be refunded.
Cross chain atomic swaps are something else entirely. Typically they involve using timelocked multisig transactions that reveal a new part of a secret in each output, allowing both parties to redeem or both deposits to be refunded.
Afaik, it's the custodian who requires KYC. The trading happens without. This might become a problem for custodians who now have a bunch of illegal coins. It'll be interesting to see how this will unfold.
There was a story not long ago a out someone paying a very high ETH amount for a simple ethereum transaction. Apparently with the right technical combination it is possible to guarantee that your miner will receive the mining fee. This makes it a good option for laundering.
I wonder if they could somehow collect interest off it anonymously. I read about certain coins offering staking, but not sure how it works and if it's possible to collect interest without revealing your identity.
It isn’t and that’s not what people would do.
They can gift some Teslas
This just popped into my head:
1: Recipient. Participate in one of those pyramid scams that always shows up in @elonmusk's replies and elsewhere.
2: Sender. Send money to a bunch of people who show up in one of those scams.
3: Recipient. Your plausible explanation for the windfall that just landed in your account is that you thought the scam was real, and hey, it apparently was!
This leads me to wonder: Are those scams just cover for laundering, that happens to also suck in some other gullible victims along the way?
1: Recipient. Participate in one of those pyramid scams that always shows up in @elonmusk's replies and elsewhere.
2: Sender. Send money to a bunch of people who show up in one of those scams.
3: Recipient. Your plausible explanation for the windfall that just landed in your account is that you thought the scam was real, and hey, it apparently was!
This leads me to wonder: Are those scams just cover for laundering, that happens to also suck in some other gullible victims along the way?
Or make a donation 1GVR2qbKgT4uVUQMYVgPhQxFcKRJBVYMo4
I actually wonder what would happen to me, if I suddenly received some of that stolen bitcoin.
I actually wonder what would happen to me, if I suddenly received some of that stolen bitcoin.
Memorize your private keys. Destroy any physical or digital copies of the keys in a “boating accident”. Tell the authorities you can’t recover the funds. Wait 25 years or so. Move to somewhere outside jurisdiction or extradition from the relevant authorities. Cash out.
or... sell them back to bitfinex at current market price like a BOSS!
>1GVR2qbKgT4uVUQMYVgPhQxFcKRJBVYMo4
A 1xxx addie?
In 2021?
Come on dude.
A 1xxx addie?
In 2021?
Come on dude.
What’s wrong with 1-prefixed addresses?
From https://bitcoinbriefly.com/practical-guide-bitcoin-addresses... :
"Legacy addresses start with the digit “1”. These Pay-to-Public-Key-Hash (P2PKH) addresses were once the standard address type up until August 2017. Many now advise against using them. Why?
Legacy addresses incur the most expensive transaction fees when sending payments. They also limit the Bitcoin network's ability to scale. And their case-sensitive nature often causes unwanted errors."
"Legacy addresses start with the digit “1”. These Pay-to-Public-Key-Hash (P2PKH) addresses were once the standard address type up until August 2017. Many now advise against using them. Why?
Legacy addresses incur the most expensive transaction fees when sending payments. They also limit the Bitcoin network's ability to scale. And their case-sensitive nature often causes unwanted errors."
Cool, thanks for the tip.
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leke only trusts Bitcoin Core.
Or bc1qtl0s05gxxnv9xskkyzrd7k5epwr4esqdhpcvfx
:pray: :)
:pray: :)
The same day of Coinbase IPO
Maybe figured that coinbase IPO would dominate crypto news for the day and any reporting on this would be drowned out, possibly?
Well it was stolen not lost...
Not your keys, not your coins. The keys own the coins - you're ancillary. The keys just found a new home. Sounds legit to me.
Seems about right... Crypto is awesome until it is terrible.
Waiting these are moved to Monero using Atomic Swaps.
The fact that all these transactions are public is what makes Bitcoin so creepy to me.
The liquid sidechain doesnt have public transactions, uses confidential transactions. It has been running for years.
There is a decent amount of bitcoin and assets issued on bitcoin over there
A bunch of exchanges and VCs are the validators, so it sacrifices some security but not in practice
There are hundreds of billions in crypto assets traded on validator networks
There is a decent amount of bitcoin and assets issued on bitcoin over there
A bunch of exchanges and VCs are the validators, so it sacrifices some security but not in practice
There are hundreds of billions in crypto assets traded on validator networks
I wonder if this is connected to the Russian military buildup on the Ukrainian border.
Why would you think it is ?
I don’t necessarily know the answer here. This is something that you can’t do with paper bills