$7.5B In Stolen Bitcoin from 2016 Bitfinex Hack has just been moved
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I don’t necessarily know the answer here. This is something that you can’t do with paper bills
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.
They'd get less than cashing it all out themselves obviously, but it would take forever to unravel what actually happened (if possible ever)
Politicians are surprisingly cheap, as I've learned over the years from various reports.
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.
The bad money gets mixed with the good in the exchanges wallet, and sent to random people...
they may not have a choice if the gov't regulation forces them to flag it.
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).
Not sure how you'd target a geographical area though.
IANAL, but if crime prescription is possible, you could transfer to 5,000 wallets and keep the rest for your pirate-themed retirement island.
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)
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.
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.
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.
Yep, this is referred to as “coin control”
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
There is no need for it to be trustless and distributed.
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.
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.
You don’t punish someone based on chance.
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... :)
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).
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)
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)
https://www.getmonero.org/resources/moneropedia/fungibility....
Monero protects the service provider, but doesn't solve the other problems.
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.
(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.)
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.
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.
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' is ofcourse situational, but abandoned property can be 'found' and claimed
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.)
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.)
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.
Total outsider here, asking honestly.
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.
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.
There are many stories of bills being marked in specific ways to to identify their provenance.
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.
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?
https://www.wsj.com/articles/SB10000872396390443713704577601...
https://www.wsj.com/articles/SB10001424127887324412604578512...
There’s records and then there’s “records”.
https://www.icij.org/investigations/fincen-files/hsbc-moved-...
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.
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.
What about tumblers?
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.
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.
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.
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.
Or letting someone else to do that in Starbucks by buying him off would be quite easy.
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.
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.
> 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...
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.
Do you also claim that banks are the biggest thieves?
[0] https://www.propublica.org/article/how-the-irs-was-gutted
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.
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.
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...
Base living wage ($70-$90k)
+ 1-5% of each amount recovered
Incentivize pursuing the biggest evaders, and the problem may solve itself.
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.
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.
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.e, exploiting things like identity theft, countries and exchanges with little oversight, mules, gambling, etc.
There are thousands of btc exchanges all around the world. For sure there are some where they dont even know about bitfinex.
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
"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
(Maybe their are tryin' to get "some" shares ... :)
re: reporting, if -anything- this will get them more attention, not less? (I'd think ...)This is Bitfinex we’re talking about. It’s a company run by criminals.
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...
3 Billion printed this week, back then they should've just printed 72 mil USDT.
and we both know I did not mean _that_ Fiat.
They don't want you to buy BTC and spend it with them. That's not what they're incentivizing.
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.
As BTC continues to grow, the 'bitcoin community' changes in character; it's already fallen far from the cypherpunk anti-censorship / privacy roots
Source: https://www.sciendo.com/article/10.1515/popets-2018-0025
https://www.getmonero.org/2018/03/29/response-to-an-empirica...
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
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.
How? Links on this being done?
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.
I actually wonder what would happen to me, if I suddenly received some of that stolen bitcoin.
A 1xxx addie?
In 2021?
Come on dude.
"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."
:pray: :)
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?
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