5 ms·

The holder of C could potentially be prosecuted for receiving stolen property, under AML laws, or as a co-conspirator in the original theft.

koolba 9y ago
If you replace bitcoin with cash, by your logic I'd be arrested for selling a thief an apple if he paid for it with stolen cash. That's the distinction. Is it money or is it a fenced good? If I'm receiving currency (be it real money or bitcoin), I'm not going to think about where it came from. It's fungible.
- numbsafari 9y ago
  Unless he's reaching into a giant purple spattered bag that says "bank vault" and the name of a bank you know was robbed.
- thisisit 9y ago
  Then you will be asked to cooperate and reveal the identity of the thief. If you don't, then yes you are in "potential" trouble.
  - koolba 9y ago
    I see no issue with cooperating. If they want to see my security footage then let them get a subpoena. If they want to see the IP logs and customer data for a potential money launderer, it's the same bar.
- stephengillie 9y ago
  Physical dollars each have a unique serial number - aren't these sometimes used to track criminals as they spend stolen funds? Or is that just a Hollywood exaggeration?
  - booleandilemma 9y ago
    Re: currency tracking, you might like this: https://www.wheresgeorge.com https://www.wheresgeorge.com
  - kahnpro 9y ago
    I think it's only useful if you know which serial numbers were stolen, for example if you give specific range of serial numbers as a ransom payment.
    - zeta0134 9y ago
      When I worked as a bank teller briefly, we had this planned out. There was a stack of bills (usually 10s, but it was kind of random) that we were only to give out if we were actively being robbed. They were indistinguishable from regular currency to avoid suspicion, but the serial numbers were recorded for tracking purposes. This was in a small town bank, and I'm sure that larger banks have more sophisticated policies. I'm curious to know if ATMs have any similar features.
- raverbashing 9y ago
  > by your logic I'd be arrested for selling a thief an apple if he paid for it with stolen cash. Yes, this can happen. Especially for higher valued items
- heeen 9y ago
  https://en.wikipedia.org/wiki/Handling_stolen_goods https://en.wikipedia.org/wiki/Handling_stolen_goods
- caseysoftware 9y ago
  Unfortunately, under the US drug laws, this is allowed. You're a drug dealer and rent an apartment? The landlord could now be at risk, regardless of whether they know how you make money to pay them. It's how the Feds have compelled completely law abiding citizens to work with law enforcement and/or threaten to take everything.
- JumpCrisscross 9y ago
  > I'd be arrested for selling a thief an apple if he paid for it with stolen cash Welcome to anti-money laundering law. KYC regulations basically mean, for anyone handling large volumes of money, it's the vendor's business, and liability, to know where customers' money comes from.
olegkikin 9y ago
But C is just some address the thief used. You see, you can create a million of them a minute for free, and then move the stolen and clean money between them in a randomized way, making it indistinguishable from real transactions. All you see on the blockchain is money moving between addresses. Exchanges do know the identities of a small fraction of all addresses, that's true. But if someone wants to remain anonymous, and has a relatively small amount (in relation to exchange's liquidity), it becomes trivial to hide the money. Something like MtGox amounts are much much more complicated to clean in their entirety, that I agree with.
- philbarr 9y ago
  Where does the clean money come from?
  - olegkikin 9y ago
    "Clean" in this case only means not this stolen money. It can be some other stolen money. Or it can be borrowed money. The bitcoin tumbler is a service that does the mixing, and as long as it has more than one customer, it can do the mixing.
    - saalweachter 9y ago
      I really gotta wonder what sort of protection this actually provides. A tumbler only helps if a lot of people with legitimate BitCoins frequently mix them in, so that people with coins from a mixer have a plausible claim of innocence. If mixers are primarily used by criminals, you've only anonymized which crime you've committed, you haven't really laundered the money. If those coins touch your real-world identity, you may not be incriminated in a particular crime, but you've made yourself into a suspect in a relatively small pool of crimes.
      - olegkikin 9y ago
        You are correct. Tumbling is not laundering, it's only there to make the tracing close to impossible.
kfrzcode 9y ago
Does this maybe change depending on jurisdiction?
deleted 9y ago
[deleted]
Ajedi32 9y ago
Possibly, but only if they get caught. I imagine many of these services are run by individuals who remain anonymous to avoid prosecution in the event their service is used for money laundering.
- watwut 9y ago
  I would like to know what is their average lifetime. AlphaBay was not exactly the same, but it was longest running market - meaning a bit above 3 years. It does not give much confidence.

koolba 9y ago

If you replace bitcoin with cash, by your logic I'd be arrested for selling a thief an apple if he paid for it with stolen cash. That's the distinction. Is it money or is it a fenced good? If I'm receiving currency (be it real money or bitcoin), I'm not going to think about where it came from. It's fungible.

numbsafari 9y ago
Unless he's reaching into a giant purple spattered bag that says "bank vault" and the name of a bank you know was robbed.
thisisit 9y ago
Then you will be asked to cooperate and reveal the identity of the thief. If you don't, then yes you are in "potential" trouble.
- koolba 9y ago
  I see no issue with cooperating. If they want to see my security footage then let them get a subpoena. If they want to see the IP logs and customer data for a potential money launderer, it's the same bar.
stephengillie 9y ago
Physical dollars each have a unique serial number - aren't these sometimes used to track criminals as they spend stolen funds? Or is that just a Hollywood exaggeration?
- booleandilemma 9y ago
  Re: currency tracking, you might like this: https://www.wheresgeorge.com https://www.wheresgeorge.com
- kahnpro 9y ago
  I think it's only useful if you know which serial numbers were stolen, for example if you give specific range of serial numbers as a ransom payment.
  - zeta0134 9y ago
    When I worked as a bank teller briefly, we had this planned out. There was a stack of bills (usually 10s, but it was kind of random) that we were only to give out if we were actively being robbed. They were indistinguishable from regular currency to avoid suspicion, but the serial numbers were recorded for tracking purposes. This was in a small town bank, and I'm sure that larger banks have more sophisticated policies. I'm curious to know if ATMs have any similar features.
raverbashing 9y ago
> by your logic I'd be arrested for selling a thief an apple if he paid for it with stolen cash. Yes, this can happen. Especially for higher valued items
heeen 9y ago
https://en.wikipedia.org/wiki/Handling_stolen_goods https://en.wikipedia.org/wiki/Handling_stolen_goods
caseysoftware 9y ago
Unfortunately, under the US drug laws, this is allowed. You're a drug dealer and rent an apartment? The landlord could now be at risk, regardless of whether they know how you make money to pay them. It's how the Feds have compelled completely law abiding citizens to work with law enforcement and/or threaten to take everything.
JumpCrisscross 9y ago
> I'd be arrested for selling a thief an apple if he paid for it with stolen cash Welcome to anti-money laundering law. KYC regulations basically mean, for anyone handling large volumes of money, it's the vendor's business, and liability, to know where customers' money comes from.

olegkikin 9y ago

But C is just some address the thief used. You see, you can create a million of them a minute for free, and then move the stolen and clean money between them in a randomized way, making it indistinguishable from real transactions. All you see on the blockchain is money moving between addresses. Exchanges do know the identities of a small fraction of all addresses, that's true. But if someone wants to remain anonymous, and has a relatively small amount (in relation to exchange's liquidity), it becomes trivial to hide the money. Something like MtGox amounts are much much more complicated to clean in their entirety, that I agree with.

philbarr 9y ago
Where does the clean money come from?
- olegkikin 9y ago
  "Clean" in this case only means not this stolen money. It can be some other stolen money. Or it can be borrowed money. The bitcoin tumbler is a service that does the mixing, and as long as it has more than one customer, it can do the mixing.
  - saalweachter 9y ago
    I really gotta wonder what sort of protection this actually provides. A tumbler only helps if a lot of people with legitimate BitCoins frequently mix them in, so that people with coins from a mixer have a plausible claim of innocence. If mixers are primarily used by criminals, you've only anonymized which crime you've committed, you haven't really laundered the money. If those coins touch your real-world identity, you may not be incriminated in a particular crime, but you've made yourself into a suspect in a relatively small pool of crimes.
    - olegkikin 9y ago
      You are correct. Tumbling is not laundering, it's only there to make the tracing close to impossible.

kfrzcode 9y ago

Does this maybe change depending on jurisdiction?

deleted 9y ago

[deleted]

Ajedi32 9y ago

Possibly, but only if they get caught. I imagine many of these services are run by individuals who remain anonymous to avoid prosecution in the event their service is used for money laundering.

watwut 9y ago
I would like to know what is their average lifetime. AlphaBay was not exactly the same, but it was longest running market - meaning a bit above 3 years. It does not give much confidence.