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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

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.
    - rocqua 9y ago
      Amortized guilt seems a lot better to me than specific guilt. Finding a charge in there is really difficult. As is 'beyond the shadow of a doubt'. Beyond that, you could buy legitimate bitcoin and only use it to 'legitimize' mixing pools.

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.
  - rocqua 9y ago
    Amortized guilt seems a lot better to me than specific guilt. Finding a charge in there is really difficult. As is 'beyond the shadow of a doubt'. Beyond that, you could buy legitimate bitcoin and only use it to 'legitimize' mixing pools.