5 ms·

If you can buy hashing equipment with your money, doesn't it mean you've already "cleaned it"? If not, what kind of business provides you with hashing equipmen

If you can buy hashing equipment with your money, doesn't it mean you've already "cleaned it"? If not, what kind of business provides you with hashing equipment from dirty money?

leakybit 8y ago
I believe that business is called Bitmain
mattnewton 8y ago
I have no idea what I am talking about, but I imagine you can exaggerate the returns and downplay the costs on an operation like bitcoin mining to squeeze in your dirty money. Like they would with any cash heavy business where it is hard to determine the actual costs and revenue.
- TomMarius 8y ago
  You still need to buy the equipment, and that is expensive. This makes zero sense.
  - mattnewton 8y ago
    It’s the same process with buying a cash buisiness, you bootstrap it with debt or clean money. You are assuming that the criminal only has access to dirty money, but it’s not that hard to take out a credit card, a loan, and/or have some savings.
    - TomMarius 8y ago
      The miner is not a magical money machine, it doesn't make so much money. You'd need to keep buying new and new hardware and somebody will get suspicious soon.
thaumasiotes 8y ago
You don't need to admit that you own the hashing equipment you bought with dirty money. You might have gotten lucky.
fareesh 8y ago
I guess it depends on what you mean by "hashing equipment" For example, if you go to Ritchie Street in Chennai, India there are plenty of stores that will sell you a top of the line GTX 1080 GPU for cash. No record of the transaction, and no taxes. A lot of stores will probably even accept USD. You wouldn't be able to launder boatloads of cash this way, but with enough motivation you could do this on a regular basis and offset some cash.
- chanfest22 8y ago
  Wow, that's terrible! We should probably ban cash because it is being blatantly used for money-laundering.
  - Filligree 8y ago
    You kid, but in some places that's already in the process of happening. See Sweden, for instance. https://www.bbc.com/news/business-41095004 https://www.bbc.com/news/business-41095004
    - ur-whale 8y ago
      Yes, it is unfortunately already the case in most EU countries. In France and Italy, for example, you can't buy a new car cash (cash transactions over 2.5K euros are basically illegal). This is a very profound loss of individual freedom, almost as important as losing right to free speech would be, yet strictly no one on the political spectrum seems the least concerned about it.
      - fel0nious 8y ago
        There is likely a balance here, somewhere. Be careful equating money with free speech. Citizens United in the US has had equally-troublesome consequences, based on the premises that corporations are people and money is their speech. Conflict of interest plays a role here, and that's unfortunately something that has been under constant 'redefinition', especially in the last 20-40 years.
  - 8y ago
sonnyblarney 8y ago
"If not, what kind of business provides you with hashing equipment from dirty money?" That part is easy. Other businesses don't know if your money is dirty, the issue is transactional, i.e. buying without a receipt in the tax domain you're in. So, if you can somehow take 'dirty USD' and buy ASICs anywhere outside of America, it will probably work. The purpose of Money Laundering is to get money into a bank account that the government will recognize as legit, but 'dirty money' can still be used for whatever reasons for nefarious purposes, a lot of it even from 'good businesses'. Buying a few ASICS in cash from individual stores will not raise eyebrows like walking into a Ferrari dealership with cash might.
- pas 8y ago
  How do you account for the cost of the ASICs then if it was bought with dirty money? Or the method is to start a legit business and make it waaaaay more profitable on paper (with all the dirty money)? (Like it "used to" be with laundries and/or casinos?)
  - sonnyblarney 8y ago
    If the BTC business is supposed to be legit, you just wouldn't put the ASICS on the books as assets. But I don't think the BTC business would necessarily need to be legit in the first place. It does seem like a powerful opportunity for nefarious activity, and this may be keeping the price propped up on some level. Organized crime is big business and they aren't stupid. Sadly.
    - pas 8y ago
      I know they aren't stupid, but they need a non-transparent, hard-to-audit business. Like a restaurant. The IRS (or the relevant tax authority) won't count how many meals you have served, and you can price it as high as you like. Or you can just do a festival and claim that you had a lot more visitors. It's hard to count people after all, and easy to print fake tickets. So, I simply think that ASICs are not the things used for money laundering, because their output is very constant, and the hashrate is public knowledge, so easy to verify how much money you made.
gammateam 8y ago
hm, so first the new mining operations run the entire fabrication line, so they have factories in Shenzhen or Scandinavia and create the mining hardware and start mining. if you have the whole production line you can pay for costs in cash or straight from the illicit source to people without ever passing through a reportable system secondly, when you do buy mining hardware or buy hashrate (cloud mining), most manufacturers and service providers ONLY take bitcoin, so if the money was dirty it still never passed through a reportable system. when you pay for invoices with cryptocurrency there is no billing address or any other information about the buyer. if you funds came from a botnet, a hack or even drugs but stayed in the system, there is no necessity to link your identity to anyone. you can ship your hardware to any address, or straight to a data center, and even if you think that will reveal your identity even the mining proceeds can go to any random address recipient and this is all new money. instead of trying to reveal the flaws, try imagining it as if you had five million dollars in bitcoin to launder and i2p/TOR and see how you could remain anonymous without messing up your OPSEC on either the blockchain or from your other activities.

If you can buy hashing equipment with your money, doesn't it mean you've already "cleaned it"? If not, what kind of business provides you with hashing equipment from dirty money?

leakybit 8y ago

I believe that business is called Bitmain

mattnewton 8y ago

I have no idea what I am talking about, but I imagine you can exaggerate the returns and downplay the costs on an operation like bitcoin mining to squeeze in your dirty money. Like they would with any cash heavy business where it is hard to determine the actual costs and revenue.

TomMarius 8y ago
You still need to buy the equipment, and that is expensive. This makes zero sense.
- mattnewton 8y ago
  It’s the same process with buying a cash buisiness, you bootstrap it with debt or clean money. You are assuming that the criminal only has access to dirty money, but it’s not that hard to take out a credit card, a loan, and/or have some savings.
  - TomMarius 8y ago
    The miner is not a magical money machine, it doesn't make so much money. You'd need to keep buying new and new hardware and somebody will get suspicious soon.

thaumasiotes 8y ago

You don't need to admit that you own the hashing equipment you bought with dirty money. You might have gotten lucky.

fareesh 8y ago

I guess it depends on what you mean by "hashing equipment" For example, if you go to Ritchie Street in Chennai, India there are plenty of stores that will sell you a top of the line GTX 1080 GPU for cash. No record of the transaction, and no taxes. A lot of stores will probably even accept USD. You wouldn't be able to launder boatloads of cash this way, but with enough motivation you could do this on a regular basis and offset some cash.

chanfest22 8y ago
Wow, that's terrible! We should probably ban cash because it is being blatantly used for money-laundering.
- Filligree 8y ago
  You kid, but in some places that's already in the process of happening. See Sweden, for instance. https://www.bbc.com/news/business-41095004 https://www.bbc.com/news/business-41095004
  - ur-whale 8y ago
    Yes, it is unfortunately already the case in most EU countries. In France and Italy, for example, you can't buy a new car cash (cash transactions over 2.5K euros are basically illegal). This is a very profound loss of individual freedom, almost as important as losing right to free speech would be, yet strictly no one on the political spectrum seems the least concerned about it.
    - fel0nious 8y ago
      There is likely a balance here, somewhere. Be careful equating money with free speech. Citizens United in the US has had equally-troublesome consequences, based on the premises that corporations are people and money is their speech. Conflict of interest plays a role here, and that's unfortunately something that has been under constant 'redefinition', especially in the last 20-40 years.
- 8y ago

sonnyblarney 8y ago

"If not, what kind of business provides you with hashing equipment from dirty money?" That part is easy. Other businesses don't know if your money is dirty, the issue is transactional, i.e. buying without a receipt in the tax domain you're in. So, if you can somehow take 'dirty USD' and buy ASICs anywhere outside of America, it will probably work. The purpose of Money Laundering is to get money into a bank account that the government will recognize as legit, but 'dirty money' can still be used for whatever reasons for nefarious purposes, a lot of it even from 'good businesses'. Buying a few ASICS in cash from individual stores will not raise eyebrows like walking into a Ferrari dealership with cash might.

pas 8y ago
How do you account for the cost of the ASICs then if it was bought with dirty money? Or the method is to start a legit business and make it waaaaay more profitable on paper (with all the dirty money)? (Like it "used to" be with laundries and/or casinos?)
- sonnyblarney 8y ago
  If the BTC business is supposed to be legit, you just wouldn't put the ASICS on the books as assets. But I don't think the BTC business would necessarily need to be legit in the first place. It does seem like a powerful opportunity for nefarious activity, and this may be keeping the price propped up on some level. Organized crime is big business and they aren't stupid. Sadly.
  - pas 8y ago
    I know they aren't stupid, but they need a non-transparent, hard-to-audit business. Like a restaurant. The IRS (or the relevant tax authority) won't count how many meals you have served, and you can price it as high as you like. Or you can just do a festival and claim that you had a lot more visitors. It's hard to count people after all, and easy to print fake tickets. So, I simply think that ASICs are not the things used for money laundering, because their output is very constant, and the hashrate is public knowledge, so easy to verify how much money you made.

gammateam 8y ago

hm, so first the new mining operations run the entire fabrication line, so they have factories in Shenzhen or Scandinavia and create the mining hardware and start mining. if you have the whole production line you can pay for costs in cash or straight from the illicit source to people without ever passing through a reportable system secondly, when you do buy mining hardware or buy hashrate (cloud mining), most manufacturers and service providers ONLY take bitcoin, so if the money was dirty it still never passed through a reportable system. when you pay for invoices with cryptocurrency there is no billing address or any other information about the buyer. if you funds came from a botnet, a hack or even drugs but stayed in the system, there is no necessity to link your identity to anyone. you can ship your hardware to any address, or straight to a data center, and even if you think that will reveal your identity even the mining proceeds can go to any random address recipient and this is all new money. instead of trying to reveal the flaws, try imagining it as if you had five million dollars in bitcoin to launder and i2p/TOR and see how you could remain anonymous without messing up your OPSEC on either the blockchain or from your other activities.