6 ms·

So, let’s assume the perpetrators get their ransom in Bitcoin... how are they ever going to be able to spend these coins? It’s not like the transactions are ano

So, let’s assume the perpetrators get their ransom in Bitcoin... how are they ever going to be able to spend these coins? It’s not like the transactions are anonymous. So what will the rest of the world be able to do about it? Can the target wallets be blocked? Monitored?

vmception 6y ago
the secret that chainanalysis companies wont tell you is that they have no idea if the same physical human still owns the coins they are following. watching transactions on a blockchain is a wild goose chase that relies on amateurs making stupid mistakes.
- lifeisstillgood 6y ago
  Huh? Aren't we following addresses (If you have the private key to an account that accepted a ransom, chances are you are the same person (or in cahoots enough to be legally in trouble)
  - netsharc 6y ago
    I don't know the details of the tracing, but let's say I control the wallet that is to receive the ransom. Wouldn't it be "trivial" for me to sell some to e.g. a Chinese millionaire, who in turn would transfer me some money from his Cyprus bank account to mine? Or replace "Chinese" with any country where there's less "Know your customer" requirements. It's probably not even that hard for a Chinese millionaire to pay one of his housekeepers a lot of Yuans to borrow her identity card to open that account...
    - tshaddox 6y ago
      Sure, if you want to trust another party to clean the money, then of course you can conceal the trail of custody from the blockchain.
    - lifeisstillgood 6y ago
      All of that is traceable too. And, no. Some chinese millionaire is not going to wire you cash in return for a private key. What if you vanish? What's he going to do - sue you? This stuff only happens when they know where you live and your kids go to school. Money laundering IRL is hard - and compared to cold cash, bitcoin is accepted in very few places so it cannot be easily off ramped So I am going to guess bitcoin in crime is mostly like stolen artworks. Someone steals the painting and a newspaper says "20 million dollar painting stolen" and they can use it as a deposit on a drug deal (maybe at 200k worth). At a guess bitcoins are passed around from phone to phone, part-cash part-BTC (like part cash part shares buyouts). Just the ten minutes wait for the transaction to clear probably involves people nervously fingering guns. Of course, signal analysis helps here too. If I am right then there is a ring of transactions all of which are dirty, and if you break one through poor ops sec (same phone used for drug deal and for day trading) then you get a ton of good info. If someone used a burner phone for that one transaction then it's hard - but how many ur ed phones were turned on just once in a given city at a specific ten minute window. And now how many phones were on that same cell tower when that came online . Yeah these things are traceable.
  - vmception 6y ago
    You dont know if they sold a ledger to someone that trusts their network You dont know if a transaction was an exchange for something on a different blockchain And even when you do know that, that just increases the ways for them to obfuscate and unlink. If they got ethereum or an erc20 token, it goes into an AMM, a layer-2 system or straight into Tornado.cash and its gone. Even if you did compromise Tornado Cash somehow in the future, you wouldnt know of the note was sold offline to someone else or again about the original depositor selling their ledger/private key. If the funds were used to pump a different token, you wouldnt know if the criminal had different funds under their real identity that was just a benefactor of the price appreciation in the pumped token, indistinguishable from any speculator that got lucky. Tokens rallying in price 5,000% is not uncommon, someone with $100,000 in clean funds that already own the to-be-pumped token can sell a 50-bagger for $5,000,000 with no suspicion. If that sounds too contrived, it doesnt even account for cloud mining at a loss and earning slightly less new bitcoin over time. Or buying a bunch of actual mining machines and really mining new coins because the chinese vendor doesnt care about tainted US/EU coins. Can we even say that when one of those states seizes and auctions the coins off, that they are magically clean... everywhere? If the Myanmar disputed government did an bitcoin auction, would chainanalyis systems even factor that in, are those clean? Would you even know or would you still be following transactions around like “aha! I see you!” Your assumption is that the original funds needs to be invisible and never tied to anyone’s identity, when thats not the vector at all. Following a transaction around tells you nothing, and reintegration of tainted coins is exceptionally easy in unlimited-enough amounts. Even major exchanges that require KYC still often have 2 BTC/daily thresholds before they require identification to increase that. Thats currently $120,000 per account per day. And thats the worst and one of the slowest ways of getting liquid given the possibilities of them freezing funds and requiring the user to be more careful and also quick.
    - grumple 6y ago
      Important question: If you receive Bitcoin which was originally received as a ransom, could you be held legally liable even if you weren't the thief? I suspect that such ransomed crypto would be forever tainted, as would anything ledgers that touched it. The US has a number of laws to criminalize comingling of money gained from criminal enterprise, doesn't it? This makes owning any crypto potentially dangerous imo.
ad31mar 6y ago
https://en.bitcoin.it/wiki/CoinJoin https://en.bitcoin.it/wiki/CoinJoin
shiado 6y ago
https://wasabiwallet.io/ https://wasabiwallet.io/
sn_master 6y ago
They can buy Monero with it. Many exchanges exist that convert between the two. Once its in Monero, they can buy BTC again and it's very hard to prove the two are related.

vmception 6y ago

the secret that chainanalysis companies wont tell you is that they have no idea if the same physical human still owns the coins they are following. watching transactions on a blockchain is a wild goose chase that relies on amateurs making stupid mistakes.

lifeisstillgood 6y ago
Huh? Aren't we following addresses (If you have the private key to an account that accepted a ransom, chances are you are the same person (or in cahoots enough to be legally in trouble)
- netsharc 6y ago
  I don't know the details of the tracing, but let's say I control the wallet that is to receive the ransom. Wouldn't it be "trivial" for me to sell some to e.g. a Chinese millionaire, who in turn would transfer me some money from his Cyprus bank account to mine? Or replace "Chinese" with any country where there's less "Know your customer" requirements. It's probably not even that hard for a Chinese millionaire to pay one of his housekeepers a lot of Yuans to borrow her identity card to open that account...
  - tshaddox 6y ago
    Sure, if you want to trust another party to clean the money, then of course you can conceal the trail of custody from the blockchain.
  - lifeisstillgood 6y ago
    All of that is traceable too. And, no. Some chinese millionaire is not going to wire you cash in return for a private key. What if you vanish? What's he going to do - sue you? This stuff only happens when they know where you live and your kids go to school. Money laundering IRL is hard - and compared to cold cash, bitcoin is accepted in very few places so it cannot be easily off ramped So I am going to guess bitcoin in crime is mostly like stolen artworks. Someone steals the painting and a newspaper says "20 million dollar painting stolen" and they can use it as a deposit on a drug deal (maybe at 200k worth). At a guess bitcoins are passed around from phone to phone, part-cash part-BTC (like part cash part shares buyouts). Just the ten minutes wait for the transaction to clear probably involves people nervously fingering guns. Of course, signal analysis helps here too. If I am right then there is a ring of transactions all of which are dirty, and if you break one through poor ops sec (same phone used for drug deal and for day trading) then you get a ton of good info. If someone used a burner phone for that one transaction then it's hard - but how many ur ed phones were turned on just once in a given city at a specific ten minute window. And now how many phones were on that same cell tower when that came online . Yeah these things are traceable.
- vmception 6y ago
  You dont know if they sold a ledger to someone that trusts their network You dont know if a transaction was an exchange for something on a different blockchain And even when you do know that, that just increases the ways for them to obfuscate and unlink. If they got ethereum or an erc20 token, it goes into an AMM, a layer-2 system or straight into Tornado.cash and its gone. Even if you did compromise Tornado Cash somehow in the future, you wouldnt know of the note was sold offline to someone else or again about the original depositor selling their ledger/private key. If the funds were used to pump a different token, you wouldnt know if the criminal had different funds under their real identity that was just a benefactor of the price appreciation in the pumped token, indistinguishable from any speculator that got lucky. Tokens rallying in price 5,000% is not uncommon, someone with $100,000 in clean funds that already own the to-be-pumped token can sell a 50-bagger for $5,000,000 with no suspicion. If that sounds too contrived, it doesnt even account for cloud mining at a loss and earning slightly less new bitcoin over time. Or buying a bunch of actual mining machines and really mining new coins because the chinese vendor doesnt care about tainted US/EU coins. Can we even say that when one of those states seizes and auctions the coins off, that they are magically clean... everywhere? If the Myanmar disputed government did an bitcoin auction, would chainanalyis systems even factor that in, are those clean? Would you even know or would you still be following transactions around like “aha! I see you!” Your assumption is that the original funds needs to be invisible and never tied to anyone’s identity, when thats not the vector at all. Following a transaction around tells you nothing, and reintegration of tainted coins is exceptionally easy in unlimited-enough amounts. Even major exchanges that require KYC still often have 2 BTC/daily thresholds before they require identification to increase that. Thats currently $120,000 per account per day. And thats the worst and one of the slowest ways of getting liquid given the possibilities of them freezing funds and requiring the user to be more careful and also quick.
  - grumple 6y ago
    Important question: If you receive Bitcoin which was originally received as a ransom, could you be held legally liable even if you weren't the thief? I suspect that such ransomed crypto would be forever tainted, as would anything ledgers that touched it. The US has a number of laws to criminalize comingling of money gained from criminal enterprise, doesn't it? This makes owning any crypto potentially dangerous imo.

ad31mar 6y ago

https://en.bitcoin.it/wiki/CoinJoin https://en.bitcoin.it/wiki/CoinJoin

shiado 6y ago

https://wasabiwallet.io/ https://wasabiwallet.io/

sn_master 6y ago

They can buy Monero with it. Many exchanges exist that convert between the two. Once its in Monero, they can buy BTC again and it's very hard to prove the two are related.