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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
by 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 agoImportant 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.
- vmception 6y agoThen you should be obfuscating the origin of your earned bitcoin just like the criminals Or is the reality that criminal and non-criminals funds are already being obfuscated regularly because bitcoin is 12 years old and people already thought of this problem a decade ago
- grumple 6y agoIsn’t the whole issue here that you can’t obfuscate the origin of the Bitcoin? The transactions by Hyundai to buy the Bitcoin would be known; the transfer of those bitcoins thereafter ad infinitum are all documented in the ledger. There is no obfuscation. As others said, the only way out is to trade for another crypto that has secrecy (Monero).
- vmception 6y agoyou answered your own question. when you trade your bitcoin out for Monero, someone else has received your bitcoin and its their problem. did you just frame that person, or are the other people following the bitcoin transactions between addresses just wasting their time. do those people even know that one of the series of transactions they've been following for years was a trade for Monero? no, they don't. this reality is indistinguishable between legal and illegal transactions. for anyone passing by: the scenarios so far are based on starting with bitcoin, briefly swapping to monero, and ending with clean bitcoin. many people start with Monero, and only get the amount of clean bitcoin they need when necessary to pay for things, which completely alters the problems and solutions.
- grumple 6y agoRight, that’s my point: the recipient of those Bitcoin is receiving stolen property / dirty money. I’d expect that the US government could easily seize the property (as they already do for cash) and potentially imprison the recipients.