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Not sure how the scammers and thieves operate, but wouldn't they (likely) be laundering the money the same way they've always been doing it? I.e, exploiting th

Not sure how the scammers and thieves operate, but wouldn't they (likely) be laundering the money the same way they've always been doing it? I.e, exploiting things like identity theft, countries and exchanges with little oversight, mules, gambling, etc.

HNfriend234 6y ago
If they want to launder the funds all they have to do is used a decentralized exchange to convert the bitcoin into something like monero. Monero has an encrypted blockchain and a bunch of other anonymization features. So once you convert it to monero, poof, the funds simply disappear into the ether just like that without a trace. They can then convert it back into bitcoin if they want as well.
- Gaelan 6y ago
  But what exchange (in its right mind) would take those bitcoins? They're permanently tainted, and are likely very hard to convert into fiat currency, and therefore have, I expect, near zero value.
  - spurdoman77 6y ago
    The exchange taking it wont be knowingly taking it, it is likely just a exchange that doesnt have system for detecting it. There are thousands of btc exchanges all around the world. For sure there are some where they dont even know about bitfinex.
  - Salgat 6y ago
    All it takes is one country like Switzerland legalizing cryptocoin tumbling. You send your bitcoin to a single address along with millions of others, and it sends out to millions of addresses different values, with no traceability between the sender and receiver (if done correctly, such as batching all transactions over a month into a single event). It would be used by many legal entities also in order to hide their activity (rich people don't want their financial activity known to the public even if it's completely legal).
- g00gler 6y ago
  Wouldn’t they have some trouble getting it into an exchange to change it to XMR? I assume that even if they moved some portion of it, say 10 BTC, to N different wallets, those transactions would be traceable to the exchange? I’m not sure how XMR works but then the exchange would know at least which wallet the XMR was sent to. I’m also not sure of the law surrounding a P2P transfer (IE receiving stolen property) but I’m guessing you might be SOL if you did a trade with them on a P2P platform as well... Very interested if someone in the know would like to chime in
  - sjtindell 6y ago
    Defi exchanges can help with this. You essentially give your money to a smart contract and receive whichever other token you’d like.
tamrix 6y ago
There's also wrapped bitcoins as an etf on etherum. Would they be able to detect or reject stolen bitcoins. Would you be able to trade the ETF coins instead without knowing?

HNfriend234 6y ago

If they want to launder the funds all they have to do is used a decentralized exchange to convert the bitcoin into something like monero. Monero has an encrypted blockchain and a bunch of other anonymization features. So once you convert it to monero, poof, the funds simply disappear into the ether just like that without a trace. They can then convert it back into bitcoin if they want as well.

Gaelan 6y ago
But what exchange (in its right mind) would take those bitcoins? They're permanently tainted, and are likely very hard to convert into fiat currency, and therefore have, I expect, near zero value.
- spurdoman77 6y ago
  The exchange taking it wont be knowingly taking it, it is likely just a exchange that doesnt have system for detecting it. There are thousands of btc exchanges all around the world. For sure there are some where they dont even know about bitfinex.
- Salgat 6y ago
  All it takes is one country like Switzerland legalizing cryptocoin tumbling. You send your bitcoin to a single address along with millions of others, and it sends out to millions of addresses different values, with no traceability between the sender and receiver (if done correctly, such as batching all transactions over a month into a single event). It would be used by many legal entities also in order to hide their activity (rich people don't want their financial activity known to the public even if it's completely legal).
g00gler 6y ago
Wouldn’t they have some trouble getting it into an exchange to change it to XMR? I assume that even if they moved some portion of it, say 10 BTC, to N different wallets, those transactions would be traceable to the exchange? I’m not sure how XMR works but then the exchange would know at least which wallet the XMR was sent to. I’m also not sure of the law surrounding a P2P transfer (IE receiving stolen property) but I’m guessing you might be SOL if you did a trade with them on a P2P platform as well... Very interested if someone in the know would like to chime in
- sjtindell 6y ago
  Defi exchanges can help with this. You essentially give your money to a smart contract and receive whichever other token you’d like.

tamrix 6y ago

There's also wrapped bitcoins as an etf on etherum. Would they be able to detect or reject stolen bitcoins. Would you be able to trade the ETF coins instead without knowing?