11 ms·

Who are you going to fine? Distributed ledgers are not owned by a central entity.

by tnzm 5y ago

anothernewdude 5y ago
Entities that are caught trading coins that have gone through wallets attached to ransomware. Target big exchanges.
- tartoran 5y ago
  But those wallets will be a one time thing and next time a new walled would be used for this type of thing. How could exchanges know that?
  - tnzm 5y ago
    Bitcoin is not private. Wallets are ephemeral, however the coins themselves can be tracked. Monero, on the other hand...
    - asdfasgasdgasdg 5y ago
      Here's one possible recipe for fixing this issue: - Ban anonymous cryptocurrencies. - In pseudonymous cryptos, mark any address that has been the destination of a ransomware payment or demand as tainted. Any net positive transaction from a tainted source wallet marks the destination wallet as tainted. (I.e. you are obligated to return tainted monies to tainted wallets if they send money to you.) - Exchanges are forbidden to deal with tainted wallets, or with any exchange that deals with tainted wallets. While you're at it, I guess you could mark any wallet funded at an exchange that doesn't KYC as tainted as well, to limit the use of crypto for money laundering. I'm guessing we're going to figure a lot of this stuff out in the next 10-20 years, if the crypto craze doesn't die off naturally during that timeframe.
      - tnzm 5y ago
        How would you ban an anonymous cryptocurrency?
        asdfasgasdgasdg 5y ago
        Basically, in order for a wallet to be "green" it needs to be associated with a real world identity and, if it serves as an exchange, it also needs to follow the policy not to exchange anonymous into pseudonymous. Any wallet that doesn't follow this policy is tainted. At fiat offramps, seize monies sourced from tainted wallets as it's presumptively illegal.
        tnzm 5y ago
        How do you intend on preventing people from just exchanging crypto for goods instead of having to go through offramps?
        asdfasgasdgasdg 5y ago
        The threat of being charged with money laundering? The enormous friction that such a transaction would encounter compared to the status quo?
        tnzm 5y ago
        Ah yes, threats and bureaucracy, the go-to tools of the statist. Reminds me, more than anything else, of all the joy sparked worldwide for the better part of the 20th century by the War on Drugs. In your ideal world, is any cash transaction also "presumed guilty" (hah!) of money laundering? The real fault lies with institutions rushing to half-assedly digitize so now they're wide open to script kiddies, and with enterprise IT providers doing a piss-poor job at doing correct software engineering. And now you're suggesting more savagery like it's some sort of solution to anything at all?
        asdfasgasdgasdg 5y ago
- hanklazard 5y ago
  There are mechanisms to obfuscate using Bitcoin laundering services or with zksnarks-based transactions (https://zk.money https://zk.money). As much as it would be great to be able to track these funds, I think it will be increasingly impossible.
  - amluto 5y ago
    Ban the exchange of laundered bitcoins and other coins, too. If laundering you non-banned coins gets them banned, your incentive to do so goes way down.
    - vmception 5y ago
      A) Use already clean money in one address to buy a token on uniswap (or any AMM) B) Use your laundered dirty money in other addresses to pump the token on uniswap (or any AMM) C) Sell the token from address in A) back into the Uniswap liquidity pool at a massive profit, enjoy the profits and reintegrated money. You look like any trader. D) Bag hold the token in the address from B) and never think about it again and never worry about trying to cash that out. In addition that address can add to the liquidity pool and provide a service to all other traders indefinitely. E) Laugh at people that are still imagining how difficult it is to launder money on public ledgers. Blockchain detectives on their wild goose chase looking at the wrong addresses. Do this all over time, and not immediately pumping a token with the laundered money. Sure, I’ll probably get more scrutiny after writing this but you won’t. I really hate chilled speech and people having dumb ideas because the should-be-obvious reality is never talked about. The point is that the trader behavior is indistinguishable from others, and there are no financial intermediaries on permissionless AMMs to flag anything.
      - amluto 5y ago
        This isn’t that different from regular (non-blockchain) money laundering. You can pick your favorite illiquid penny stock, pump it up to 10 cents, and arrange to pick up the profit on the other end. You’ll be up against various people betting against you and, if you use Uniswap between reasonably liquid tokens, you’ll also be up against arbitrageurs. With Ethereum you can, in principle, arrange to atomically pump a liquidity pool and take the profit, but doing so makes it really obvious what’s going on. And, with Ethereum, all the creative sleuths can see what’s going on and can analyze the data and find you. (This style of intentionally introducing a pricing error and arbitraging it yourself happens for real and is not always particularly profitable. You can read about the foreign exchange fixing antitrust shenanigans. Some traders thought they were being very clever, and, according to Matt Levine, made relatively small amounts of money and ended up getting seriously smacked down. The feds and the courts may be slow, but they’re not dumb.) This all seems very abstract, but, when you try to spend what you think were carefully laundered ransomware gains on a nice beach in France or Florida and Interpol or the FBI arrests you, the resulting trial and prison time will be considerably less abstract. :)
- mtgx 5y ago
  "Just target the big cartels". How has that worked out for the war on drugs so far? In the real world the solutions will never be this easy or perfect.
PicassoCTs 5y ago
Well, you just wait for public good will to turn into active hatred, and then voted in on that hatred, you put the hammer down on all crypto forever.
8note 5y ago
Fine all of them? Sounds like a great benefit for the government

Who are you going to fine? Distributed ledgers are not owned by a central entity.

by tnzm 5y ago

Who are you going to fine? Distributed ledgers are not owned by a central entity.

anothernewdude 5y ago

Entities that are caught trading coins that have gone through wallets attached to ransomware. Target big exchanges.

tartoran 5y ago
But those wallets will be a one time thing and next time a new walled would be used for this type of thing. How could exchanges know that?
- tnzm 5y ago
  Bitcoin is not private. Wallets are ephemeral, however the coins themselves can be tracked. Monero, on the other hand...
  - asdfasgasdgasdg 5y ago
    Here's one possible recipe for fixing this issue: - Ban anonymous cryptocurrencies. - In pseudonymous cryptos, mark any address that has been the destination of a ransomware payment or demand as tainted. Any net positive transaction from a tainted source wallet marks the destination wallet as tainted. (I.e. you are obligated to return tainted monies to tainted wallets if they send money to you.) - Exchanges are forbidden to deal with tainted wallets, or with any exchange that deals with tainted wallets. While you're at it, I guess you could mark any wallet funded at an exchange that doesn't KYC as tainted as well, to limit the use of crypto for money laundering. I'm guessing we're going to figure a lot of this stuff out in the next 10-20 years, if the crypto craze doesn't die off naturally during that timeframe.
    - tnzm 5y ago
      How would you ban an anonymous cryptocurrency?
      - asdfasgasdgasdg 5y ago
        Basically, in order for a wallet to be "green" it needs to be associated with a real world identity and, if it serves as an exchange, it also needs to follow the policy not to exchange anonymous into pseudonymous. Any wallet that doesn't follow this policy is tainted. At fiat offramps, seize monies sourced from tainted wallets as it's presumptively illegal.
        tnzm 5y ago
        How do you intend on preventing people from just exchanging crypto for goods instead of having to go through offramps?
        asdfasgasdgasdg 5y ago
        The threat of being charged with money laundering? The enormous friction that such a transaction would encounter compared to the status quo?
        tnzm 5y ago
        Ah yes, threats and bureaucracy, the go-to tools of the statist. Reminds me, more than anything else, of all the joy sparked worldwide for the better part of the 20th century by the War on Drugs. In your ideal world, is any cash transaction also "presumed guilty" (hah!) of money laundering? The real fault lies with institutions rushing to half-assedly digitize so now they're wide open to script kiddies, and with enterprise IT providers doing a piss-poor job at doing correct software engineering. And now you're suggesting more savagery like it's some sort of solution to anything at all?
        asdfasgasdgasdg 5y ago
hanklazard 5y ago
There are mechanisms to obfuscate using Bitcoin laundering services or with zksnarks-based transactions (https://zk.money https://zk.money). As much as it would be great to be able to track these funds, I think it will be increasingly impossible.
- amluto 5y ago
  Ban the exchange of laundered bitcoins and other coins, too. If laundering you non-banned coins gets them banned, your incentive to do so goes way down.
  - vmception 5y ago
    A) Use already clean money in one address to buy a token on uniswap (or any AMM) B) Use your laundered dirty money in other addresses to pump the token on uniswap (or any AMM) C) Sell the token from address in A) back into the Uniswap liquidity pool at a massive profit, enjoy the profits and reintegrated money. You look like any trader. D) Bag hold the token in the address from B) and never think about it again and never worry about trying to cash that out. In addition that address can add to the liquidity pool and provide a service to all other traders indefinitely. E) Laugh at people that are still imagining how difficult it is to launder money on public ledgers. Blockchain detectives on their wild goose chase looking at the wrong addresses. Do this all over time, and not immediately pumping a token with the laundered money. Sure, I’ll probably get more scrutiny after writing this but you won’t. I really hate chilled speech and people having dumb ideas because the should-be-obvious reality is never talked about. The point is that the trader behavior is indistinguishable from others, and there are no financial intermediaries on permissionless AMMs to flag anything.
    - amluto 5y ago
      This isn’t that different from regular (non-blockchain) money laundering. You can pick your favorite illiquid penny stock, pump it up to 10 cents, and arrange to pick up the profit on the other end. You’ll be up against various people betting against you and, if you use Uniswap between reasonably liquid tokens, you’ll also be up against arbitrageurs. With Ethereum you can, in principle, arrange to atomically pump a liquidity pool and take the profit, but doing so makes it really obvious what’s going on. And, with Ethereum, all the creative sleuths can see what’s going on and can analyze the data and find you. (This style of intentionally introducing a pricing error and arbitraging it yourself happens for real and is not always particularly profitable. You can read about the foreign exchange fixing antitrust shenanigans. Some traders thought they were being very clever, and, according to Matt Levine, made relatively small amounts of money and ended up getting seriously smacked down. The feds and the courts may be slow, but they’re not dumb.) This all seems very abstract, but, when you try to spend what you think were carefully laundered ransomware gains on a nice beach in France or Florida and Interpol or the FBI arrests you, the resulting trial and prison time will be considerably less abstract. :)
mtgx 5y ago
"Just target the big cartels". How has that worked out for the war on drugs so far? In the real world the solutions will never be this easy or perfect.

PicassoCTs 5y ago

Well, you just wait for public good will to turn into active hatred, and then voted in on that hatred, you put the hammer down on all crypto forever.

8note 5y ago

Fine all of them? Sounds like a great benefit for the government