5 ms·

It can almost always be easily traced to a particular person. if you're using it, you probably bought it from somewhere and spent it somewhere. Mixers/coinjoins

It can almost always be easily traced to a particular person. if you're using it, you probably bought it from somewhere and spent it somewhere. Mixers/coinjoins can launder it but it is risk-prone and time-consuming, and a redflag.

stef25 5y ago
> It can almost always be easily traced to a particular person Once KYC gets involved. If I receive coins in my desktop wallet for the cookies I'm selling, how will anyone know who I am? Of course they're not much use until I cash out and then it's a different story.
- sennight 5y ago
  > Of course they're not much use until I cash out... Or you could use the currency as a currency. Sure, there are a lot more flour suppliers who exclusively accept USD vs ones that take BTC - but compared to the way things were 10 years ago...
  - xorcist 5y ago
    "Cashing out" doesn't necessarily mean dollars. Try to buy a Tesla or a house anonymously. All large transactions are subject to KYC.
    - sennight 5y ago
      It sounds like your definition of "cashing out" means "do anything that has historically involved counterparty risk". Unless you really think a warehouse manager would insist on carding you for several pallets of dishwashing detergent...
      - ajkdhcb2 5y ago
        I tried to pay BTC for a very small electronics purchase recently and the payment processor BitPay literally demanded passport information
        sennight 5y ago
        > ...pay BTC...payment processor It sounds to me like you tried to purchase from a seller who expected to be paid in USD, not BTC (which doesn't need a "processor"). Do you really not know why this is a silly complaint - especially given the context?
      - curryst 5y ago
        That sounds like exactly the kind of thing that raises some eyes. You usually need some form of distributor's license to not have to pay sales tax on the transaction. That license requires identification. Of course you could refuse that and just pay the sales tax, but who does that? I would be a little surprised if they even had the means to do it. Warehouses normally sell to distributors, who have distributor's licenses so they don't pay sales tax. Why would they have a system to collect sales tax and send it to the government? That transaction is going to stand out, a lot. Trying to pay for it in Bitcoin is only going to make it worse. Unless, of course, you're trying to pay the warehouse manager to help you steal the dishwashing detergent. There's no papertrail, but remarkably high counterparty risk. Plus at the end you're stuck with a bunch of hot dishwashing detergent that you're going to have to offload.
        sennight 5y ago
        Having worked for a company that did a lot of contract work for small-item/high-value RMA (which regularly gets sold to 2nd tier outlets), drop shipping, LTL freight, etc: it was totally normal for a rental box truck to roll up to the dock and get loaded after the driver presented an invoice matching what was on record. What tax jurisdiction was being operated under or level of needless personal data collection happened before that was up to whoever ran whichever digital storefront they used, all the shipping dock cared about was the invoice number. I don't know what incentive anyone would have had to give the purchaser the third degree - assuming the risk of a clawback was mitigated... so they'd doubly not care about a BTC based sale. Way back in the day I took some profit by purchasing something like $50k in server hardware that needed to be bought one way or the other. Nothing but a "ship to" address and a BTC private key. Was I trying to secretly launder money? Nope, just a boring business transaction that didn't involve VISA. Was it to cheat the tax man? Nope, the IRS had very pointed refused to issue tax guidance up to that point (and continued to do so for years) - so I just paid the long term capital gains when doing the other paperwork one does in a self funded a business venture. I always wonder about the people who assume cryptocurrency is something that needs a level of law enforcement scrutiny beyond any other method of payment, how much misinformation was required to yield that result, and if they'll be able to adapt to the inevitable.
- deleted 5y ago
  [deleted]
- kadoban 5y ago
  By finding someone you sold to and asking them nicely. You're not just dependent on your own opsec, you also have to worry about anyone you receive from or send to.
  - stef25 5y ago
    Not really an option for these underground cookie markets. The seller on the other hand does have people's details because they need to send the goods somewhere. The buyer would have no idea who he's dealing with.
- almostkorean 5y ago
  How do you get the coins out without KYC?
  - capeterson 5y ago
    Overnighted cash drops to a PO box are fairly reliable. Localbitcoins and its spinoffs used to be a popular option, but it seems they're a shell of their former selves. It's definitely a lot more difficult nowadays, though.
    - ajkdhcb2 5y ago
      It is easier now afaik. Localbitcoins itself is essentially deprecated but there are always alternatives, and a lot more people now than there were in 2013 and so
    - rtkwe 5y ago
      > Localbitcoins and its spinoffs used to be a popular option, but it seems they're a shell of their former selves It's because KYC requirements and money changing regulation were applied to people selling btc in any real quantity. Someone I knew caught a case a few years ago for doing essentially the localbitcoin (and not telling the undercover to leave when the cop implied he got the money from selling drugs... allegedly).
  - stef25 5y ago
    It's pretty straightforward until you get to 6 figure sums but even then criminal enterprises can find ways around it.
- godelski 5y ago
  > If I receive coins in my desktop wallet for the cookies I'm selling, how will anyone know who I am? If I bought cookies from you and paid with crypto you have to know the address I want you to send the cookies to. Or I have to pick them up in person and you'll see me. Either case greatly reduces anonymity. This vulnerability doesn't exactly exist for all crypto. Privacy coins aren't necessarily unique (or at least for practical purposes). The uniqueness of the coin is what allows it to be tracked. That's why we know where the GOX coins are and this is why that hacker can't use those coins. As soon as they try to turn that into real money we got 'em.
  - karottenreibe 5y ago
    The question wasn't whether sender and receiver know each other but whether the government can find out both. Totally different scenario.
  - AnthonyMouse 5y ago
    > That's why we know where the GOX coins are and this is why that hacker can't use those coins. As soon as they try to turn that into real money we got 'em. What stops them from converting the coins into something else (e.g. some other cryptocurrency or commodity) in a jurisdiction that doesn't do KYC, and then converting that into dollars? Or just dumping it into a cryptocurrency tumbler? The whole concept of tracing the source of money is kind of ridiculous. If somebody robs a bank and the bank robber buys a shoe and the shoemaker buys a cake and the baker buys a portrait and the artist buys a screw driver and the hardware store owner deposits the money with that serial number in the bank, the hardware store owner has really nothing to do with the bank robbery, and isn't going to remember which of their thousand customers paid them with that specific bill. And if you try to say the hardware store owner doesn't get to keep the money all you're doing is causing the money to be stolen twice.
  - stef25 5y ago
    The sender knows where the recipient is but not the other way round. The recipient can see where the package was posted from but that doesn't necessarily mean the seller lives there.
  - 5y ago
- ajkdhcb2 5y ago
  Info only needs to be involved once. It's a big ask to obtain and dispose of the coins while maintaining anonymity at every step. Buy one item an online store to your IRL address and then it might propagate through all your wallets. It doesn't really need to be KYC, just your name or email or address etc... Even IP address
yreg 5y ago
And if those 'somewheres' where you bought it and spent it don't know who you are there is little to trace.

stef25 5y ago

> It can almost always be easily traced to a particular person Once KYC gets involved. If I receive coins in my desktop wallet for the cookies I'm selling, how will anyone know who I am? Of course they're not much use until I cash out and then it's a different story.

sennight 5y ago
> Of course they're not much use until I cash out... Or you could use the currency as a currency. Sure, there are a lot more flour suppliers who exclusively accept USD vs ones that take BTC - but compared to the way things were 10 years ago...
- xorcist 5y ago
  "Cashing out" doesn't necessarily mean dollars. Try to buy a Tesla or a house anonymously. All large transactions are subject to KYC.
  - sennight 5y ago
    It sounds like your definition of "cashing out" means "do anything that has historically involved counterparty risk". Unless you really think a warehouse manager would insist on carding you for several pallets of dishwashing detergent...
    - ajkdhcb2 5y ago
      I tried to pay BTC for a very small electronics purchase recently and the payment processor BitPay literally demanded passport information
      - sennight 5y ago
        > ...pay BTC...payment processor It sounds to me like you tried to purchase from a seller who expected to be paid in USD, not BTC (which doesn't need a "processor"). Do you really not know why this is a silly complaint - especially given the context?
    - curryst 5y ago
      That sounds like exactly the kind of thing that raises some eyes. You usually need some form of distributor's license to not have to pay sales tax on the transaction. That license requires identification. Of course you could refuse that and just pay the sales tax, but who does that? I would be a little surprised if they even had the means to do it. Warehouses normally sell to distributors, who have distributor's licenses so they don't pay sales tax. Why would they have a system to collect sales tax and send it to the government? That transaction is going to stand out, a lot. Trying to pay for it in Bitcoin is only going to make it worse. Unless, of course, you're trying to pay the warehouse manager to help you steal the dishwashing detergent. There's no papertrail, but remarkably high counterparty risk. Plus at the end you're stuck with a bunch of hot dishwashing detergent that you're going to have to offload.
      - sennight 5y ago
        Having worked for a company that did a lot of contract work for small-item/high-value RMA (which regularly gets sold to 2nd tier outlets), drop shipping, LTL freight, etc: it was totally normal for a rental box truck to roll up to the dock and get loaded after the driver presented an invoice matching what was on record. What tax jurisdiction was being operated under or level of needless personal data collection happened before that was up to whoever ran whichever digital storefront they used, all the shipping dock cared about was the invoice number. I don't know what incentive anyone would have had to give the purchaser the third degree - assuming the risk of a clawback was mitigated... so they'd doubly not care about a BTC based sale. Way back in the day I took some profit by purchasing something like $50k in server hardware that needed to be bought one way or the other. Nothing but a "ship to" address and a BTC private key. Was I trying to secretly launder money? Nope, just a boring business transaction that didn't involve VISA. Was it to cheat the tax man? Nope, the IRS had very pointed refused to issue tax guidance up to that point (and continued to do so for years) - so I just paid the long term capital gains when doing the other paperwork one does in a self funded a business venture. I always wonder about the people who assume cryptocurrency is something that needs a level of law enforcement scrutiny beyond any other method of payment, how much misinformation was required to yield that result, and if they'll be able to adapt to the inevitable.
deleted 5y ago
[deleted]
kadoban 5y ago
By finding someone you sold to and asking them nicely. You're not just dependent on your own opsec, you also have to worry about anyone you receive from or send to.
- stef25 5y ago
  Not really an option for these underground cookie markets. The seller on the other hand does have people's details because they need to send the goods somewhere. The buyer would have no idea who he's dealing with.
almostkorean 5y ago
How do you get the coins out without KYC?
- capeterson 5y ago
  Overnighted cash drops to a PO box are fairly reliable. Localbitcoins and its spinoffs used to be a popular option, but it seems they're a shell of their former selves. It's definitely a lot more difficult nowadays, though.
  - ajkdhcb2 5y ago
    It is easier now afaik. Localbitcoins itself is essentially deprecated but there are always alternatives, and a lot more people now than there were in 2013 and so
  - rtkwe 5y ago
    > Localbitcoins and its spinoffs used to be a popular option, but it seems they're a shell of their former selves It's because KYC requirements and money changing regulation were applied to people selling btc in any real quantity. Someone I knew caught a case a few years ago for doing essentially the localbitcoin (and not telling the undercover to leave when the cop implied he got the money from selling drugs... allegedly).
- stef25 5y ago
  It's pretty straightforward until you get to 6 figure sums but even then criminal enterprises can find ways around it.
godelski 5y ago
> If I receive coins in my desktop wallet for the cookies I'm selling, how will anyone know who I am? If I bought cookies from you and paid with crypto you have to know the address I want you to send the cookies to. Or I have to pick them up in person and you'll see me. Either case greatly reduces anonymity. This vulnerability doesn't exactly exist for all crypto. Privacy coins aren't necessarily unique (or at least for practical purposes). The uniqueness of the coin is what allows it to be tracked. That's why we know where the GOX coins are and this is why that hacker can't use those coins. As soon as they try to turn that into real money we got 'em.
- karottenreibe 5y ago
  The question wasn't whether sender and receiver know each other but whether the government can find out both. Totally different scenario.
- AnthonyMouse 5y ago
  > That's why we know where the GOX coins are and this is why that hacker can't use those coins. As soon as they try to turn that into real money we got 'em. What stops them from converting the coins into something else (e.g. some other cryptocurrency or commodity) in a jurisdiction that doesn't do KYC, and then converting that into dollars? Or just dumping it into a cryptocurrency tumbler? The whole concept of tracing the source of money is kind of ridiculous. If somebody robs a bank and the bank robber buys a shoe and the shoemaker buys a cake and the baker buys a portrait and the artist buys a screw driver and the hardware store owner deposits the money with that serial number in the bank, the hardware store owner has really nothing to do with the bank robbery, and isn't going to remember which of their thousand customers paid them with that specific bill. And if you try to say the hardware store owner doesn't get to keep the money all you're doing is causing the money to be stolen twice.
- stef25 5y ago
  The sender knows where the recipient is but not the other way round. The recipient can see where the package was posted from but that doesn't necessarily mean the seller lives there.
- 5y ago
ajkdhcb2 5y ago
Info only needs to be involved once. It's a big ask to obtain and dispose of the coins while maintaining anonymity at every step. Buy one item an online store to your IRL address and then it might propagate through all your wallets. It doesn't really need to be KYC, just your name or email or address etc... Even IP address

yreg 5y ago

And if those 'somewheres' where you bought it and spent it don't know who you are there is little to trace.