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Canada Is Ordering Crypto Exchanges to Blacklist ‘Freedom Convoy’ Addresses

24 points by ttyp3 5y ago

cato_the_elder 5y ago
I think merely blacklisting a list of bitcoin addresses doesn't do much. There is no limit on creating new ones.
- bitxbitxbitcoin 5y ago
  Once a Bitcoin address is blacklisted, so are any addresses associated with it thereafter. You can create as many Bitcoin addresses as you like, but once they receive bitcoins from a blacklisted address you are no longer allowed to cash out at these centralized off ramps we call exchanges. As in, if you send from your blacklist associated address to the exchange’s address - they will KYC you.
  - ashwagary 5y ago
    The best approach is to attempt to taint all circulating bitcoin using coinjoins and other mixing services. Let Canada shoot its centralized crypto industry in the foot and push everyone to dexes.
  - nybble41 5y ago
    In practice if they applied that "tainted address" logic strictly it would empower anyone who controls a blacklisted address to take down the entire system just by sending small amounts unsolicited to random addresses. Or not-so-random addresses—nothing prevents anyone from "donating" some crypto to, say, the address where Coinbase keeps customers' funds, thus "tainting" every withdrawal from that exchange. It's also relatively easy to escape this sort of analysis by exchanging the coins somewhere outside the jurisdiction where they're blacklisted. A simple swap like Bitcoin → Monero → Bitcoin is enough to seriously complicate any attempt to trace the resulting coins back to a blacklisted address. Still, keeping these donation in publicly-known receiving addresses wasn't exactly smart. A better system would be to use a different address for each donation. That would have made it difficult to identify any address to blacklist in the first place, and even if any were blacklisted the rest would remain protected (provided you don't spend them in the same transaction).
    - tromp 5y ago
      > nothing prevents anyone from "donating" some crypto to, say, the address where Coinbase keeps customers' funds, thus "tainting" every withdrawal from that exchange. Coinbase keeps customer's funds in a set of utxo's with many different addresses, and know which of those are tainted and untainted. Withdrawals can be expected to come from spending untainted ones. Your proposed donation will just add a tainted utxo to the set which won't be credited to anyone's balance and won't be spent for withdrawals.
      - nybble41 5y ago
        You assume Coinbase keeps track of which addresses are considered "tainted" in every jurisdiction world-wide, in real-time. It's not as if there is a single list, and if you're doing something risky you could transfer a portion to Coinbase, or perhaps another service which isn't so rigorous about tracking specific UTxOs, in hopes that they mix it with their other funds before it ends up on any blacklist. Coinbase naturally has a custom system but most wallets do not show UTxOs at all—just totals. If the funds are available they have a chance of being used.
        tromp 5y ago
        I assume they have enough buffers that just-received outputs don't have to be spent on withdrawals for quite awhile, giving them time to subject it to taint analysis.
        nybble41 5y ago
        Coinbase might, but there are plenty of other high-profile targets who are unlikely to perform any "taint analysis" on the contents of their wallet. Like I said, most wallet software doesn't even present UTxOs as distinct entities in the UI. Anything sent to that address is considered fair game to be used as an input for the next transaction.
cyanydeez 5y ago
i think this is good. exchanges are giving cover to the more fraudulent nature of dryprocurrencies.
copperwater69 5y ago
I just googled "celebrity crypto wallet addresses" and found these: Jay-z Mike Tyson Stephen Curry Steve Aoki Lindsey Lohan Mark Cuban Snoop dogg Neymar Kevin Hart Serena Williams Eminem Paris Hilton etc Would be amazing to march around with these addresses on a cardboard sign asking for donations only to get them blacklisted.
d13 5y ago
Very entertaining https://web3isgoinggreat.com/?id=2022-02-14-2 https://web3isgoinggreat.com/?id=2022-02-14-2

24 points by ttyp3 5y ago

cato_the_elder 5y ago

I think merely blacklisting a list of bitcoin addresses doesn't do much. There is no limit on creating new ones.

bitxbitxbitcoin 5y ago
Once a Bitcoin address is blacklisted, so are any addresses associated with it thereafter. You can create as many Bitcoin addresses as you like, but once they receive bitcoins from a blacklisted address you are no longer allowed to cash out at these centralized off ramps we call exchanges. As in, if you send from your blacklist associated address to the exchange’s address - they will KYC you.
- ashwagary 5y ago
  The best approach is to attempt to taint all circulating bitcoin using coinjoins and other mixing services. Let Canada shoot its centralized crypto industry in the foot and push everyone to dexes.
- nybble41 5y ago
  In practice if they applied that "tainted address" logic strictly it would empower anyone who controls a blacklisted address to take down the entire system just by sending small amounts unsolicited to random addresses. Or not-so-random addresses—nothing prevents anyone from "donating" some crypto to, say, the address where Coinbase keeps customers' funds, thus "tainting" every withdrawal from that exchange. It's also relatively easy to escape this sort of analysis by exchanging the coins somewhere outside the jurisdiction where they're blacklisted. A simple swap like Bitcoin → Monero → Bitcoin is enough to seriously complicate any attempt to trace the resulting coins back to a blacklisted address. Still, keeping these donation in publicly-known receiving addresses wasn't exactly smart. A better system would be to use a different address for each donation. That would have made it difficult to identify any address to blacklist in the first place, and even if any were blacklisted the rest would remain protected (provided you don't spend them in the same transaction).
  - tromp 5y ago
    > nothing prevents anyone from "donating" some crypto to, say, the address where Coinbase keeps customers' funds, thus "tainting" every withdrawal from that exchange. Coinbase keeps customer's funds in a set of utxo's with many different addresses, and know which of those are tainted and untainted. Withdrawals can be expected to come from spending untainted ones. Your proposed donation will just add a tainted utxo to the set which won't be credited to anyone's balance and won't be spent for withdrawals.
    - nybble41 5y ago
      You assume Coinbase keeps track of which addresses are considered "tainted" in every jurisdiction world-wide, in real-time. It's not as if there is a single list, and if you're doing something risky you could transfer a portion to Coinbase, or perhaps another service which isn't so rigorous about tracking specific UTxOs, in hopes that they mix it with their other funds before it ends up on any blacklist. Coinbase naturally has a custom system but most wallets do not show UTxOs at all—just totals. If the funds are available they have a chance of being used.
      - tromp 5y ago
        I assume they have enough buffers that just-received outputs don't have to be spent on withdrawals for quite awhile, giving them time to subject it to taint analysis.
        nybble41 5y ago
        Coinbase might, but there are plenty of other high-profile targets who are unlikely to perform any "taint analysis" on the contents of their wallet. Like I said, most wallet software doesn't even present UTxOs as distinct entities in the UI. Anything sent to that address is considered fair game to be used as an input for the next transaction.

cyanydeez 5y ago

i think this is good. exchanges are giving cover to the more fraudulent nature of dryprocurrencies.

copperwater69 5y ago

I just googled "celebrity crypto wallet addresses" and found these: Jay-z Mike Tyson Stephen Curry Steve Aoki Lindsey Lohan Mark Cuban Snoop dogg Neymar Kevin Hart Serena Williams Eminem Paris Hilton etc Would be amazing to march around with these addresses on a cardboard sign asking for donations only to get them blacklisted.

d13 5y ago

Very entertaining https://web3isgoinggreat.com/?id=2022-02-14-2 https://web3isgoinggreat.com/?id=2022-02-14-2