4 ms·

> he was caught by linking fraud wallet to exchange wallet How are you supposed to turn fraudulently obtained btc into dollars without doing that?

nanidin 4y ago
I believe you can buy envelopes of cash on the darknet - though then you’re probably at high risk of receiving counterfeits or running into a sting.
- jeffy90 4y ago
  How do you get the physical envelopes of cash without detection?
  - mynameishere 4y ago
    Use someone else's address and rob their mailbox.
    - Red_Leaves_Flyy 4y ago
      Federal crime right there. Add conspiracy too.
      - chx 4y ago
        Not only it is a federal crime punishable by five years , there is a specialized police force for it, the USPS Postal Inspectors.
  - thehappypm 4y ago
    Is that really challenging? Mailing paper through the mail without getting flagged? Sending money isn’t illegal in and of itself.
- antibasilisk 4y ago
  You also have to contend with a terrible conversion rate.
  - caminante 4y ago
    "terrible"? We're talking about 1e9 orders of magnitude, here. I'll take that fraction.
    - antibasilisk 4y ago
      I've never seen a conversion rate that good on BTC-cash
- from 4y ago
  There is a reputation system on basically all p2p exchange sites, they wouldn't be able to scam for long. > running into a sting This was the basis of Operation Dark Gold. They had a ton of other evidence against the people they rounded up, I think it just helped them find targets. Receiving cash in the mail is not illegal.
dragonwriter 4y ago
> How are you supposed to turn fraudulently obtained btc into dollars without doing that? That’s the neat thing… You don’t.
- caminante 4y ago
  But AFAIK, you can launder cryptos, right? [0] [0] https://en.wikipedia.org/wiki/Cryptocurrency_tumbler# https://en.wikipedia.org/wiki/Cryptocurrency_tumbler#
  - acdha 4y ago
    You can, but this is the kind of thing which is very easy to get wrong in ways which are significant legal risks on their own. For example, if you were some random cryptobro buying personal quantities of drugs in 2015 there’s some risk but the FBI probably isn’t going to spend time on something that small. If you do anything which reveals funds going to or from a tumbler, however, the risk isn’t just KYC but also questions like who else used that tumbler - if you were participating at the same time the North Koreans or a big ransomware ring were laundering something, that traffic might be a lot more likely to get analyzed and in the worst case scenario some agents show up trying to get you to convince them that you were unwitting small fry and not hiding more. Lying to them is a federal crime, too, so even if you nothing other than tumble coins for ideological reasons you’d want to be very careful about what you say – and think about how hard it could be to prove you didn’t know the other parties in a transaction.
    - caminante 4y ago
      The topic is "laundering BTC into dollars". You're referring to the risk of getting chased down for the "bad deeds" of others after funds are co-mingled. You're not explaining that it's prohibitively risky or not possible. Further, I'm only aware of tumbling blacklisting [0], where the exchange gets blacklisted for co-mingling known dirty funds. AFAIK, there are still sizable tumbling vectors. [0] https://www.cnbc.com/2022/08/08/crypto-mixing-service-tornado-cash-blacklisted-by-treasury-department-.html https://www.cnbc.com/2022/08/08/crypto-mixing-service-tornad...
from 4y ago
I assume people involved in this sort of activity would convert to Monero first (can be done without KYC in a 100 different places). Then they would go to localmonero or a site like it and select cash in the mail. They would round to the nearest XMR at a time when transacting on localmonero so that even if the exchangers they used were compromised the government wouldn't be able to link them to the initial BTC->XMR swap based on transaction amounts.
- PeterisP 4y ago
  Not at this scale. You can do many transactions in the way that you describe and perhaps withdraw a million dollars, but you can't launder a billion dollars this way.
  - yieldcrv 4y ago
    rolls eyes Not at once He was doing it over 6 years no problem You don’t need a billion, you need a few million and he got that and it wasn’t even part of the investigation or why he got caught
paulpauper 4y ago
by simply using a third wallet that does not link the two? HIs mistake was a rookie move that could have been avoided but he got lazy. Lazy criminals make law enforcement's job easier. https://twitter.com/Rarest2012/status/1646211056782524442 https://twitter.com/Rarest2012/status/1646211056782524442
- NotYourLawyer 4y ago
  I don’t understand what the third wallet does. If the first wallet is tainted, anybody can just look to see what destination wallets it sends to and follow the trail. Adding an extra wallet doesn’t help.
  - acdha 4y ago
    This is just part of the Bitcoin sales process: any time a case gets attention showing that a common marketing claim is wrong, the sales guys come up with a reason to say it was the victim’s fault rather than a weakness of the system they’re trying to get you to buy into.
  - hanniabu 4y ago
    That's the point
  - paulpauper 4y ago
    It is not about obscuring the trail. It makes it harder to establish probable cause he orchestrated the fraud.
    - NotYourLawyer 4y ago
      That doesn’t wash. Once the feds know who he is, he’s 99% of the way to fucked.
xwdv 4y ago
Buy hard assets like real estate with the BTC then sell it off.
EVa5I7bHFq9mnYK 4y ago
Many ways. Dark valley exchanges. Flying to Dubai and exchanging any amount with draft fleeing Russians. Sending to a Lightning Network wallet, doing a few rounds within the LN and then depositing to an exchange.
yieldcrv 4y ago
He did it for 8 years and even this FBI puff piece relied on an activity in 2020 that has nothing to do with the prior 8 years of cashing out Nothing about this article suggests any breakthrough in investigative capabilities, it’s pretty embarrassing actually The government got lucky that someone was trying to get rid of something they found to be a burden in their lives

nanidin 4y ago

I believe you can buy envelopes of cash on the darknet - though then you’re probably at high risk of receiving counterfeits or running into a sting.

jeffy90 4y ago
How do you get the physical envelopes of cash without detection?
- mynameishere 4y ago
  Use someone else's address and rob their mailbox.
  - Red_Leaves_Flyy 4y ago
    Federal crime right there. Add conspiracy too.
    - chx 4y ago
      Not only it is a federal crime punishable by five years , there is a specialized police force for it, the USPS Postal Inspectors.
- thehappypm 4y ago
  Is that really challenging? Mailing paper through the mail without getting flagged? Sending money isn’t illegal in and of itself.
antibasilisk 4y ago
You also have to contend with a terrible conversion rate.
- caminante 4y ago
  "terrible"? We're talking about 1e9 orders of magnitude, here. I'll take that fraction.
  - antibasilisk 4y ago
    I've never seen a conversion rate that good on BTC-cash
from 4y ago
There is a reputation system on basically all p2p exchange sites, they wouldn't be able to scam for long. > running into a sting This was the basis of Operation Dark Gold. They had a ton of other evidence against the people they rounded up, I think it just helped them find targets. Receiving cash in the mail is not illegal.

dragonwriter 4y ago

> How are you supposed to turn fraudulently obtained btc into dollars without doing that? That’s the neat thing… You don’t.

caminante 4y ago
But AFAIK, you can launder cryptos, right? [0] [0] https://en.wikipedia.org/wiki/Cryptocurrency_tumbler# https://en.wikipedia.org/wiki/Cryptocurrency_tumbler#
- acdha 4y ago
  You can, but this is the kind of thing which is very easy to get wrong in ways which are significant legal risks on their own. For example, if you were some random cryptobro buying personal quantities of drugs in 2015 there’s some risk but the FBI probably isn’t going to spend time on something that small. If you do anything which reveals funds going to or from a tumbler, however, the risk isn’t just KYC but also questions like who else used that tumbler - if you were participating at the same time the North Koreans or a big ransomware ring were laundering something, that traffic might be a lot more likely to get analyzed and in the worst case scenario some agents show up trying to get you to convince them that you were unwitting small fry and not hiding more. Lying to them is a federal crime, too, so even if you nothing other than tumble coins for ideological reasons you’d want to be very careful about what you say – and think about how hard it could be to prove you didn’t know the other parties in a transaction.
  - caminante 4y ago
    The topic is "laundering BTC into dollars". You're referring to the risk of getting chased down for the "bad deeds" of others after funds are co-mingled. You're not explaining that it's prohibitively risky or not possible. Further, I'm only aware of tumbling blacklisting [0], where the exchange gets blacklisted for co-mingling known dirty funds. AFAIK, there are still sizable tumbling vectors. [0] https://www.cnbc.com/2022/08/08/crypto-mixing-service-tornado-cash-blacklisted-by-treasury-department-.html https://www.cnbc.com/2022/08/08/crypto-mixing-service-tornad...

from 4y ago

I assume people involved in this sort of activity would convert to Monero first (can be done without KYC in a 100 different places). Then they would go to localmonero or a site like it and select cash in the mail. They would round to the nearest XMR at a time when transacting on localmonero so that even if the exchangers they used were compromised the government wouldn't be able to link them to the initial BTC->XMR swap based on transaction amounts.

PeterisP 4y ago
Not at this scale. You can do many transactions in the way that you describe and perhaps withdraw a million dollars, but you can't launder a billion dollars this way.
- yieldcrv 4y ago
  rolls eyes Not at once He was doing it over 6 years no problem You don’t need a billion, you need a few million and he got that and it wasn’t even part of the investigation or why he got caught

paulpauper 4y ago

by simply using a third wallet that does not link the two? HIs mistake was a rookie move that could have been avoided but he got lazy. Lazy criminals make law enforcement's job easier. https://twitter.com/Rarest2012/status/1646211056782524442 https://twitter.com/Rarest2012/status/1646211056782524442

NotYourLawyer 4y ago
I don’t understand what the third wallet does. If the first wallet is tainted, anybody can just look to see what destination wallets it sends to and follow the trail. Adding an extra wallet doesn’t help.
- acdha 4y ago
  This is just part of the Bitcoin sales process: any time a case gets attention showing that a common marketing claim is wrong, the sales guys come up with a reason to say it was the victim’s fault rather than a weakness of the system they’re trying to get you to buy into.
- hanniabu 4y ago
  That's the point
- paulpauper 4y ago
  It is not about obscuring the trail. It makes it harder to establish probable cause he orchestrated the fraud.
  - NotYourLawyer 4y ago
    That doesn’t wash. Once the feds know who he is, he’s 99% of the way to fucked.

xwdv 4y ago

Buy hard assets like real estate with the BTC then sell it off.

EVa5I7bHFq9mnYK 4y ago

Many ways. Dark valley exchanges. Flying to Dubai and exchanging any amount with draft fleeing Russians. Sending to a Lightning Network wallet, doing a few rounds within the LN and then depositing to an exchange.

yieldcrv 4y ago

He did it for 8 years and even this FBI puff piece relied on an activity in 2020 that has nothing to do with the prior 8 years of cashing out Nothing about this article suggests any breakthrough in investigative capabilities, it’s pretty embarrassing actually The government got lucky that someone was trying to get rid of something they found to be a burden in their lives