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Bitcoin stolen from FTX being converted to cash via "mixer"
- eh_why_not 3y agoWikipedia article for a crypto mixer: https://en.wikipedia.org/wiki/Cryptocurrency_tumbler https://en.wikipedia.org/wiki/Cryptocurrency_tumbler
- kylebenzle 3y agoThe only surprise will be if the criminal is not linked to SBF
- Analemma_ 3y agoEveryone keeps saying this like it's obviously true, but it's not obvious to me at all, and on a betting market I'd lay down good money that it's someone totally unrelated to FTX. SBF and everyone connected to him are under very close surveillance right now; if you knew him at all it would be stupid to think you could get away with this. To me the much more likely scenario is that somebody had a persistent backdoor into FTX because it was a shitshow with no security, but they didn't act right away because they were waiting for the prize to get even bigger. But then when it all started imploding, they realized it was now-or-never and made their move.
- paulpauper 3y agoexactly. why would Sam need to hack his own exchange anyway when being CEO literally has the keys to every wallet?
- throwaway9274 3y agoPlausible deniability.
- lacrimacida 3y agoYes, being hacked is an easy excuse to siphoning the funds away, laundering it with these services and cashing it out on the other side of the world.
- throwaway9274 3y agoThe Dread Pirate Roberts ordered passports on his own illegal website. Smart criminals do stupid stuff all the time. It would not surprise me at all if this is SBF or another insider’s insurance plan in action.
- plagiarist 3y agoWhere is one supposed to get fake identification passports from? Or, like, was this with the same username he was trying to hire hitmen with, so he's linking a photo of himself to the attempted murder?
- paulpauper 3y agoDPR ... a one-man how-to guide on how NOT to be a cybercriminal
- denton-scratch 3y ago> if you knew him at all it would be stupid to think you could get away with this. You don't have to know him; he's made it clear that he thinks rules are for fools.
- jncfhnb 3y agoWhy do you think SBF would not do something stupid?
- infecto 3y agoIt could go either way. I get the impression that SBF is extremely intelligent but perhaps in a way where he is naive to failure and shoots from the hip a lot.
- dboreham 3y agoSomeone getting arrested in a Starbucks in 3...2...1...seconds.
- anonym29 3y agoIn all likelihood, it's possible, if not probable, that the culprit may be residing in a jurisdiction that openly refuses to cooperate with international law enforcement. The guys on the other side of this kind of stuff being caught at all is the exception, not the norm.
- ofslidingfeet 3y agoNever give up an opportunity to demonize real monetary systems, the good guys. Be venture capitalist depositing millions in uninsured capital at your VC bank while completely ignoring interest rate risk because you think your buddies can just bully the federal government: Win infinity free insurance from the U.S. Treasury. Store capital in the new technology receiving tacit endorsement from the establishment via institutional buy-in, super bowl ads, etc.: Go bankrupt and then get gloated at by a bunch of midwit redditors.
- throwaway9274 3y agoBoth made bad decisions and should lose their money and be mocked by midwit redditors. The difference is FTX was criminal negligence, SVB ordinary negligence. SVB was due to bad bets the bank was legally allowed to make, FTX was due to bad bets made illegally with stolen money.
- ofslidingfeet 3y agoThe federal reserve's plans to hike interest rates were never, at any point, a secret.
- FireBeyond 3y agoTo me, Peter Thiel was "the one that got away" when it came to SVB. Yes, it was known that SVB had some "concerns", but Thiel, like Nostradamus, laid out an amazingly specific set of instructions to companies he had a hand (or dollar) in: Wednesday after hours he sent a missive to all his funded companies: "Every single dollar of your company accounts must be out of SVB by COB tomorrow". Separately, to another one of his companies: "I need you to have a website setup that can accept applications for business bridge loans, I and it needs to be pushed and live by noon on Friday". Lo and behold, regulators showed up at SVB at 9am on Friday morning and the doors were locked by 11am. Very remarkably specific, and fortuitous timing by Thiel. Even if he did have specific information, some might say, so what? He has a right to protect his money, and money he has invested. Sure he does. But "withdraw all of your money from SVB and do it tomorrow by COB" caused a bank run. And causing a bank run is a federal felony. For which no-one will bat an eyelid.
- paulpauper 3y agoa mixer does not convert to cash. it converts/swaps old btc to new btc by attempting to obfuscate there trail
- Waterluvian 3y agoSo “mixer” quite literally as “launder”?
- lacrimacida 3y agoSeems so. I wonder how such thing can be legal…
- anonym29 3y agoTypically they aren't. Unfortunately, laws are not magic spells that prevent activity from happening, they merely provide penalties for those caught breaking them.
- hiatus 3y agoUnfortunately? It's rather fortunate that that's not the case, as man is fallible and the law is not absolute.
- dale_glass 3y agoIt's not quite the same thing, but similar. In money laundering you're introducing dirty money into a legal looking business. You pretend that you washed more shirts or cars than you truly did, for instance. You pay tax, and from the outside it looks like you have a fully legit, profitable business. On BTC, all transactions are public and traceable. You see Alice pay Bob $50. You see Carol pay Dave $25. You see Eve pay Dave $25. A mixer is an intermediary that makes it less obvious who's dealing with who. Everyone puts money into the pool, the mixer at some points sends payments to the destinations, and it becomes harder to tell who's transacting with who. A mixer can take extra steps to confuse things further, like delaying payments and doing everything in chunks of say $5 at random delays, and rounding amounts, so it's harder to tell from the outside how many transactions there were, and to correlate an input of an odd amount of $123.45 with an equal output. Some mixers offer swapping for freshly mined coins for a higher fee. Unlike laundering, it doesn't really make a transaction look legit. You see Alice send $50 to a mixer, but it's harder to tell who it was truly for.
- earnesti 3y agoI wonder how often they freeze accounts, and it is the wrong person, but he is also doing something illegal or shady and can't provide proof of funds so the funds remain locked.
- paulpauper 3y agoThis was heavily discussed yesterday. I am willing to wager it is not SBF and the culprit, if he's ever found, liekly resides in a developed country, similar to the Bitfinex case . It's not Russia or North Korea.
- lacrimacida 3y agoIts clearly not SBF himself since he’s under the lens of justice, but it could as well be someone connected to him.
- anonym29 3y agoWhat are the reasons you're confident that it isn't Russia or Best Korea?
- bradleyjg 3y agoSince it’s not cash the stolen bitcoins are personal goods. Stolen goods are subject to forfeiture wherever found, even from a bona fide purchaser for value.
- anonym29 3y agoBitcoin is borderless, laws are not.
- deleted 3y ago[deleted]
- lxgr 3y agoWhat about mixers (or just regular Bitcoin transactions with both stolen and non-stolen inputs), though? Which coins remain “tainted” – none, all, or the same amount that went in tainted? But which?
- bradleyjg 3y agoI don’t know exactly how mixers work but my understanding is that that I can identify even fractions of a coin as having originated from some parent coin. All those fractions are stolen goods.
- bigyikes 3y agoThe coins are fungible, right? So the notion of a “a coin” doesn’t even make sense to me — they’re just numbers in a database. Let’s say we send 1 clean BTC to address A and 1 dirty BTC also to address A. Are both those coins now tainted? If we then send 1 BTC from address A to address B, and 1 BTC from address A to address C, who has the dirty coin? Is it B, C, both, neither?
- bradleyjg 3y agoI didn’t think they were fungible but it’s a long time since I read the paper.
- ginko 3y agoI still don't understand how crypto mixers are supposed to work. Surely if you dump stolen crypto into a mixer with other bitcoins then all of it can and should be treated as tainted.
- TrapLord_Rhodo 3y agobtc's aren't real. There is no such thing as a bitcoin. It's just a ledger system, so if you can hide/ or obfuscate the wallet address the btc are pointing to, you can hide the transaction history. Now this involves transfering BTC for another asset and then purchasing clean bitcoin on the otherside with a headless transaction in the middle. A random number of different wallets, and ledger entry's but it's all the same to the user.
- _cenw 3y agoSure, it's more obfuscation than money laundering, but it can still make it hard to trace given sufficient participants. One big part is also splitting up a big single wallet into lots of smaller ones, so now you need to differentiate your privacy freak from your marketplace consumer from your small time marketplace seller from people you actually want to catch. You can also repeat the process. Eventually the traces become hard to follow, especially when the person only uses relatively small fragments from the output.
- paulpauper 3y agoplausible deniability
- searchableguy 3y agoI don't know about bitcoin but for Ethereum, many big mixers were funded by advocates for privacy. So there is deniability if you mix your illegal proceeds with legimate ones. It's not much different from cash in a way. It's also possible to remove the link to mixer if you bridge on the Ethereum side. So you would have a wallet with a different currency with no link back to where it came from.
- mprime1 3y agoIt often is. I had my PayPal personal account immediately frozen and closed without recourse just for (unintentionally) putting a few hundred dollars of bitcoin through a mixer. 1. Purchased $200 of Bitcoin via PayPal (never doing this again — took weeks to settle) 2. Created a receiving wallet address with a wallet app 3. Moved Bitcoin from PayPal to new wallet address. This was innocuous, I wasn’t trying to cover my tracks in any way. What I didn’t know is that the wallet had an automatic tumbling feature, so the money I put in got mixed. And PayPal immediately closed my account. Tried every way to get it back but no dice. All funds frozen for 6 months before I could redeem them. So yes using a mixer can get you tainted.
- _lvbh 3y agoI don’t understand why they don’t put the money into an exchange and convert to Monero and then launder it.
- EA-3167 3y agoFor the sane reason thieves don't just hand everything over to a fence? They know better than to stick their stolen earnings on a place where other thieves can steal it.
- _l219 3y agoThere are p2p exchanges that are legitimate and actually decentralized. They can easily convert their traceable bitcoin to untraceable Monero over a few years and they’ll have enough to live off of for years.
- paulpauper 3y agothe monero market is not big enough to accommodate such a large amount of $
- mdhen 3y ago2.8 billion market cap. So a quarter the size of bitcoin. Not sure why you think that wouldnt work.