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It's extremely simple until it's not. Let's say you bought 100$ worth of BTC back in 2012 with cash at a meetup. Now it’s worth $1M, but you can't prove its ori

It's extremely simple until it's not. Let's say you bought 100$ worth of BTC back in 2012 with cash at a meetup. Now it’s worth $1M, but you can't prove its origin. You now have a perfectly law-abiding person that risks being accused of "money laundering" just to keep what's rightfully theirs.

XorNot 1y ago
Bitcoin literally has an immutable transaction record baked into it's model. You would be able to point to the timestamp when you took possession of the wallet which would prove providence unambiguously.
- mothballed 1y ago
  There's no KYC to take possession of a wallet, how would you prove the wallet wasn't just traded to you (maybe even yesterday) instead of moving the bitcoins?
  - ajross 1y ago
    AML statutes don't invert the burden of proof! If the government wants to prosecute you for taking money, they still have to prove you took the money beyond a reasonable doubt. I'm always amused by the paranoia in the xxxcoin communities. If the government had and exercised the power you believe it does, why on earth do you think putting your money in bitcoin or whatever would provide any protection at all? Edit: case in point: > KYC and AML invert the burden of proof and are essentially an exception to the 4th amendment Oooph.
    - mothballed 1y ago
      KYC and AML invert the burden of proof and are essentially an exception to the 4th amendment, that's why they're so controversial. I tried to open a bank account when I was moving states before I had a local state ID or any utility bill or proof of address, no one would do it because they stated the standard the feds hold them to for KYC would essentially presume I am guilty of lying and require me to provide documentation to prove I'm not.
    - lcnPylGDnU4H9OF 1y ago
      > If the government wants to prosecute you Their point is that the government does not prosecute you, they threaten the banks with "regulatory incidents" if they don't comply. The result is that some people find it difficult to ever open a bank account with no means to "clear their name" as it were.
      - ajross 1y ago
        That doesn't seem to be a point made upthread in the chain to which I was responding. The contention was that people could lose assets or be prosecuted. And no, they can't, that's ridiculous.
        mothballed 1y ago
        I follow some forums on international banking from time to time, occasionally I read the story of the guy who's deposits got AML flagged so they simply cut him a check, of course after they put him on world-check or some other banking black flag database that prevents him from depositing the check anywhere else. In that case in theory they don't lose their assets, but I have no idea what happens next.
        ajross 1y ago
        Seems like that would be a good anecdote to cite and not "I read it once on some forum", no? I mean... come on. Yes, it's possible it went down like that in a way that confirms all your libertarian priors about government overreach or whatnot. But given the sourcing, my money is on "Some rube got roped into taking 'payment' as part of a laundering scheme and was left holding the bag". Real fraud is rampant and pervasive. Libertarian fantasies are usually just that.
        mothballed 1y ago
        There's a poster on here called 'rabite' more commonly known as 'weev' who claims he was cut off entirely from the banking system despite being nominally innocent in the USA (he also claims he hates libertarians so I presume it's not part of a libertarian conspiracy). IIRC he moved to Transnistria (which has very loose money controls and basically controlled by the mob) and then bought apartments in Ukraine via cryptocurrency. Getting your account shut down and then receiving a check is definitely a real thing, if you're someone like 'weev' idk what you would do next, but it seems like he found one of the few ways around it. He has no valid serious convictions that I'm aware of, the only one he has was reversed because it was prosecuted in the wrong jurisdiction (and aside, had some other serious appellate arguments to consider if they hadn't chosen jurisdiction as the reason to vacate).
- olalonde 1y ago
  That works until it does not. What if you transferred the BTC to other wallets or exchanges in the meanwhile? Even if you still had access to the original wallet, what proves that it was really yours? etc.
  - multjoy 1y ago
    Unless you’re using mixers then it is relatively trivial to follow your BTC around the blockchain. That is the very point of it. The issue of provenance is an issue regardless of the type of funds. In most jurisdictions the burden of proof is civil, so more likely than not.
    - olalonde 1y ago
      Sure, you can trace the full transaction history of any BTC through the blockchain... but that doesn't prove anything. At minimum, you need all the private keys involved (e.g. not possible if you used an exchange or deposited/withdrew from some online service or lost/deleted an old wallet). Even if you had the full list of private keys involved, going back to 2012, what proves that they were really yours and, like another commenter pointed out, that you didn't just acquire them yesterday?
      - XorNot 1y ago
        Which is a more complicated scenario then originally claimed, which was "I bought a $100 of BTC in cash many years ago and held onto it since then". If you cashed out that BTC via an exchange for example, then there will be bank transaction records showing you did but also welcome to "you were likely due taxes on your gains in the interim because it's no longer $100 of BTC - you took possession of much more in cash and later bought BTC again". Which is to say, you were ongoingly interacting with the money at decreasing intervals from the present. The original claim is easy to prove: it'll be in a wallet which was held for that amount of time. The bank isn't obligated, unless you turn up covered in blood, to prove that you didn't just beat a guy with a hammer till he gives you the password - because you'll go down for that crime by other means. But very few people engaging in ongoing criminal transactions are going to have a supply of aged BTC accounts to use in trade for goods and resources, and certainly you'll trigger red flags if you keep turning up with a brand new "held it for years" account of $50,000 each week. I mean we know this: because it makes headlines when untouched BTC accounts start moving.
- Imustaskforhelp 1y ago
  Monero? Zano? (if you could actually see that monero actually hasn't been hacked as people say and it was all just a marketing gimick though I'd still be cautious and maybe keep my money in monero short term??)
ajross 1y ago
That example doesn't work. The blockchain shows that you purchased it for $100! At absolute worst, you "laundered" $100. Likely the statutes don't even apply to numbers that low.
- olalonde 1y ago
  See my other replies for why that doesn't work.
  - ajross 1y ago
    Your other replies rely on "assume the government has powers it does not and/or the judiciary is willing to suspend the burden of proof in criminal cases". I mean... yeah. It's true. If you assume we live in a totalitarian dystopia then sure, the government can do terrible things. But needless to say such a government doesn't need to pass boring AML laws to do that. It can just throw you in jail because it wants to. The actual rule of law under which we live doesn't have that property.
yogorenapan 1y ago
I've had this exact problem before, though not with such high amounts. To make it worse, it was Monero rather than Bitcoin, which made tracing impossible. In the end, I just had to produce emails/documents proving I was paid in crypto a couple years back & the associated increase in value since then. I got the crypto into my bank via a sketchy non-kyc exchange and somehow they didn't care about that at all.

XorNot 1y ago

Bitcoin literally has an immutable transaction record baked into it's model. You would be able to point to the timestamp when you took possession of the wallet which would prove providence unambiguously.

mothballed 1y ago
There's no KYC to take possession of a wallet, how would you prove the wallet wasn't just traded to you (maybe even yesterday) instead of moving the bitcoins?
- ajross 1y ago
  AML statutes don't invert the burden of proof! If the government wants to prosecute you for taking money, they still have to prove you took the money beyond a reasonable doubt. I'm always amused by the paranoia in the xxxcoin communities. If the government had and exercised the power you believe it does, why on earth do you think putting your money in bitcoin or whatever would provide any protection at all? Edit: case in point: > KYC and AML invert the burden of proof and are essentially an exception to the 4th amendment Oooph.
  - mothballed 1y ago
    KYC and AML invert the burden of proof and are essentially an exception to the 4th amendment, that's why they're so controversial. I tried to open a bank account when I was moving states before I had a local state ID or any utility bill or proof of address, no one would do it because they stated the standard the feds hold them to for KYC would essentially presume I am guilty of lying and require me to provide documentation to prove I'm not.
  - lcnPylGDnU4H9OF 1y ago
    > If the government wants to prosecute you Their point is that the government does not prosecute you, they threaten the banks with "regulatory incidents" if they don't comply. The result is that some people find it difficult to ever open a bank account with no means to "clear their name" as it were.
    - ajross 1y ago
      That doesn't seem to be a point made upthread in the chain to which I was responding. The contention was that people could lose assets or be prosecuted. And no, they can't, that's ridiculous.
      - mothballed 1y ago
        I follow some forums on international banking from time to time, occasionally I read the story of the guy who's deposits got AML flagged so they simply cut him a check, of course after they put him on world-check or some other banking black flag database that prevents him from depositing the check anywhere else. In that case in theory they don't lose their assets, but I have no idea what happens next.
        ajross 1y ago
        Seems like that would be a good anecdote to cite and not "I read it once on some forum", no? I mean... come on. Yes, it's possible it went down like that in a way that confirms all your libertarian priors about government overreach or whatnot. But given the sourcing, my money is on "Some rube got roped into taking 'payment' as part of a laundering scheme and was left holding the bag". Real fraud is rampant and pervasive. Libertarian fantasies are usually just that.
        mothballed 1y ago
        There's a poster on here called 'rabite' more commonly known as 'weev' who claims he was cut off entirely from the banking system despite being nominally innocent in the USA (he also claims he hates libertarians so I presume it's not part of a libertarian conspiracy). IIRC he moved to Transnistria (which has very loose money controls and basically controlled by the mob) and then bought apartments in Ukraine via cryptocurrency. Getting your account shut down and then receiving a check is definitely a real thing, if you're someone like 'weev' idk what you would do next, but it seems like he found one of the few ways around it. He has no valid serious convictions that I'm aware of, the only one he has was reversed because it was prosecuted in the wrong jurisdiction (and aside, had some other serious appellate arguments to consider if they hadn't chosen jurisdiction as the reason to vacate).
olalonde 1y ago
That works until it does not. What if you transferred the BTC to other wallets or exchanges in the meanwhile? Even if you still had access to the original wallet, what proves that it was really yours? etc.
- multjoy 1y ago
  Unless you’re using mixers then it is relatively trivial to follow your BTC around the blockchain. That is the very point of it. The issue of provenance is an issue regardless of the type of funds. In most jurisdictions the burden of proof is civil, so more likely than not.
  - olalonde 1y ago
    Sure, you can trace the full transaction history of any BTC through the blockchain... but that doesn't prove anything. At minimum, you need all the private keys involved (e.g. not possible if you used an exchange or deposited/withdrew from some online service or lost/deleted an old wallet). Even if you had the full list of private keys involved, going back to 2012, what proves that they were really yours and, like another commenter pointed out, that you didn't just acquire them yesterday?
    - XorNot 1y ago
      Which is a more complicated scenario then originally claimed, which was "I bought a $100 of BTC in cash many years ago and held onto it since then". If you cashed out that BTC via an exchange for example, then there will be bank transaction records showing you did but also welcome to "you were likely due taxes on your gains in the interim because it's no longer $100 of BTC - you took possession of much more in cash and later bought BTC again". Which is to say, you were ongoingly interacting with the money at decreasing intervals from the present. The original claim is easy to prove: it'll be in a wallet which was held for that amount of time. The bank isn't obligated, unless you turn up covered in blood, to prove that you didn't just beat a guy with a hammer till he gives you the password - because you'll go down for that crime by other means. But very few people engaging in ongoing criminal transactions are going to have a supply of aged BTC accounts to use in trade for goods and resources, and certainly you'll trigger red flags if you keep turning up with a brand new "held it for years" account of $50,000 each week. I mean we know this: because it makes headlines when untouched BTC accounts start moving.
Imustaskforhelp 1y ago
Monero? Zano? (if you could actually see that monero actually hasn't been hacked as people say and it was all just a marketing gimick though I'd still be cautious and maybe keep my money in monero short term??)

ajross 1y ago

That example doesn't work. The blockchain shows that you purchased it for $100! At absolute worst, you "laundered" $100. Likely the statutes don't even apply to numbers that low.

olalonde 1y ago
See my other replies for why that doesn't work.
- ajross 1y ago
  Your other replies rely on "assume the government has powers it does not and/or the judiciary is willing to suspend the burden of proof in criminal cases". I mean... yeah. It's true. If you assume we live in a totalitarian dystopia then sure, the government can do terrible things. But needless to say such a government doesn't need to pass boring AML laws to do that. It can just throw you in jail because it wants to. The actual rule of law under which we live doesn't have that property.

yogorenapan 1y ago

I've had this exact problem before, though not with such high amounts. To make it worse, it was Monero rather than Bitcoin, which made tracing impossible. In the end, I just had to produce emails/documents proving I was paid in crypto a couple years back & the associated increase in value since then. I got the crypto into my bank via a sketchy non-kyc exchange and somehow they didn't care about that at all.