5 ms·

Wouldn't you still have to explain who was paying you BitCoin, and why?

by eurleif 13y ago

jlgreco 13y ago
"I do freelance [whatever] over the internet in exchange for bitcoins." Where "[whatever]" is something relatively unverifiable. Programming, essay writing, whatever. Declare it properly as income and you probably won't have issues unless somebody actually decides to look closer. Not all that different from "selling" heavily marked up drinks at your bar in exchange for cash, then pouring said drinks down the drain. It will work for a while so long as you avoid suspicion.
- kanzure 13y ago
  > Where "[whatever]" is something relatively unverifiable. Programming Yep. And that may sound inefficient, but it's actually really great at decreasing information about the source of money. For example, you might have a legitimate software business where you're selling custom software to a customer, but meanwhile you're financing the creation of those bits through dirty e-goldcashcoin. Later, you transfer the bits through Tor to yourself, with very little record of the origin of those bits. The only problem is that the worker that was paid in dirtcoin might be able to recognize their work in the future (in the wild), breaking the anonymity of that value-creating transaction. So you can focus on content creation work that is less unique, but you can't always charge customers that much for that sort of work anyway.. I think it's an interesting problem to think about. I am sure there's a solution where you don't end up with a stray existential threat like the worker stumbling upon his beautiful artwork in the future. Assassination market? That's really extreme, surely there's a better way.
  - jlgreco 13y ago
    Jurisdiction allowing^, a bitcoin gambling website would be a fantastic way of laundering your bitcoins. Just start using your undeclared money to play at your own casino. The house always wins, so slowly but surely that dark money will become your legitimate income. Do it right and you might actually even turn your casino into a legitimate source of income itself. ^ I'm not sure where this would be legal. Not the US clearly.
    - kanzure 13y ago
      > The house always wins, so slowly but surely that dark money will become your legitimate income. That's not helpful, because the transaction is really obvious. If your casino is unpopular, it's even more obvious that it might just be you. This is a much worse idea than the one in your original comment. Edit: also, you can't verify that obfuscators operate without logs, so using "mixers" isn't a legitimate answer either.
      - jlgreco 13y ago
        The way I see it, there two stages to money laundering: The first is simply disassociating your money from the crime. If you robbed a bank this means swapping your bills for other bills. If you robbed MtGox or sold a bunch of coke on the silk road this means using a fuckton of mixers... but that is not a good solution as you have noted. Bitcoin does not lend itself to this at all. Honestly if I somehow found myself in the possession of a ton of prominently stolen bitcoins I would just write them off; the risk involved in recovery would be far to great. If it was just bitcoins I got from selling some coke on silk road then I would be more relaxed; a few (presumably) independent mixers over a few months would put me at relative ease. None of the money from this step is useful though.. not unless you are content with paying your rent in cash for a few years or blowing all your bitcoins on VPSs... For the money to become actually usable you need part two. The second part is the traditional money laundering. Taking money that is assumed to be unconnectable with the crime and associating it with your identity in a way that appears legitimate. If you robbed a bank this means taking the bills that you got out of step one and finding a way to put them back into the bank. If you are selling coke in real life then this is actually the only step you need to worry about; take the cash you got for the coke, "spend" it at your bar, and deposit it at the end of the week in your bank account. If you mined a shitton of coins a few years ago and don't really care to explain that you are a miner, then this is the only step you need to worry about. The idea of both the "freelancing" and "casino" ideas is to do only step 2; that is to say they are both just to associate money with your identity in an "official" way. Neither will work worth a damn for step 1... at least I wouldn't trust either of them for that. The nice thing about bitcoin casinos is that they are easy to spin up. Just load one up, spam it all over the place over the period of a week. During that week you "gamble" with yourself, then you taper that down to simulate waning interest in your service. Rinse and repeat as often as you need more money, just rip off whatever the current preferred gambling/toy is in the community at the moment. Never keep them around long enough for them to be popular or unpopular, only new. With the freelancing idea you may eventually have to explain where you are getting your contracts, but with technically legal fly-by-night gambling schemes nobody would expect even you to know or care. Gambling sites involve far less fabricated story and background, which is to your advantage. Which I would choose would depend on how much money I wanted to attach to my identity and how fast. For modest amounts quickly I'd make a gambling site. For large amounts infrequently but at steady interval, I would become a freelancer. That would be the better one to attempt to live off of. (Also I'm in the US, so a gambling site is a non-starter anyway.)
- caf 13y ago
  ..or selling haircuts or tattoos to non-existent customers.

Wouldn't you still have to explain who was paying you BitCoin, and why?

by eurleif 13y ago

Wouldn't you still have to explain who was paying you BitCoin, and why?

"I do freelance [whatever] over the internet in exchange for bitcoins." Where "[whatever]" is something relatively unverifiable. Programming, essay writing, whatever. Declare it properly as income and you probably won't have issues unless somebody actually decides to look closer. Not all that different from "selling" heavily marked up drinks at your bar in exchange for cash, then pouring said drinks down the drain. It will work for a while so long as you avoid suspicion.

kanzure 13y ago
> Where "[whatever]" is something relatively unverifiable. Programming Yep. And that may sound inefficient, but it's actually really great at decreasing information about the source of money. For example, you might have a legitimate software business where you're selling custom software to a customer, but meanwhile you're financing the creation of those bits through dirty e-goldcashcoin. Later, you transfer the bits through Tor to yourself, with very little record of the origin of those bits. The only problem is that the worker that was paid in dirtcoin might be able to recognize their work in the future (in the wild), breaking the anonymity of that value-creating transaction. So you can focus on content creation work that is less unique, but you can't always charge customers that much for that sort of work anyway.. I think it's an interesting problem to think about. I am sure there's a solution where you don't end up with a stray existential threat like the worker stumbling upon his beautiful artwork in the future. Assassination market? That's really extreme, surely there's a better way.
- jlgreco 13y ago
  Jurisdiction allowing^, a bitcoin gambling website would be a fantastic way of laundering your bitcoins. Just start using your undeclared money to play at your own casino. The house always wins, so slowly but surely that dark money will become your legitimate income. Do it right and you might actually even turn your casino into a legitimate source of income itself. ^ I'm not sure where this would be legal. Not the US clearly.
  - kanzure 13y ago
    > The house always wins, so slowly but surely that dark money will become your legitimate income. That's not helpful, because the transaction is really obvious. If your casino is unpopular, it's even more obvious that it might just be you. This is a much worse idea than the one in your original comment. Edit: also, you can't verify that obfuscators operate without logs, so using "mixers" isn't a legitimate answer either.
    - jlgreco 13y ago
      The way I see it, there two stages to money laundering: The first is simply disassociating your money from the crime. If you robbed a bank this means swapping your bills for other bills. If you robbed MtGox or sold a bunch of coke on the silk road this means using a fuckton of mixers... but that is not a good solution as you have noted. Bitcoin does not lend itself to this at all. Honestly if I somehow found myself in the possession of a ton of prominently stolen bitcoins I would just write them off; the risk involved in recovery would be far to great. If it was just bitcoins I got from selling some coke on silk road then I would be more relaxed; a few (presumably) independent mixers over a few months would put me at relative ease. None of the money from this step is useful though.. not unless you are content with paying your rent in cash for a few years or blowing all your bitcoins on VPSs... For the money to become actually usable you need part two. The second part is the traditional money laundering. Taking money that is assumed to be unconnectable with the crime and associating it with your identity in a way that appears legitimate. If you robbed a bank this means taking the bills that you got out of step one and finding a way to put them back into the bank. If you are selling coke in real life then this is actually the only step you need to worry about; take the cash you got for the coke, "spend" it at your bar, and deposit it at the end of the week in your bank account. If you mined a shitton of coins a few years ago and don't really care to explain that you are a miner, then this is the only step you need to worry about. The idea of both the "freelancing" and "casino" ideas is to do only step 2; that is to say they are both just to associate money with your identity in an "official" way. Neither will work worth a damn for step 1... at least I wouldn't trust either of them for that. The nice thing about bitcoin casinos is that they are easy to spin up. Just load one up, spam it all over the place over the period of a week. During that week you "gamble" with yourself, then you taper that down to simulate waning interest in your service. Rinse and repeat as often as you need more money, just rip off whatever the current preferred gambling/toy is in the community at the moment. Never keep them around long enough for them to be popular or unpopular, only new. With the freelancing idea you may eventually have to explain where you are getting your contracts, but with technically legal fly-by-night gambling schemes nobody would expect even you to know or care. Gambling sites involve far less fabricated story and background, which is to your advantage. Which I would choose would depend on how much money I wanted to attach to my identity and how fast. For modest amounts quickly I'd make a gambling site. For large amounts infrequently but at steady interval, I would become a freelancer. That would be the better one to attempt to live off of. (Also I'm in the US, so a gambling site is a non-starter anyway.)
caf 13y ago
..or selling haircuts or tattoos to non-existent customers.