Is Bitcoin More Traceable Than Cash? (seattletimes.com) 181
The New York Times argues that this week changed Bitcoin's reputation as "secure, decentralized and anonymous" (adding "Criminals, often operating in hidden reaches of the internet, flocked to Bitcoin to do illicit business without revealing their names or locations. The digital currency quickly became as popular with drug dealers and tax evaders as it was with contrarian libertarians.")
"But this week's revelation that federal officials had recovered most of the Bitcoin ransom paid in the recent Colonial Pipeline ransomware attack exposed a fundamental misconception about cryptocurrencies: They are not as hard to track as cybercriminals think..." [F]or the growing community of cryptocurrency enthusiasts and investors, the fact that federal investigators had tracked the ransom as it moved through at least 23 different electronic accounts belonging to DarkSide, the hacking collective, before accessing one account showed that law enforcement was growing along with the industry... The Bitcoin ledger can be viewed by anyone who is plugged into the blockchain. "It is digital bread crumbs," said Kathryn Haun, a former federal prosecutor and investor at venture-capital firm Andreessen Horowitz. "There's a trail law enforcement can follow rather nicely." Haun added that the speed with which the Justice Department seized most of the ransom was "groundbreaking" precisely because of the hackers' use of cryptocurrency. In contrast, she said, getting records from banks often requires months or years of navigating paperwork and bureaucracy, especially when those banks are overseas...
Tracking down a user's transaction history was a matter of figuring out which public key they controlled, authorities said. Seizing the assets then required obtaining the private key, which is more difficult. It's unclear how federal agents were able to get DarkSide's private key. Justice Department spokesman Marc Raimondi declined to say more about how the F.B.I. seized DarkSide's private key. According to court documents, investigators accessed the password for one of the hackers' Bitcoin wallets, though they did not detail how. The F.B.I. did not appear to rely on any underlying vulnerability in blockchain technology, cryptocurrency experts said. The likelier culprit was good old-fashioned police work. Federal agents could have seized DarkSide's private keys by planting a human spy inside DarkSide's network, hacking the computers where their private keys and passwords were stored, or compelling the service that holds their private wallet to turn them over via search warrant or other means. "If they can get their hands on the keys, it's seizable," said Jesse Proudman, founder of Makara, a cryptocurrency investment site. "Just putting it on a blockchain doesn't absolve that fact...."
The F.B.I. has partnered with several companies that specialize in tracking cryptocurrencies across digital accounts, according to officials, court documents and the companies. Start-ups with names like TRM Labs, Elliptic and Chainalysis that trace cryptocurrency payments and flag possible criminal activity have blossomed as law enforcement agencies and banks try to get ahead of financial crime. Their technology traces blockchains looking for patterns that suggest illegal activity... "Cryptocurrency allows us to use these tools to trace funds and financial flows along the blockchain in ways that we could never do with cash," said Ari Redbord, the head of legal affairs at TRM Labs, a blockchain intelligence company that sells its analytic software to law enforcement and banks. He was previously a senior adviser on financial intelligence and terrorism at the Treasury Department.
The story includes three intriguing quotes:
"But this week's revelation that federal officials had recovered most of the Bitcoin ransom paid in the recent Colonial Pipeline ransomware attack exposed a fundamental misconception about cryptocurrencies: They are not as hard to track as cybercriminals think..." [F]or the growing community of cryptocurrency enthusiasts and investors, the fact that federal investigators had tracked the ransom as it moved through at least 23 different electronic accounts belonging to DarkSide, the hacking collective, before accessing one account showed that law enforcement was growing along with the industry... The Bitcoin ledger can be viewed by anyone who is plugged into the blockchain. "It is digital bread crumbs," said Kathryn Haun, a former federal prosecutor and investor at venture-capital firm Andreessen Horowitz. "There's a trail law enforcement can follow rather nicely." Haun added that the speed with which the Justice Department seized most of the ransom was "groundbreaking" precisely because of the hackers' use of cryptocurrency. In contrast, she said, getting records from banks often requires months or years of navigating paperwork and bureaucracy, especially when those banks are overseas...
Tracking down a user's transaction history was a matter of figuring out which public key they controlled, authorities said. Seizing the assets then required obtaining the private key, which is more difficult. It's unclear how federal agents were able to get DarkSide's private key. Justice Department spokesman Marc Raimondi declined to say more about how the F.B.I. seized DarkSide's private key. According to court documents, investigators accessed the password for one of the hackers' Bitcoin wallets, though they did not detail how. The F.B.I. did not appear to rely on any underlying vulnerability in blockchain technology, cryptocurrency experts said. The likelier culprit was good old-fashioned police work. Federal agents could have seized DarkSide's private keys by planting a human spy inside DarkSide's network, hacking the computers where their private keys and passwords were stored, or compelling the service that holds their private wallet to turn them over via search warrant or other means. "If they can get their hands on the keys, it's seizable," said Jesse Proudman, founder of Makara, a cryptocurrency investment site. "Just putting it on a blockchain doesn't absolve that fact...."
The F.B.I. has partnered with several companies that specialize in tracking cryptocurrencies across digital accounts, according to officials, court documents and the companies. Start-ups with names like TRM Labs, Elliptic and Chainalysis that trace cryptocurrency payments and flag possible criminal activity have blossomed as law enforcement agencies and banks try to get ahead of financial crime. Their technology traces blockchains looking for patterns that suggest illegal activity... "Cryptocurrency allows us to use these tools to trace funds and financial flows along the blockchain in ways that we could never do with cash," said Ari Redbord, the head of legal affairs at TRM Labs, a blockchain intelligence company that sells its analytic software to law enforcement and banks. He was previously a senior adviser on financial intelligence and terrorism at the Treasury Department.
The story includes three intriguing quotes:
- Justice Department spokesman Marc Raimondi said the Colonial Pipeline ransom seizure was only the latest of "many seizures, in the hundreds of millions of dollars, from unhosted cryptocurrency wallets" used for criminal activity.
- Hunter Horsley, chief executive of cryptocurrency investment company Bitwise Asset Management, said "The public is slowly being shown, in case after case, that Bitcoin is good for law enforcement and bad for crime — the opposite of what many historically believed."
- A spokesperson for Chainalysis, a start-up that traces cryptocurrency payments, tells the Times that in the end, "cryptocurrencies are actually more transparent than most other forms of value transfer. Certainly more transparent than cash."
Yep (Score:5, Insightful)
Trades are public and you have to swap whole wallets in order to make an unregistered transaction, quite a trust issue there.
At least with dollars once you make it into cash you can trade the cash.
Re:Yep (Score:5, Interesting)
Right now I would say yes.
But I have read the ability of tracing DNA from just skin flakes now exist. I would guess it is rather expensive still. So I would think at some point the answer will be no.
So I believe once the expense becomes trivial, I could see law enforcement determine everyone who touched large denomination note. And I believe at least in the US that would be legal since it is legal for them to search your trash.
Re:Yep (Score:5, Funny)
I could see law enforcement determine everyone who touched large denomination note. And I believe at least in the US that would be legal since it is legal for them to search your trash.
Yet another reason not to throw large denomination notes into the trash!
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Or the wrappers — and any other packaging...
Seriously, drug lords, reportedly, lose millions a year to rodents eating the stockpiled banknotes [businessinsider.com]... It has its disadvantages.
Re: Yep (Score:5, Insightful)
Re:Yep (Score:4, Funny)
That's why you launder your money, duh. Just forget to take it out of your pocket when you toss your jeans in with some Tide.
Trash? (Score:4, Funny)
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Touch DNA tests costs no more than a regular DNA test. The ability to test touch DNA came from improvements in PCR. These improvements don't really cost any more, they are just more efficient. DNA testing costs continue to slide, the sequencing of the Human genome and the subsequent sequencing of numerous other species has made significant cost and time reductions in testing. In addition all this work has improved the tools and ability to test smaller and smaller samples.
They can literally lift your skin ce
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It is a lot harder to trace DNA from dollar bills than to track what is in the Bitcoin blockchain. One would have to have to have possession of the dollar bill, then try to extract meaningful DNA from it, and separate it from all the other DNA it comes in contact with.
On the other hand, there are tons of tools that can track BTC transactions, and can help greatly in figuring who has access to what wallets. There are entire companies like Chainalysis dedicated to watching what connects with what. Add to th
Why do you have to trace Bitcoins at all? (Score:2, Insightful)
For ransom, the FBI knows the actual bit coins that were paid.
They just publish a steam, signed by the FBI, that says those particular coins are tainted, and possession of them is a crime. Those coins suddenly become worthless, or at least worth very little, a fraction of untainted bit coins. The mechanisms are already there for spreading such messages.
Secret transactions for buying drugs are different. But still, if one end of the transaction is discovered then the coins can be declared tainted, which
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All that does is tell you someone was near or touched a particular note at some point in time
Or touched a note that touched that note. It's not like the DNA is glued to the bill.
Re:Yep (Score:4, Interesting)
Even cash is traceable to a degree, since it's possible to follow serial numbers. At some point, a holder of cash wants to get it to a bank because no one wants to actually buy a big-ticket item with actual cash. Banks scan serial numbers of the cash they take in, especially in large amounts, enabling the tracing to take place.
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For small transactions, I'm sure those serial numbers aren't scanned. But for a very large deposit, you'd better believe they are!
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Yeah, that's the massive trust issue I was talking about.
It's physically possible to swap wallets. That you cannot trust the other party to do so is the problem.
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Yeah, that's the massive trust issue I was talking about.
It's physically possible to swap wallets. That you cannot trust the other party to do so is the problem.
sorry but i still don't understand the term "swap" in this context. i could give a full wallet away in payment, and if nobody had ever linked that wallet to me that's a non-digital transaction without any trace back to me. but why would i ever want to swap wallets?
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Re:Yep (Score:5, Informative)
>Because move isn't move; a move is a copy plus a delete. Same for wallets.
I'm fairly certain that depends heavily on the file system - so long as you're moving a file within the same file system (i.e. not between different "discs") many (most?) move commands will simply re-link the same on-disc file from a different directory - modifying only the folder indices without even looking at the file data itself. I'm pretty sure both DOS move on FAT and Linux mv on ext2/3 work that way, and I think Windows command-line move on NTFS does as well. I have no idea what's going on with a Windows GUI-based move - I've sat there watching a progress bar even when I've said to canceled the only file that was being moved (e.g. after being prompted if I wanted to overwrite a file with the same name)
You're absolutely right about bitcoin wallets though, and I think drinkypoo knows that with their reference to the trust issue. Good to spell it out for anyone unfamiliar with the process though.
Doh (Score:5, Insightful)
Of course itâ(TM)s more traceable. Every transaction is public. Thatâ(TM)s kind of the point.
It just seems hard because you donâ(TM)t have a readily available database mapping bitcoin addresses to people.
But the fact that you can indefinitely trace where Bitcoin goes makes that less important. Eventually it ends up with someone you can identify and you work your way backward or forward from there.
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It just seems hard because you donâ(TM)t have a readily available database mapping bitcoin addresses to people.
That doesnt mean that somebody doesnt... certainly not 100% coverage but I could see high 80's... you have to go out of your way to not leak enough to nail it down to at least your household..
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True. Bitcoin is only pseudonymous, not anonymous (as was made clear even in much of the early propaganda). It's only anonymous if you can keep your pseudonym secret through independent means, and given its popularity for illicit uses it's fair to assume that every intelligence agency on the planet does their best to link wallets to real people, particulalry for any wallet directly or indirectly linked to any of that illicit activity.
Re: Doh (Score:2)
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It just seems hard because you donâ(TM)t have a readily available database mapping bitcoin addresses to people.
But that's the thing... you don't need to pre-populate that data set for everything, just determine it for the public key in question. If that address ever interacts with company that converts bitcoin to another "real world" asset, then you can learn the identity you need. For example, the pizza you bought with bitcoin last year attached your bitcoin address to your identity and physical address and can be discovered via police work easily with subpoenas and warrants. Use Coinbase? They know who you are and
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But bitcoin can be split into smaller sums, moved many times to many different addresses, each of which has many ingoing and outgoing transactions. When it finally arrives at its destination, it may not really be a single destination. It can be a collection of addresses all controlled by one person. But that would not be obvious to the observer. I believe you are hand waiving the difficulty of tracing bitcoin when someone wants to deliberately hide the destination. But certainly it is possible to de-anonymi
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The same computational power that enables block chains and digests are available to other side also. You think building a reverse look up index is hard? Google page rank is a reverse look up table, basically. Obfuscators exist, the law enforcement knows they exist, and the transactions through them will get more scrutiny.
Almost all the activity in crypto are buying and selling crypto. Not much of real world goods and services are paid to through crypto. All wallet transactions
Re:Doh (Score:4, Insightful)
The hard part about building a reverse lookup is ascertaining the identity of previously unknown addresses. I don't think it is about computational power. If you want to follow a sum after it is split up and moved through many busy addresses, you have to cast an ever wider net and then hope that eventually you will figure out the ultimate destination. The coins don't have serial numbers. Every time a sum is moved to a new address, every transfer out of that address could conceivably be the sum you are trying to track. So you have to follow every transaction. Then every transfer out of that address has to be followed. If there are a large number of people assisting in this obfuscation, it could make it hard to reconstruct what is really happening. In the end there could be thousands of addresses which MIGHT be the ultimate resting spot of a particular sum. You don't know which one is which. You have to investigate them all if they are ever used for a legitimate purchase. Anyway, by supplementing with other information not on the blockchain, I am sure law enforcement can in many cases still track bitcoin when an effort is made to obfuscate it. But the obfuscators can also "up their game" over time.
For bitcoin, the whole entire blockchain is available to anyone who has enough resources to run a node. Which is pretty much almost anyone. So yeah, the transaction history is all there. And over time, more and more of the addresses could be de-anonymized and associated with real people. I am not sure what you mean when you say "All wallet transactions are archived before being digested by the government. Relatively simple matter to sequester wallets doing simple trading from wallets moving huge sums of money". If by "wallet" you mean a single bitcoin address then sure. But any individual can trivially create a large number of bitcoin addresses. Hardware wallets can manage this for you. But nobody on the outside will know that the addresses are all controlled by one person. So the large some of money may ultimately come to rest in a large number of addresses with only small balances. You can send an agent to interview the spender of every possibly suspect sum, but even if you find the real bad guy, he/she may have a plausible lie about where the money came from. The problem is that the number of suspect sums could be quite large. That is the point of obfuscation. To create so many suspect addresses that authorities don't have time to dedicate investigative resources to all of them.
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The weakness in bitcoin is two factors.
1. The Ledger is completely public, every coin can be traced from creation to current wallet.
2. To use the money for a purchase or extract it from bitcoin to a usable currency you have to go through the traditional financial system that is designed to identify you and includes severe penalties for attempting to hide your identity or otherwise conceal source. This includes tax issues that will net prison time in most western countries.
The ransomware people in this case
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I mean, not really. The coins don't have serial numbers. If I transfer 1 bitcoin into an addresses that has a large balance and hundreds of transfers per day, you don't know where it went when it left, or if it ever left. You can flag every single transfer out of that address but what if there are a lot of them? On the other hand, if you can identify the person who controls that address you can just ask them who sent the money. But if the person who c
dumbshit questions for a $1000 (Score:5, Interesting)
Obligatory XKCD (Score:2)
Of course its traceable (Score:2)
Why do you suppose governments haven't outlawed it.
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Physical exchange of banknotes, alledgedly, spreads COVID.
Contactless payment has given cover for governments outlawing cash in favour of electronic transactions.
Dose matters [Re:Of course its traceable] (Score:5, Funny)
Physical exchange of banknotes, alledgedly, spreads COVID.
It does not.
Turns out that in terms of infection, dose matters, and it's very hard to load enough viable virus onto a bill to infect somebody. Unless perhaps they're planning to rub their nose on the bill while inhaling deeply*.
*(I think maybe ducks do that. I think I've seen it in Uncle Scrooge comics.)
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You'd be more likely to get a dose of cocaine than Covid.
Re: Of course its traceable (Score:4, Informative)
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Why do you suppose governments haven't outlawed it.
I suppose it's because people who make rules are profiting from it somehow, probably using it to launder money.
Well, I mean, BTC's a public blockchain and all (Score:2)
Duh! Took this long to figure this out? (Score:3)
The claim of anonymity of cryptocurrency derives from the fact, the wallets are not tied to any real identities. Its the old wine of numbered Swiss bank accounts, in a new cryptocurrency block chain bottle. All it takes is one wallet to be tied to a real identity and a criminal act. Law enforcement can leverage and tie other wallets to the criminal. One by one, they can find most of the criminals.
Crypto side came up transaction obfuscators, exchanges that mix up transactions between multiple wallets in a bid to gain anonymity. Soon the non-criminals realize they are the forest in which the criminal trees are hiding, What? my pizza order and the vacation rental is helping criminals laundering drug money?. They don't want their wallet to co-mingled with criminal transactions through an obfuscator. I don't want my on line order for tomato seeds to be co-mingled sex trafficking payments. They will create multiple wallets, one for public clean transactions, and others where they desire privacy. There are quite a few legitimate transactions by regular folks that might need privacy.
That will make the criminal and private transactions stick out like a sore thumb. The criminal transactions already done in crypto currency have all been archived already. Crypto might eventually turn out to be a great ally of Govt, not the ally of mavericks bucking govt control.
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It is space efficient. As far as energy goes, the energy required to mine bitcoin is dependent on the state of the art in energy-efficient hash computation and the difficulty setting within the bitcoin network. If the difficulty were set to the lowest level, probably a single server could maintain the whole bitcoin blockchain. Very few hashes would be required before a valid block was created. But the difficulty is automatically increased if blocks are found too quickly. So the difficulty increases automati
Government lost a lot of the money in the recovery (Score:4, Interesting)
It appears by the time the government had recovered to ransom, Bitcoin had declined substantially in value.
YMMV
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It appears by the time the government had recovered to ransom, Bitcoin had declined substantially in value.
Recover low, sell high. Basic investing 101.
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Fortunately, the criminals lost even more.
Weakness is always the same (Score:3)
''The F.B.I. did not appear to rely on any underlying vulnerability in blockchain technology, cryptocurrency experts said''
Kinda sorta.. the weakest part of any secure system is the OPSEC of the user.
If you ensure you move cash (Score:2)
in a manner that removes the ability to trace serial numbers on cash, bitcoin is a laser targeted objective.
You can easily move cash around by purchasing items and getting even more random cash in return.
If you're just taking cash out of an ATM, I guess there is the ability to track the serial numbers of the money distributed to you.
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Easily broken by: "Hey buddy, you have change for a $1,000?"
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Yes, if you have $1000 to launder, your task is much easier. If you have several million, this doesn't work, because nobody says yes to "Hey buddy, you have change for $2.3 million?" because they are afraid of money laundering laws. Legit businesses report transactions above $10K routinely and almost nobody else holds cash above that level without tight controls.
Does not scale (Score:3)
You can easily move cash around by purchasing items and getting even more random cash in return.
That works for the amounts that you or I might deal with. But you can't take $1million out of an ATM. Nor can you go to the dealership and drive out with half a dozen Maserati's that you buy with BTC.
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Generally cash purchases are relatively small amounts, large cash purchases draw suspicion and often government reporting requirements.
Bitcoin has never been anonymous and was never meant to be, it was simply new and unfamiliar so it takes people a while to catch up,
The advantage bitcoin offers is that its global and open to everyone, you cannot have your bitcoin wallet blocked because it's been associated with illegal activity.
It's essentially transparent. (Score:2)
If I put cash in a physical wallet and hand it over to you, there is no record of either me putting money in the wallet, nor me handing it over to you.
So yeah, BTC is twice as traceable or way more traceable, depending on how you want to weigh that. I think the fact that the FBI recovered the vast majority of the recent
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With cash, it's generally not important to trace small transactions. Criminals who score big ransoms have to find a way to get those large cash sums into a bank, where they can turn it into something they can use. It's too much work to split up the large cash amount into small enough chunks to spend it anonymously. Those large cash deposits absolutely are tracked!
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With cash, it's generally not important to trace small transactions. Criminals who score big ransoms have to find a way to get those large cash sums into a bank, where they can turn it into something they can use. It's too much work to split up the large cash amount into small enough chunks to spend it anonymously. Those large cash deposits absolutely are tracked!
I've wondered how easy it is to actually spend the ransom. It's not like you're getting cash that you can cleanup through your pizza joints. Yo may have 10 million in Bitcoin, spending it in a way not to attract attention is the challenge. Plus you have expenses related to running an illegal business such as bribes, protection money, intermediaries for purchases, etc. It would be interesting to see a set of books that show where the money actually went and who benefited the most.
Of course it is. (Score:2, Insightful)
Step 1: Cash goes from my bank into my wallet.
Step 2: NONE OF YOUR FUCKING BUSINESS!
Step 3: Cash goes into someone else's bank account.
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Step 1: Cash goes from my bank into my wallet.
Step 2: NONE OF YOUR FUCKING BUSINESS!
Step 3: Cash goes into someone else's bank account.
Speaking like someone who has something to hide. We'll send a heavily armed government auditor by shortly. Sincerely, The Government.
I see (Score:2)
So after a lot of investigations for hundreds of thousands of dollar, they find out that somebody who uses the handle stupid_cunt@yopmail.com with a European VPN might be up to no good?
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How did they find out your email address?
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"How did they find out your email address?"
It was your mom's. :-)
cash will slowly become more traceable (Score:5, Interesting)
the technology to have cameras over cash registers and to detect printed numbers in an image are both here today, it's only a matter of time before they're combined. Once that's done if the feds want to know the last 10 places a dollar bill has been, perhaps to find security footage of the individual. Well the limitations are legal not technical. I'm sure legal limitations are simple to overcome, pass a bill called Protect Americans from __blank__(cyberfruad? identity theft? doesn't matter really). and erode fourth amendment rights further in the name of safety.
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Cash is already quite traceable. Banks scan serial numbers for cash deposits, especially big ones. It's a lot of work for criminals to spend large amounts of money in small chunks at stores, so that's not where they go to hide their trail. In the end, they've got to get those large cash deposits to a bank in order to make use of them.
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Sure, but the fewer points you scan that money the less clear the picture.
If I were to create a startup that offered some service to small business. Let's say I could reduce till loss from miscounts or theft. I set up convenience stores and what have you with my service for some monthly fee. Then on the side I collect market research data on the flow of cash from store to store in a region and sell that too. Viola an exploitable system for spying on citizens has "accidentally" been created and for a tidy pr
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Oh stores of all kinds have been spying on us for decades already.
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Why doe they need the serial numbers of the bills when there is security footage of you at the register making the purchase?
So they know who else's hands that money has passed through. It's not just about you, it's about everyone.
Clearly you're not Jason Bourne... (Score:2)
Or someone suffering from a delusion of being a super secret super agent being chased by an evil and corrupt megagubermint intent on putting microchips in your but and taking your guns away and probably making you gay and vegan in the process in order to save the trees for the alien overlords.
Cause alien overlords want some lettuce with their grass-fed human meat.
If you were... You'd realize that, by tracing every bill ever, the evil an corrupt megagubermint can trace not only you - but everywhere that bill
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Because they only know the serial numbers of the bills. If they knew who you were, you'd already be arrested.
By tracking the serial numbers and then going back to that footage, they hope to ID you.
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Because they only know the serial numbers of the bills. If they knew who you were, you'd already be arrested.
By tracking the serial numbers and then going back to that footage, they hope to ID you.
Uh huh. It's simpler to track every single note in circulation through every single transaction than to do a reverse image search with Google.
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Reverse image search based on what image?
If they haven't identified you yet, they don't have a picture to start from.
Yes (Score:2)
Take that Betteridge's Law of Headlines simps.
Or, no? [Re:Yes] (Score:2)
Take that Betteridge's Law of Headlines simps.
Ha!
Well, let's look at the "no" case. Cash is traceable because transferring 4.4 million dollars requires a physical presence. Who picked it up? How do they get it to the criminals? And the bills would have serial numbers; the banks would be watching for where they turn up. Also... a ransom of 4.4 million dollars in actual physical cash would probably include some of those little exploding dye packets that spray brightly colored dye over everybody nearby; not sure how you do that with bitcoin.
Of course it is traceable, but... (Score:2)
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Of course it is traceable - part of the security of the protocol. In theory (as I had never done that), if one wants anonymity, send small amounts to a mixer, then to your own wallet, later to an exchange, swap for Monero, send to your own wallet, transfer to other exchange in a different jurisdiction, cashout.
Of course multiple transactions through various entities can obfuscate the initial source of money; that's the traditional way of laundering money. However, as with the old way, each stop is a weakness to be exploited. Exert the right pressure and you can work your way back; and it's not unheard of for law enforcement to quietly seize a business and run sting operators with it. That gives them an insider view of what is happening as well as data about past transactions; plus one mistake while attempting to
It's not until it is. (Score:5, Insightful)
Here's the Achilles heel of Bitcoin for people who want to keep their illegal transactions at arm's length: the whole scheme is built on the foundation of a transparent, public audit trail.
That scheme isn't really anonymous; it's pseudonymous. Your real identity is fairly safe just trading cryptocurrency, provided you take reasonable precautions, but as soon as you use your ill-gotten gains to buy a mansion or a Lambo that asset gives law enforcement a point of correlation between your real identity and your Bitcoin pseudo-identity.
Now you can launder your Bitcoins through a series of wallets, making it impossible to know looking at a single purchase whether the purchaser is connected to the wallet that received the ill-gotten proceeds, but remember the public audit trail tracks *all* your transactions. If you want to get a large amount of money out of Bitcoin you have to launder it through untraceable physical assets, but again the sellers of those assets have to somehow get them to you. Your ongoing efforts to benefit from your criminal schemes will give investigators more and more points of correlation until they can show that money from your ransomware attacks has a statistically improbable way of making its way into your pocket.
Your best defense is to be located in a country where law enforcement doesn't care if you're running an international criminal enterprise as long as you don't mess with anyone politically connected domestically. If law enforcement takes an interest in your laundering large amounts of cryptocurrency, they will nail you. They may not be able to recover the money (you *have* been perfect in your device security, no?) but neither will you.
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Cash is currently much more traceable (Score:3, Interesting)
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There are a variety of laws and structures in place to make cash traceable that don't exist yet for Bitcoin or cryptocurrency in general.
You don't need such laws when every transaction is public.
Where cryptocurrency becomes traceable is if you can get a link in the chain to break
Because when a company pays a ransom, it says "here bitcoin!" and throws the money out randomly, and not to a specific address. That you can monitor thanks to all transactions being public.
You absolutely do (Score:2)
Where it breaks down is when you start trading currency with someone and they flip on you to law enforcement. But you can get around that by doing your trades in countries openly supporting crime (like El Salvador seems to be doing). You lose some money that way, but that's the nature of money laundering, and crime is usually profitable enough
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Maybe you should read the article. Law enforcement caught up.
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Or maybe BTC and ETH have found better roles in life than illicit activities ...
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ETH isn't even a currency. I don't understand the posters here who act like they know exactly what people are doing with BTC. There's very little hard data out there suggesting that a majority of BTC (specifically BTC) transactions comprise illicit/black market activity.
There was one study showing a small percentage of BTC transactions were related to criminal activity [chainalysis.com]. People like rsilvergun don't want to listen since they apparently immediately distrust Chainanalysis. They can cite no countervailing s
The record says no (Score:5, Interesting)
Sounds like they broke into the hacker's computer and took control of the wallet (similar to how online banking credentials can be stolen) rather than tracing Bitcoin. Tracing bitcoin doesn't mean much if you can't put a name to the wallet, especially if the wallet isn't used for any other transactions. One pass through a tumbler and even tracing across wallets becomes vastly more difficult. One pass through an exchange to an intentionally untraceable cryptocurrency like zcash and there's no hope of ever tracing where the money went.
We'll know when Bitcoin becomes more traceable than cash because it would lose its only functional advantage over any other payment system, causing the value to crash irrecoverably. We'll also stop hearing about ransomware infections.
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You give BTC too much credit.
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We'll know when Bitcoin becomes more traceable than cash because it would lose its only functional advantage over any other payment system, causing the value to crash irrecoverably.
You think BTC is valuable because everyone buying it is planning on some criminal activity? It's valuable because people buying it still think they can eventually sell it to someone else for more.
We'll also stop hearing about ransomware infections.
Yeah ransomware didn't exist before bitcoin.
See? Cryptocurrency is a trap, always has been (Score:2)
It's also so volatile that you're insane to put any real investment in it, except speculatively, taking advantage of idiots.
Regardless it's been a go-to tool of criminals since the beginning, so there's the stigma of that.
Finally it's bad for the environment. Vast resources are used to create the technology necessary to 'mine' it, and vast amounts of energy, exceeding the value of what you're 'mining', are necessary.
So overall it's going from bad to worse, an
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Or maybe, just maybe, the world at large sees it completely different and came to different conclusions? If volatility is a show stopper, then stock, gold and foreign currencies would be a nogo as investment - they aren't by any means and never were. Use by criminals would also apply to at least cash, real estate and gold. Cash has a strong stigma because of that (think: civil forfeiture), yet is still commonly used. Environmental concerns can be resolved, either by switching to a PoS consensus mechanism (a
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Or you could use, I dunno . . . XMR?
more crime, more seized cash (Score:2)
ever wonder why the authorities don't nip crime in the bud, there's no money in that
thanks for getting of ACs and protecting us from free speech /., what a bunch of evil people and a corporate abomination ;-(
Don't know, we should make a test. (Score:2)
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If the US gov't had reason to believe, that the transfer to this address you just posted was for illicit purposes, then they'd subpoena slashdot for all data associated with your user account and be done with it - and you. :-D
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They pretty much did? I rarely use Outlook/Hotmail accounts these days, but gMail is incredibly effective at filtering out spam.
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I get literally thousands of spam mails to my gmail every month, because I just go ahead and publish it everywhere. Only dozens at worst hit my Inbox, and there are few false positives.
Perfection? Nope. But frankly beyond my expectations.
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I get literally thousands of spam mails to my gmail every month, because I just go ahead and publish it everywhere. Only dozens at worst hit my Inbox, and there are few false positives.
Perfection? Nope. But frankly beyond my expectations.
Same here. I've had companies, when I give them my gmail, say to check my spam filter if I don't get a reply within x days as their emails sometimes go there. One thing that I find really odd is sometimes if I email someone their reply goes to spam; you'd think the system would be smart enough to know if I emailed someone I might want to read the reply. Password resets, for obvious reasons, also tend to go to spam so if I request one and don't get it my spam folder is checked to see if it went there.
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Congratulations, now you have some digital numbers. Now what?
If you want to *do* anything with those numbers, you're going to leave clues to your identity. Your dealer needs to know where to deliver. That new Tesla has a VIN.
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I don't see how that's relevant to the OP's question or my reply. Perhaps if you contact the FBI [fbi.gov] or CIA [cia.gov] they could answer your question better than I can. I suspect the answer would be something along the lines of "leak the information to the press" but that's just speculation on my part.