$7.5B In Stolen Bitcoin from 2016 Bitfinex Hack has just been moved • Hacker News Board

Re: $7.5B In Stolen Bitcoin from 2016 Bitfinex Hack has just been moved

#251

Post by Salgat » Thu, Apr 15, 2021, 6:19 AM UTC

ajkdhcb2 wrote: post #52

Funds like this can be frozen when 51% of mining pools start censoring transactions. Pools are now beginning to do this. I expect there will be a lot of BTC like this that starts to realise they need to be trying to dump it / escape into monero as quickly as they can

Only if you can keep up with the new addresses the coins are sent to, and if they decide to send some of the coins to random legitimate accounts en masse, now pools will be blocking countless legitimate accounts that have no connection to the censored address. It would require some kind of central agency that can track and immediately update a list of censored addresses.

Re: $7.5B In Stolen Bitcoin from 2016 Bitfinex Hack has just been moved

#252

Post by nojster » Thu, Apr 15, 2021, 6:21 AM UTC

nknealk wrote: post #8

Here’s an interesting question — if you receive BTC from one of these addresses as payment for something, do you refuse it? You know it’s stolen and you might worry someone else who you might pay in the future would be able to track down that it’s stolen, so do you ask for “clean” BTC that isn’t linked to known theft? I don’t necessarily know the answer here. This is something that you can’t do with paper bills

That’s correct and several exchanges will freeze funds when they have a “tainted history”. Thus, tokens on open ledger DLTs are not fungible at all.

Cash is more fungible, yet you can also link serial numbers on bills back to ransom payments.

In a similar fashion, if you, even unknowingly, pay with counterfeit cash, you won’t get reimbursed for the face value, if it gets detected.

Back to crypto, Monero addresses the aforementioned issues through stealth addresses, ring signatures and ringCTs, thus fungibility of the token is higher.

Re: $7.5B In Stolen Bitcoin from 2016 Bitfinex Hack has just been moved

#253

Post by nieve » Thu, Apr 15, 2021, 6:22 AM UTC

Someone wrote: post #142

pie420 wrote: post #23

Earlier quoted context omitted.

You can definitely do this with bills... You realize when a bank gets robbed the serial numbers are tracked and confiscated when they show up, and often lead to the theives

I don’t think the “confiscate” part is categorically true. If the police arrest suspected criminals and find money that can be traced back to criminal activity, they’ll confiscate it (permanently only after a trial). “Traced back” typically need not even involve checking serial numbers. If you’ve a lot of cash, but no regular job that explains how you could have that much money or why you would keep it in cash, that’…

Unfortunately due to the abuse of civil forfeiture the "permanently only after a trial" part isn't true these days.

Re: $7.5B In Stolen Bitcoin from 2016 Bitfinex Hack has just been moved

#254

Post by runeks » Thu, Apr 15, 2021, 6:24 AM UTC

bob33212 wrote: post #176

kjrose wrote: post #148

You see. This is what bitcoin so fascinating... it is absolutely impossible to hide a transaction. So imagine the field day the irs would have with this if everyone used it. They basically would be able to send bills to owners of wallets. And anyone ever caught working with an undesirable would be able to have their funds more or less locked up. So now, we all watch as billions of stolen money moves and we know the m…

I wonder how many bitcoin people understand the history of banking regulations. Banks do not want to be accessory to crimes. They make plenty of money legally. So when the government says we know that you helped someone steal billions of dollars so we are going to shut you down, the banks will quickly offer to track and report and block people.

And when a corrupt federal agent asks a bank to delete records, because they’re allegedly part of a secret investigation, they also comply. This happened in the Silk Road case, but the immutability of the Bitcoin blockchain revealed their transactions.

Re: $7.5B In Stolen Bitcoin from 2016 Bitfinex Hack has just been moved

#255

Post by [deleted] » Thu, Apr 15, 2021, 6:27 AM UTC

nknealk wrote: post #8

Here’s an interesting question — if you receive BTC from one of these addresses as payment for something, do you refuse it? You know it’s stolen and you might worry someone else who you might pay in the future would be able to track down that it’s stolen, so do you ask for “clean” BTC that isn’t linked to known theft? I don’t necessarily know the answer here. This is something that you can’t do with paper bills

[deleted]

Re: $7.5B In Stolen Bitcoin from 2016 Bitfinex Hack has just been moved

#256

Post by runeks » Thu, Apr 15, 2021, 6:29 AM UTC

schmichael wrote: post #15

nknealk wrote: post #8

Here’s an interesting question — if you receive BTC from one of these addresses as payment for something, do you refuse it? You know it’s stolen and you might worry someone else who you might pay in the future would be able to track down that it’s stolen, so do you ask for “clean” BTC that isn’t linked to known theft? I don’t necessarily know the answer here. This is something that you can’t do with paper bills

> if you receive BTC from one of these addresses as payment for something, do you refuse it? You cannot refuse a BTC transaction. You could return it in a subsequent transaction, and pay the transaction fee, but I would imagine your address would be forever tainted by a number of illicit address/transaction tracking algorithms.

> […] but I would imagine your address would be forever tainted by a number of illicit address/transaction tracking algorithms.

Not if those algorithm are any good.

In Bitcoin, you can’t taint an address just by sending funds to it, since all transactions to the same address create separate “outputs” that must be redeemed separately.

Re: $7.5B In Stolen Bitcoin from 2016 Bitfinex Hack has just been moved

#257

Post by Kinrany » Thu, Apr 15, 2021, 6:43 AM UTC

spinny wrote: post #94

nknealk wrote: post #8

Here’s an interesting question — if you receive BTC from one of these addresses as payment for something, do you refuse it? You know it’s stolen and you might worry someone else who you might pay in the future would be able to track down that it’s stolen, so do you ask for “clean” BTC that isn’t linked to known theft? I don’t necessarily know the answer here. This is something that you can’t do with paper bills

AFAIK exchanges will not accept certain outputs, this is probably based on taint analysis. I believe the FIFO method [1] is the most accurate and probably used by exchanges [1] https://arxiv.org/pdf/1906.05754.pdf

FIFO would mean that non-tainted funds added after tainted are also locked.

Re: $7.5B In Stolen Bitcoin from 2016 Bitfinex Hack has just been moved

#258

Post by alcover » Thu, Apr 15, 2021, 7:00 AM UTC

o-__-o wrote: post #137

alcover wrote: post #107

Earlier quoted context omitted.

ATMs might already be recording serial numbers I've been wondering about this forever. Say John gets bills from the ATM then pays dealer Dylan for weed. Dylan then buys a beer at a bar. If Dylan gets convicted, and banks collaborate with the police, then John gets subjected to - at least - parallel reconstruction.

Plausible deniability wrecks that entire thesis (someone existing between John and Dylan such as a gas station)

Gas station isn't someone. It's an endpoint, as the bar in my story. If the gas station cashier takes from the register to get a bier, you're right. If not, my thesis still holds I think.

Re: $7.5B In Stolen Bitcoin from 2016 Bitfinex Hack has just been moved

#259

Post by hof » Thu, Apr 15, 2021, 7:14 AM UTC

ericsoderstrom wrote: post #27

pie420 wrote: post #23

Earlier quoted context omitted.

You can definitely do this with bills... You realize when a bank gets robbed the serial numbers are tracked and confiscated when they show up, and often lead to the theives

If someone pays you in cash, do you really look up the serial numbers of all the bills you receive?

The kidnapper of https://en.wikipedia.org/wiki/Gerrit_Jan_Heijn was caught because a teller recognized a bill number that he had spent

Re: $7.5B In Stolen Bitcoin from 2016 Bitfinex Hack has just been moved

#260

Post by miskin » Thu, Apr 15, 2021, 7:53 AM UTC

alcover wrote: post #258

o-__-o wrote: post #137

Earlier quoted context omitted.

Plausible deniability wrecks that entire thesis (someone existing between John and Dylan such as a gas station)

Gas station isn't someone. It's an endpoint, as the bar in my story. If the gas station cashier takes from the register to get a bier, you're right. If not, my thesis still holds I think.

What if I pay with 100 Euro bank note and get back "tainted" 50 Euro note and then pay in bar? Bank notes are not just collected and sent back to bank.