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The rise of crypto laundries: how criminals cash out of Bitcoin

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Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#61

Post by n_ary »

exo762 wrote: post #46
MikeDelta wrote: post #39

Earlier quoted context omitted.

I understand your point. However, privacy cannot shield one from tax and legal obligations. It is not just the proceeds from criminal activities, but also tax evasion (from the rich or companies) and terrorism financing.

You can use cryptocurrency which hides all of your transactions (like zcash) and pay your taxes as a law abiding citizen. There is no conflict here. Tax systems rely on citizens reporting anyway.

> You can use cryptocurrency which hides all of your transactions (like zcash)

Nit: only if you use zcash shielded wallets(very rare & resource hungry) are your assets private. Most wallets use transparent addresses, which is kind of similar to normal ones.

Given current landscape, only monero is defacto private.

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#62

Post by ip26 »

exo762 wrote: post #46
MikeDelta wrote: post #39

Earlier quoted context omitted.

I understand your point. However, privacy cannot shield one from tax and legal obligations. It is not just the proceeds from criminal activities, but also tax evasion (from the rich or companies) and terrorism financing.

You can use cryptocurrency which hides all of your transactions (like zcash) and pay your taxes as a law abiding citizen. There is no conflict here. Tax systems rely on citizens reporting anyway.

Tax systems follow a “trust but verify” model.

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#63

Post by cheeseomlit »

dan-robertson wrote: post #12
joshfraser wrote: post #7

Every dollar bill in your wallet has trace amounts of cocaine on it. They probably spent some time tucked in some dancers g-string too. All money is "dirty". It's just a question of how many times it needs to trade hands before we collectively agree to treat it as "clean" again.

Neither of the things you’ve described make money dirty. Just because a dollar bill comes into contact with cocaine (often in cash sorting machines in banks), it doesn’t mean that it is the proceeds of crime.

I think his point is that a sizable portion of physical cash is involved with crime, that's one of the benefits of using cash so it only stands to reason- Yet everybody still uses cash regardless. Though I'm sure this same argument will be used in the future to justify a transition to a cashless society where all transactions are traced

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#64

Post by xwdv »

lifeisstillgood wrote: post #37

I am fascinated by the rise of 'chain analysis' companies - that started as 'aint it fun' and became 'hey we can help the cops track ransomware' quite quickly. The thing that fascinates me is ... we could do (very similar) analysis on "normal" bank accounts - on a much larger scale but still. I wonder how much criminal activity would be revealed?

Once chain analysis becomes trivial, a major selling point of cryptocurrencies will be defeated. What then is the point?

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#65

Post by goldenkey »

Aissen wrote: post #25
crispyporkbites wrote: post #22

Earlier quoted context omitted.

I don’t think that works at all? Your buddy would have to mine that specific block to get the reward, which is based entirely on chance. You’d also have to spend as much on the POW electricity and hardware to have a chance of getting reward anyway.

If you know you mine blocks regularly (e.g once per day or week), it's entirely doable. It's the miners who chose what transactions go into a block. In this scheme, the transaction is "secret", only one miner received it.

The transaction isn't secret after it gets mined in the block and added to everyone's main chain. The only use of this would be to conceal one's IP for the transaction broadcast but it's really not necessary anyway because the bitcoin mesh network does a repeating broadcast from all peers to all peers, of all transactions in the mempool. Just use a secure connection and only broadcast to a single peer that you can verify to be a standard "dumb client." Odds are they won't have any logging of IPs and will rebroadcast the transaction, which will propagate it to the entire network.

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#66

Post by chii »

NovemberWhiskey wrote: post #60
lifeisstillgood wrote: post #37

I am fascinated by the rise of 'chain analysis' companies - that started as 'aint it fun' and became 'hey we can help the cops track ransomware' quite quickly. The thing that fascinates me is ... we could do (very similar) analysis on "normal" bank accounts - on a much larger scale but still. I wonder how much criminal activity would be revealed?

> we could do (very similar) analysis on "normal" bank accounts I don't think so really, the fact that the ledger is public is really the thing that makes this is a credible model. In the absolutely general sense of "if all banks around the world opened all their books and banking secrecy laws didn't exist, and if we somehow had the ability to trace through cash transactions" then sure, theoretically (and again not a…

> but none of that is even remotely probable.

it's not likely, but it's possible. Laws can be used, if the political will is there. It's not like encryption where you can't actually force it!

The thing is, this data can contain sensitive information, which existing gov't may want to keep hiding (like CIA slush funds etc).

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#67

Post by Taek »

cheeseomlit wrote: post #56
Taek wrote: post #54

Earlier quoted context omitted.

Analytic techniques are getting better and the cutting edge research strongly suggests that to a sufficiently sophisticated attacker, Monero is fundamentally about as private as bitcoin. Zcash from a theoretical perspective is a lot stronger, but I believe from a practical perspective (due to things like weaknesses in the mempool privacy) is also not very private.

>Monero is fundamentally about as private as bitcoin. That's contrary to what I've read, care to expand? As far as I know the IRS is still offering a bounty to crack Monero

https://gist.github.com/DavidVorick/0dbd4906bfa50b7d8dba23f7...

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#68

Post by roofwellhams »

xwdv wrote: post #64
lifeisstillgood wrote: post #37

I am fascinated by the rise of 'chain analysis' companies - that started as 'aint it fun' and became 'hey we can help the cops track ransomware' quite quickly. The thing that fascinates me is ... we could do (very similar) analysis on "normal" bank accounts - on a much larger scale but still. I wonder how much criminal activity would be revealed?

Once chain analysis becomes trivial, a major selling point of cryptocurrencies will be defeated. What then is the point?

Monero fixed this problem, right?

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#69

Post by NovemberWhiskey »

chii wrote: post #66
NovemberWhiskey wrote: post #60

Earlier quoted context omitted.

> we could do (very similar) analysis on "normal" bank accounts I don't think so really, the fact that the ledger is public is really the thing that makes this is a credible model. In the absolutely general sense of "if all banks around the world opened all their books and banking secrecy laws didn't exist, and if we somehow had the ability to trace through cash transactions" then sure, theoretically (and again not a…

> but none of that is even remotely probable. it's not likely, but it's possible. Laws can be used, if the political will is there. It's not like encryption where you can't actually force it! The thing is, this data can contain sensitive information, which existing gov't may want to keep hiding (like CIA slush funds etc).

>it's not likely, but it's possible.

OK, sure, in about the same sense that world government is possible: hardly anyone is asking for it and there is a tremendous level of investment in the status quo by all the people with political power.

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#70

Post by neb_b »

b10c wrote: post #36
alcio wrote: post #29

Earlier quoted context omitted.

yes, you can email it to your miner buddy. it's possible to spot such transactions if they violate transaction forwarding rules (aka standardness rules) but not consensus rules. for example, a transaction greater than 100kB is not standard but still valid.

I've build a tool to detect differences between _my local_ mempool and what miners include in their block (there will always be slight differences). This is primarily intended to detect censorship, but can also detect transactions that never entered _my_ mempool. See https://miningpool.observer

This is really neat. Have you thought about trying to bundle it as an app that can be downloaded on umbrel?
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