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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

#141

Post by wpietri »

irtigor wrote: post #133
wpietri wrote: post #121

Earlier quoted context omitted.

I think that's a good general definition. But sometimes people want to move capital unlinked to crime across borders. They then use exactly the same mechanisms money launderers use. If you have a term for that you like better, I'd be interested to hear it.

That's only true if they are trying to avoid taxation, which is also ilegal (even if you think it is justified). Moving capital from a place to another doesn't use the same mechanisms of money laundering if done legally.

That's not the case. As mentioned elsewhere in thread, some places have limits on capital movement.

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

#142

Post by MikeDelta »

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.

I really admire your faith in human kind.

I am fairly certain that many citizens would be tempted to become creative in their transparency (or activities) if they knew they would never get caught. Such is human nature.

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

#143

Post by DennisP »

vmception wrote: post #139
DennisP wrote: post #136

Earlier quoted context omitted.

The trouble is, there's no way to know that the seller threw away their copy of the private key.

The point is that crypto can operate in a temporarily trusted environment. The subsequent owner does need to rotate addresses as soon as possible. It is the blockchain analysis that can't tell the difference between the prior owner moving to another address that prior owner controls, or a different owner moving addresses.

There's little practical difference between:

a) I give you my wallet, and you immediately send the coins to a new address to protect against my (potential) copy of the wallet, or

b) I just send the coins to your new address myself.

Either way, the blockchain records a transfer from my address to your new address.

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

#144

Post by gamblor956 »

CryptoPunk wrote: post #114
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.

If a tax requires the entire citizenry surrendering all of their financial privacy, it should be abolished.

By definition, financial transactions are not private, because they necessarily involve a counterparty.

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

#145

Post by ChrisClark »

digianarchist wrote: post #130
vmception wrote: post #128

The XMR to sXMR bridge is live and applauded by both the Monero community and Secret Network community Secret Network also has an AMM called SecretSwap for exchange to any other asset All smart contract execution on the secret network is private, as in the variables and current state is not stored on chain for perusal, all assets are smart contracts

Is the Monero community still working on atomic-swaps? If the can pull that off it would make it very difficult to trace money laundering activities.

They actually just launched XMR/BTC atomic swaps today. So I'm sure a bunch of atomic swap tech on Monero is now possible.

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

#147

Post by wpietri »

meowface wrote: post #125
wpietri wrote: post #117

Earlier quoted context omitted.

There's a difference between privacy and secrecy. If I'm involving my bank, what I'm doing is already not secret. My bank knows. But normally they keep those things private, because it's generally not anybody's business. There are occasions where society's interest in preventing crime outweighs personal privacy, and one way to look at that is that when something (like, say, ransomware) has an effect on other people,…

I think this is a valid argument. I also think a corollary argument is that it's also valid to decide not to use a bank, though, and do a lot of things purely through cryptocurrency even if you're not doing anything shady or illegal, since, as another comment says, "as long as there are reasonable checks and balances" isn't necessarily a guarantee you can always rely on: https://news.ycombinator.com/item?id=27315773…

People definitely have differing views on what "reasonable checks and balances" mean; here in the US we have whole movements of people with... strong opinions on the topic: https://en.wikipedia.org/wiki/Sovereign_citizen_movement

I agree it's valid not to use a bank; one could try to conduct all one's business in cash. But in practice, people doing that are often doing something criminal, so people using cryptocurrency should not be surprised that they end up being treated with the same level of scrutiny as people running around with briefcases of cash. That is to say, their attempts at secrecy may result in a practical loss of privacy.

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

#148

Post by martinko »

JefffJohn555 wrote: post #73
b10c wrote: post #36

Earlier quoted context omitted.

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

Brilliant! I remember thinking about this problem a few years back: what stops miners of a blockchain just ignoring transactions/anything from certain entities. So it's good that there exists a way to track such behaviour, if it is occurring.

Economics. If miners consistently ignore certain transactions, there is space for new miners to enter the market and earn super-normal profit. After the next difficulty adjustment cycle, the old, censoring miners may be priced out.

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

#149

Post by martinko »

ulzeraj wrote: post #57

> “They’re basically a trustless version of a mixer and it’s all done within software,” said Robinson, noting that an open-source project called Wasabi Wallet was the dominant player in the space. Funny because Wasabi requires a lot of manual coin control to preserve anonymity. Samourai Wallet automates most of these and offers obfuscating tools.

> Samourai Wallet automates most of these and offers obfuscating tools.

And does not have a desktop client. Next to useless.

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

#150

Post by vmception »

DennisP wrote: post #143
vmception wrote: post #139

Earlier quoted context omitted.

The point is that crypto can operate in a temporarily trusted environment. The subsequent owner does need to rotate addresses as soon as possible. It is the blockchain analysis that can't tell the difference between the prior owner moving to another address that prior owner controls, or a different owner moving addresses.

There's little practical difference between: a) I give you my wallet, and you immediately send the coins to a new address to protect against my (potential) copy of the wallet, or b) I just send the coins to your new address myself. Either way, the blockchain records a transfer from my address to your new address.

The difference is in the liability incurred.

So you're the blockchain analysis firm for the Department of Justice, and you're like "omg omg look the coins are moving! omg omg look its going to a centralized exchange account lets go subpoena the records and find out who has the KYC and identifying information behind that account."

DOJ busts down the door "aha! got you!"

If it was the person that actually hacked or did drug trafficking, then they found that person and charge them with that, wire fraud, money laundering etc.

If it was just the recipient then the investigation is still ongoing and much lesser charges are possible. The DOJ would at best case try to find out who the "kingpin" is by overcharging the second person, but the primary observation is that the DOJ has not stopped any particular activity. Either way, its still not quite what happens:

The reality is that it is many hops between unrelated people before it hits a centralized exchange that is subpoena-able at all. People.don't.need.or.want.fiat. Especially not a lot of it at any given time. Even hedge funds take in-kind investments of crypto to create a new limited partner. People don't need to cash out first and then invest that cash.

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