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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

#171

Post by Aissen »

Retric wrote: post #40
Aissen wrote: post #28

Earlier quoted context omitted.

Yup, for Bitcoin it would mean having the mining power of a big pool, indeed.

No, just a secret block that isn’t broadcast to everyone. 1 block a week is plenty to pull this off and that’s just 1/1,000th of the worlds mining power. Unless you get really unlucky and the block fails to enter the block chain letting someone else gets credit for the transaction.

I'm curious what it's like, so here is a small calculation. Some metrics:

- 144 blocks per day are mined on average

- the current network hashrate is 145M TH/s

- a 100 TH/s rig is about $10k.

The investment to be able to have full control of mining one block on average, without electricity, internet and storage :

- per week: you'd need 143k TH/s (145M / (144 * 7)), so about $14M of investment in just the mining rig (provided you can buy it all)

- per month: you'd need 33k TH/s, so $3M of mining rig investment.

- per year: you'd need 2.7k TH/s, so about $270k in mining rig equipment.

Of course, there are a lot of variables here (e.g hashrate is highly variable), but this gives a general idea.

All this for a "washing" method that heavily implicates the miner: the address of the new coins is still known, it's not really "clean", just an unusual transaction.

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

#172

Post by wpietri »

malka wrote: post #153
wpietri wrote: post #141

Earlier quoted context omitted.

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

Then moving the capital is not legal.

Sure, but they are not trying to avoid taxation, which is the claim I was addressing.

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

#173

Post by loceng »

mdavis6890 wrote: post #165
ccity88 wrote: post #14

I get that money laundering is always linked to criminal activity, but how have we always just accepted the lack of personal privacy when it comes to finance? Privacy is a feature, not a bug; and whilst crypto may not be the way forward, I hope one day we can reach a solution that has both privacy and also safety. The language used by law enforcement is quite alarming, it suggests that they should be privy to ALL tra…

It's important to realize that attribution - knowing which human got which money when - is actually very important in many contexts, particularly when a lot of money is involved. This allows for an un-do button in the case of mistakes, fraud, etc. If I'm wiring my down payment for a house for $200k, it's nice to know that if I fat-finger the receiving account I can get the money back. How would you feel paying your d…

I believe the $900M was merely paid earlier than it needed to be, but was still owed, so why the transaction wasn't reversed.

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

#174

Post by vmception »

wpietri wrote: post #121
seanhunter wrote: post #119

Earlier quoted context omitted.

Money laundering is linked to criminal activity by definition. It literally means introducing the proceeds of criminal activity into the legitimate financial system. https://www.investopedia.com/terms/m/moneylaundering.asp

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.

Obfuscation.

One of my other comments might be useful for you in articulating this in the future:

https://news.ycombinator.com/item?id=27317593

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

#175

Post by [deleted] »

vmception wrote: post #170
ccity88 wrote: post #14

I get that money laundering is always linked to criminal activity, but how have we always just accepted the lack of personal privacy when it comes to finance? Privacy is a feature, not a bug; and whilst crypto may not be the way forward, I hope one day we can reach a solution that has both privacy and also safety. The language used by law enforcement is quite alarming, it suggests that they should be privy to ALL tra…

> I get that money laundering is always linked to criminal activity Its not. Well, by definition it is but it is paradoxical. Money obfuscation is not illegal, but when the source of the money is illicit then money obfuscation is money laundering, but successful money laundering means nobody can ever distinguish between a licit or illicit source, and it is up the accuser to prove the source was illicit, which should…

[deleted]

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

#177

Post by legulere »

Could you wash bitcoin by colluding with miners? You create a big transaction with a high fee, but don't propagate it. You give the transaction only to the miner you colluded with. The miner gets the transaction fee which is seen as legit. They can now give you the good bitcoins and keep some of it for themselves.

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

#178

Post by Taek »

mgerullis wrote: post #107
Taek wrote: post #50

Earlier quoted context omitted.

Law enforcement watches the mempool, they can spot such transactions anyway because they know it didn't ever show up in their mempool logs.

Ok but is it really illegal? I doubt there’s a law on who can send who private BTC transactions? Or is it actually possible to mark this as laundering?

There's nothing illegal here. The goal of privacy is to avoid giving anyone a reason to suspect something. In the case of money laundering specifically, you want to turn money that looks extremely suspicious into money that doesn't look suspicious at all.

Little tiny 'gotchas' aren't going to save you from a determined investigator. They are trying to follow a trail of evidence so they can produce more evidence. What you need is a clean break, so that the investigator hits a dead end and has no productive leads they can follow.

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

#179

Post by stiltzkin »

jason0597 wrote: post #51

I'm curious for the day when Monero overtakes Bitcoin as the primary cryptocurrency for illegal dealings. Then law enforcement will truly be hopeless. Some drug markets are already dealing in Monero only. It's just a matter of time before more people catch on.

I believe Ether will overtake BTC first as primary cryptocurrency, but XMR will play a big role as an altcoin too.

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

#180

Post by NateEag »

psychlops wrote: post #103
kd913 wrote: post #48

Earlier quoted context omitted.

Data can be stored, transparent but open for legitimate purposes. I don't think it's a good idea to go to the other extreme for complete anonymity in a case like this whether the consequences result in massive criminal activities. E.G. I trust my medical data to my doctor with some reasonable confidence they are using it responsibly. Same thing here, I can trust my financial institutions with my data, but I want it t…

I prefer the innocent until proven guilty model.

In the US legal system, that refers to whether you can be punished for a crime, not investigated for one.
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