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The U.S. cracked a $3.4B crypto heist and Bitcoin’s anonymity

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Re: The U.S. cracked a $3.4B crypto heist and Bitcoin’s anonymity

#231

Post by nayuki »

kjellsbells wrote: post #123
noduerme wrote: post #36

Earlier quoted context omitted.

If you trade in and out for cash, in person with a counterparty, from a self-hosted wallet that you never use to send or receive from any other wallet that's connected to an exchange... then yes. The use case for this is mainly moving money over borders.

This makes bitcoin sounds like a complicated technical reimplementation of hawala https://en.wikipedia.org/wiki/Hawala?wprov=sfla1

No, Bitcoin is like sending cash directly to the recipient. Lightning is exactly like cryptographic Hawala, with many hops along the way.

Re: The U.S. cracked a $3.4B crypto heist and Bitcoin’s anonymity

#232

Post by Cthulhu_ »

mrcheesebreeze wrote: post #222
carabiner wrote: post #34

Earlier quoted context omitted.

Bitcoin is not, and never was, anonymous.

In general maybe, but if you were selling something online and received bitcoin on a wallet not associated with your irl identity you can be anonymous, its just not practical because you need to de-anonymize to get that into actual cash unless you really know what you are doing. Monero is better.

Better only in that it's untraceable, but unfortunately due to bad actors that makes it a dodgy or morally indefensible thing to use.

Re: The U.S. cracked a $3.4B crypto heist and Bitcoin’s anonymity

#233

Post by Cthulhu_ »

ziml77 wrote: post #218
phyzome wrote: post #19

Say it with me: "Bitcoin is not, and never was, anonymous."

The idea of using Bitcoin or Ethereum to pay for anything always seemed insane to me. I don't want my info about payments I've made to be public, espcially not in a form where, by design, it will never disappear!

I mean bank and CC transactions are remembered, but due to them being privacy-sensitive information, this is tightly secured and (depending on where you are and probably a load of other factors), deleted after a mandatory retaining period.

Re: The U.S. cracked a $3.4B crypto heist and Bitcoin’s anonymity

#234

Post by Cthulhu_ »

_fizz_buzz_ wrote: post #156
phyzome wrote: post #19

Say it with me: "Bitcoin is not, and never was, anonymous."

That is not true. The original Satoshi paper has a whole section about it. So the intention of privacy was - at least in theory - there from the beginning.

And it is private, in that the blockchain is a ledger of IDs and transactions with no information about the people behind them.

The blockchain is anonymous enough, it's just that all transactions are public (forever) and conversion to real money requires identity.

Re: The U.S. cracked a $3.4B crypto heist and Bitcoin’s anonymity

#235

Post by Cthulhu_ »

skizm wrote: post #114
aaronmdjones wrote: post #50

Earlier quoted context omitted.

> The statute of limitation for wire fraud is 5 years. How did he get charged under that statute when he stole funds from Silk Road in 2012? This is a very simplistic view and this mistake is made a lot. There are several reasons why the statute of limitations could either be longer than 5 years or not yet expired even though it is 5 years: - Tolling. This is when the suspect exits your jurisdiction, preventing you f…

Dang, so if this person just left the BTC in a cold wallet for 5 years, did no more crimes, and stayed put, he could have gotten away free and clear? Or does #3 essentially mean they can just extend the limit forever if they can come up with a plausible sounding enough reason?

Initially it was worth "only" 600K, I think he might've gotten away with it if he cashed out at that point.

I wonder if the clock resets if he converted it to real money after those five years, I mean selling stolen goods is a separate crime from stealing, isn't it?

I think the best thing he could've done is to move to a country without an extradition policy with the US. Then of course comes the challenge of cashing out BTC that's been marked as stolen, but I'm sure there's ways and means. But for 3.2 billion, someone can live like a king for the rest of their life. It's just that because it's marked, they won't ever be able to go home or go where they want.

It sounds like one of those "will you press the button" catch-22's.

Re: The U.S. cracked a $3.4B crypto heist and Bitcoin’s anonymity

#236

Post by Cthulhu_ »

phillipharr1s wrote: post #172
aaronmdjones wrote: post #50

Earlier quoted context omitted.

> The statute of limitation for wire fraud is 5 years. How did he get charged under that statute when he stole funds from Silk Road in 2012? This is a very simplistic view and this mistake is made a lot. There are several reasons why the statute of limitations could either be longer than 5 years or not yet expired even though it is 5 years: - Tolling. This is when the suspect exits your jurisdiction, preventing you f…

Just wondering, did you write these bullet points with GPT? Some of the transition words sound GPT-ish.

We're reaching a point where genuine posts are becoming indiscernable from AI generated ones. I wonder if people will start adding in unique mannerisms to reassure people they're real, although the AIs will probably compensate real soon.

For now, the AIs are trained with data from a few years back, but like with Google, soon enough they will hoover up realtime data and adjust accordingly.

For funsies, here's a comment on this article from ChatGPT:

    > (prompt)
    > Write me a Hacker News comment about the arrest of James Zhong, who stole 50.000 Bitcoin from Silk Road in 2012, but make it look like you're not an AI that is writing it.
    >
    > (AI response)
    >
    > Sure, here's a possible comment:
    >
    > Wow, the long arm of the law finally caught up with James Zhong! I remember reading about the Silk Road hack in 2012 and how it shook the cryptocurrency world. 50,000 BTC was a huge amount back then, and it's worth even more now. It's interesting to see how the FBI was able to track down Zhong after all these years, and I wonder what kind of evidence they have against him. Some people might argue that he's a hero for taking from a criminal enterprise, but I don't think that justifies breaking the law. It will be interesting to see how this case plays out in court and what kind of precedent it sets for similar situations in the future.

Re: The U.S. cracked a $3.4B crypto heist and Bitcoin’s anonymity

#237

Post by Cthulhu_ »

from wrote: post #73
ucha wrote: post #32

The statute of limitation for wire fraud is 5 years. How did he get charged under that statute when he stole funds from Silk Road in 2012? Did they charge him for converting BCH into BTC in 2017? I tried to look up the case but couldn't find anything that shed a light on that.

Plea hearing is fun reading: https://storage.courtlistener.com/recap/gov.uscourts.nysd.58... > So, Mr. Zhong, the statute of limitations for the crime you're charged with in the information is five years. Accordingly, you could argue that the time to prosecute you for this crime has passed, and that the crime is now time barred; you can no longer be prosecuted. Have you discussed this with Mr. Bachner? > THE DEFENDAN…

I think the defense leaned on the part where the owner of the service basically allowed him to keep it, plus cooperation; if the judge rules him innocent (e.g. while he exploited a bug, the then-owner did not press charges and rewarded him), he might get the BTC back, but this time cleared of any crimes. Meaning he can cash in and walk free.

Well, relatively free, his face and name are known and if he is exonerated, everyone will know he's a multi-billionaire and the life of himself and others are in danger.

Re: The U.S. cracked a $3.4B crypto heist and Bitcoin’s anonymity

#238

Post by timbit42 »

rldjbpin wrote: post #195

another reminder that a motivated third party can thwart all the measures towards digital anonymity. can't wait for a similar case but with xmr "cracked" using quantum computers.

that problem can be solved and they are working on fixing it.

Re: The U.S. cracked a $3.4B crypto heist and Bitcoin’s anonymity

#239

Post by ETH_start »

acdha wrote: post #230
ETH_start wrote: post #229

Earlier quoted context omitted.

1. Your choice to encrypt metadata can in fact make it more difficult to identify criminal correspondents. Your choice to use Tor similarly makes it more difficult to track criminals' web usage. Both of these help criminals to engage in certain nefarious actions. To generalize, every user of a privacy protocol increases the protocol's anonymity set, and thus its utility to all users. In other words, Tornado Cash shar…

Yes, which is why most people do not run Tor exit nodes because it’s inherently riskier to have your equipment directly involved in legal activity. Tor is actually safer than this since the traffic is encrypted so a node operator can quite confidently say they don’t know the contents. Some of the charges in this case will depend on whether these developers were in fact similarly unaware of who their heaviest users we…

The developers deployed the Tornado Cash code, and subsequently, had no control over it. They did control one of the front-ends to it, and they instituted blocking of transactions originating from hacks in that front-end. But criminals were free to use any front-end to access the deployed code, and there was no way for the developers to stop that.

In any case, what is being criticized in this particular thread is OFAC prohibiting all Americans from using Tornado Cash code. This is unprecedented, and clearly outside OFAC's statutory powers to sanction "entities".

Despite the US Treasury's claims, Tornado Cash is not in any way an entity, as it is not controlled by any party. It is simply code, running autonomously on a massively distributed blockchain. When someone uses it, they are using zero knowledge proofs to encrypt their transactions. The fact that this act of encryption adds their activity to the same anonymity pool as criminal activity is no more an argument for banning this encryption protocol as it is for banning any other encryption protocol.

Re: The U.S. cracked a $3.4B crypto heist and Bitcoin’s anonymity

#240

Post by acdha »

ETH_start wrote: post #239
acdha wrote: post #230

Earlier quoted context omitted.

Yes, which is why most people do not run Tor exit nodes because it’s inherently riskier to have your equipment directly involved in legal activity. Tor is actually safer than this since the traffic is encrypted so a node operator can quite confidently say they don’t know the contents. Some of the charges in this case will depend on whether these developers were in fact similarly unaware of who their heaviest users we…

The developers deployed the Tornado Cash code, and subsequently, had no control over it. They did control one of the front-ends to it, and they instituted blocking of transactions originating from hacks in that front-end. But criminals were free to use any front-end to access the deployed code, and there was no way for the developers to stop that. In any case, what is being criticized in this particular thread is OFA…

Again, the problem is not the code but the running service. If you are involved in processing a transaction, you are required to follow applicable laws and risk consequences if you don’t. The technical details might explain how you got involved but they don’t remove the legal requirement.
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