
EU proposal to clamp down on Bitcoin curb terrorism funding - ghosh
http://mobile.reuters.com/article/idUSKCN0T81BW20151119?feedType=RSS&feedName=topNews&utm_source=twitter
======
mikekchar
The headline is misleading. This is a Reuters reporter reporting that some
ministers are planning to discuss non-bank methods of money transfer at the
upcoming emergency meeting. The report seems to get it's information from a
"draft conclusion" document, but does not reference it.

The headline suggests the EU has already decided to clamp down on Bitcoin, but
it is far from clear to me that it will even be discussed. All we know is that
some unnamed officials want to talk about it (together with transfers of
precious metals, etc).

~~~
dang
Thank you. We changed the title to reflect that.

------
Sealy
Good timing. Yesterday, the UK Treasury released an official document stating
that Bitcoin and cryptocurrencies have the lowest risk and lowest likelihood
of money laundering amongst the areas of finance they studied. Guess who came
first, Banks. Good job HSBC! You have laundered more money ever then the
entire cryptocurrency industry is worth... 10x over

[http://www.coindesk.com/uk-treasury-digital-currencies-
low-m...](http://www.coindesk.com/uk-treasury-digital-currencies-low-money-
laundering-risk/)

HM Treasury link to the National Risk Assessment carried out by the Home
Office: [https://www.scribd.com/doc/290214176/UK-NRA-
October-2015-Fin...](https://www.scribd.com/doc/290214176/UK-NRA-
October-2015-Final-Web)

~~~
bko
I'm a big supporter of bitcoin and I have a superficial understanding of how
the public ledger works, but why is it not incredibly easy to launder money
through bitcoin? Since the currency is fungible, aren't there services that
allow you to send bitcoins and it will send move your bitcoin around through
many other accounts, including bitcoin from deposits of others? The end result
being that the end state of some bitcoin cannot be traced back to the origin.
How would someone reasonably trace that with any degree of certainty?

~~~
lallysingh
It's not anonymous. All transactions are trivially followable, up to an
anonymizer. But anonymizers have to eventually send the money to a
destination, so their effect is pretty muted - just track the flow and user
the resultant amounts to differentiate.

I think people look at bitcoin and hear "crypto" and immediately think opaque
and unbreakable. Neither are true, but first impressions matter a lot.

~~~
VMG
> just track the flow and user the resultant amounts to differentiate.

The usual mitigation for this is to use common denominations for all inputs
and outputs.

------
mootothemax
Given how extremely traceable bitcoin payments are, I'm pretty surprised that
they're not _trying_ to get Bad People to use Bitcoin, whether publicly or
behind-the-scenes.

I mean, in a way, maybe this is what this story is all about: a great big
advertisement saying "Come use this _completely anonymous_ payment system,"
with a sly nudge and a wink because bitcoin's nothing of the sort.

Just imagine: a plot is discovered, payment details made via bitcoin stumbled
upon - and now you have a long list of _every transaction_ those people have
ever made using Bitcoin!

(for the inevitable bitcoin cult members wanting to chime in about "tumbling"
or "fog" services, aka bitcoin money launderers, 1. they're still traceable
and 2. there's not enough money going through them to successfully launder a
four-digit amount, let alone anything greater.)

~~~
bduerst
It's impossible to track bitcoins when people transfer in and out of other
currencies between bitcoin addresses.

The process is called _tumbling_ , and it's primarily how bitcoin tax evaders
use it now to get around the "public ledger".

~~~
mootothemax
>It's impossible to track bitcoin laundering when people transfer in and out
of other currencies, between bitcoin addresses.

>The process is called tumbling, and it's primarily how bitcoin tax evaders
use it now to get around the "public" ledger.

I very briefly addressed this at the bottom of my comment.

In short order:

\- Tumbling is traceable: throw a beefy server at the list of transactions,
and since you know how much money arrived in someone's possession on a given
date, you can now trace it backwards by crunching the numbers. Analysing long
lists of transactions like this is something computers are _really_ good at.

\- But that doesn't matter, because tumbling sites _can 't_ work: they don't
have enough capital in them to successfully launder more than a few play
dollars at a time.

~~~
bduerst
I think you're under the assumption that currency conversions are traceable.
Once you convert bitcoins to dollars or yuan, your beefy server can't see the
remaining transactions.

For example: 20 BTC -> $4000 -> 25000 yuan -> 4 new addresses @ 5, 10, 2, & 8
BTC

The only way to trace these is to compromise the exchange servers, get account
information, and subpoena transactions from the banks. Very difficult to do
given the international nature of these exchanges and banks.

~~~
mootothemax
>I think you're under the assumption that currency conversions are traceable.

I was specifically addressing tumbling services. I'm guessing that you accept
those services are easy to compromise (heck, for all we know, various
governments might operate the current ones) which is why you bring up currency
conversion.

>For example: 20 BTC -> $4000 -> 25000 yuan -> 4 new addresses @ 5, 10, 2, & 8
BTC

Let's turn this around: you have a list of transactions, you know when they
took place, you know where the money ended up, and now you're tracing the line
backwards, knowing that at some point, there will be a connection (or
connections) to other transactions _at least as big as this one_ ; why do you
think this is so hard to analyse?

>The only way to trace these is to compromise the exchange servers, get bank
account information, and get transactions from the banks. Very difficult to do
given the international nature of these exchanges.

Not really, given how little is known about some exchanges' operators.

~~~
celticninja
huge list of assumptions there, but having read your responses you dont really
understand bitcoin, transactions or tumblers. Tumblers can delay sending
transactions by anywhere from hours to days, so matching 1 input with 1 output
would be dificult at the very least. If 1 input is split into 6 outputs of
varying sizes, sent at various times how would a beefy server help you. Say I
send in 10BTC to a tumbler and my output is split into 6 outputs of between 1
and 2 btc each, these are issued to different addresses over a 5 day period.
How do you trace that in amongst all of the other several thousand
transactions that occurred in that 5 day period? I would genuinely be
interested in how you think this would work, as would many in law enforcement
and the bitcoin ecosystem.

------
DamnYuppie
I didn't see in this article where they actually gave a valid reason for the
crack down. Is there evidence that the funds for these attacks, or any others,
originated from bitcoins?

The initial reaction of my inner knee-jerk skeptic says this is another
example of those in power, this time banksters, not letting a good crisis go
to waste.

~~~
patrickk
There's no evidence for this, they are using the attacks as an excuse.

It's like the encryption hysteria. Look at this blatant propaganda from the
BBC:
[http://www.bbc.com/news/technology-34842854](http://www.bbc.com/news/technology-34842854)

Some choice quotes:

 _" They are not using the big obvious systems at all," he tells the BBC._

They were using _SMS_.[1]

 _" They are all now using the OTR [Off the Record] protocol, which offers
end-to-end encryption," he says._

 _" The arrests that are going on now have come from a trawl through
metadata"_

This is actually how they found the other would-be attackers:

 _European media outlets are reporting that the location of a raid conducted
on a suspected safe house Wednesday morning was extracted from a cellphone,
apparently belonging to one of the attackers, found in the trash outside the
Bataclan concert hall massacre. Le Monde reported that investigators were able
to access the data on the phone, including a detailed map of the concert hall
and an SMS messaging saying “we’re off; we’re starting.” Police were also able
to trace the phone’s movements._

The amount of bullshit and propaganda coming out is scary.

This is the website of one of the BBC's experts, for added hilarity[2].

[1]
[https://www.techdirt.com/articles/20151118/08474732854/after...](https://www.techdirt.com/articles/20151118/08474732854/after-
endless-demonization-encryption-police-find-paris-attackers-coordinated-via-
unencrypted-sms.shtml)

[2] [http://www.pmsommer.com/](http://www.pmsommer.com/)

~~~
sohcahtoa
Peter Sommer's nom de plume was Hugo Cornwall - a name Brits who got their
start in the 80s will recognise. I'm not sure where the hilarity is?

------
joshstrange
_sigh_ this /feels/ like it's in the same vein as "ban encryption". As in "we
have no proof this is happening but the Paris attacks give us a window where
we can push through whatever BS we want and silence any critics with 'Do you
want this to happen again?'"

------
tlrobinson
So is this a case of _" never let a serious crisis go to waste"_, or _" We
must do something. This is something. Therefore, we must do this"_?

~~~
arethuza
The Politician's syllogism:

[https://en.wikipedia.org/wiki/Politician's_syllogism](https://en.wikipedia.org/wiki/Politician's_syllogism)

------
oneJob
Check out the book "Money: The Unauthorized Biography". It does an excellent
job making an argument that a sovereign that loses control of the primary
currency loses control of political primacy. This isn't just about terrorism
or money laundering. It's very much about political power.

review 1: [http://www.nytimes.com/2014/04/13/books/review/money-by-
feli...](http://www.nytimes.com/2014/04/13/books/review/money-by-felix-
martin.html?_r=0)

review 2: [http://www.cato.org/publications/commentary/book-review-
mone...](http://www.cato.org/publications/commentary/book-review-money-
unauthorized-biography)

review 3: [http://www.theguardian.com/books/2014/jul/08/money-the-
unaut...](http://www.theguardian.com/books/2014/jul/08/money-the-unauthorised-
biography-by-felix-martin-review)

------
tankenmate
More importantly than their intent, exactly how do they expect to enforce this
new "policy"? It seems to me to be as enforceable as banning individual to
individual cash transactions. Good luck with that.

~~~
dtech
You can ban/heavily regulate legitimate usages of the currency, which devalues
it. If no-one outside of illegitimate circles can accept/process bitcoin money
laundering becomes a lot more difficult, since the bitcoin loses value for
legitimate purposes.

~~~
Caprinicus
This is a great idea. The legitimate users will have to find someone to
offload their bitcoin to, and since the legitimate outlets are shut down,
they'll have to do local, difficult to trace trades. And since the only people
buying bitcoin at that point is going to use it for illegal purposes... wait
this is a terrible idea

------
tomp
Will they also clamp down on Transferwise?

The fallacy here is, Bitcoin doesn't actually _move_ money. It can only move
_ownership_ of money. If I want to finance terrorism, there must already be
someone with e.g. $1M where I want it (in Islamic State), so that I can trade
3000 BTC with him/her.

~~~
Lunar_Lamp
TransferWise hasn't done anything with Bitcoin since April 2013 -
[https://transferwise.com/blog/2013-04/notice-to-bitcoin-
user...](https://transferwise.com/blog/2013-04/notice-to-bitcoin-users-
april-2013/)

~~~
yc1010
Transferwise accepts payments from debit cards or to their eastern European
bank (Latvia or something), and then they pay from their US bank for example.

They do ask for ID documents and perform AML checks, but then again so do all
proper bitcoin exchanges with the exception of the shady btc-e from Russia or
thereabouts.

But its not like bad guys are afraid of using fake IDs (as seen in Europe this
last week) which brings the obvious question as to why they would bother with
all that when they can just use cash and traditional banking.

The whole article is click bait of the highest order based on fud.

\----

If the powers to be want to hit ISIS where it hurts how about destroying their
oilfields, oil refining and transport capabilities. A few armed drones can do
this on the cheap remotely. Make it clear that any oil extraction, processing
or transport equipment in the area controlled and sympathetic to ISIS will be
destroyed and grant these scum their wish if living in the middle ages.

------
dtech
It looks to me more like this was something that was already planned and now
they're using the Paris attacks as an excuse. Bitcoin is a lot less anonymous
than cash, since everyone can follow who pays what to whom, and it's often
possible to tie a wallet to an identity.

------
jmnicolas
Before they had the "pedonazis", now they have the terrorists to justify
whatever they want to ban.

Since the terrorists used cars for their attacks (there was even mention of a
Volkswagen Polo involvement) I propose we ban cars for our collective safety.

I wonder, did the terrorists ever used cash, a debit or credit card ? Maybe we
should ban this too then.

~~~
mootothemax
>I wonder, did the terrorists ever used cash, a debit or credit card ? Maybe
we should ban this too then.

FYI The various known terrorists/terrorist organisations lists are a large
part of Know Your Client (KYC) checks.

------
nutmeg
"It was difficult to transact legitimate business with cash in the Sprawl; in
Japan, it was already illegal."

------
vpkaihla
Perhaps we should be looking at GNU Taler
([https://taler.net/](https://taler.net/)) instead. They're supposed to
provide personal liberty and many of the other benefits of crypto currencies,
but without criminal security.

------
teekert
The Saudis use Bitcoin? Within the EU?

------
vdaniuk
So it goes. Terror attacks provide opportunities for special interest groups
to advance their agenda while public is frightened and irrational. Makes you
think about the implicit beneficiaries of terrorism, doesn't it?

~~~
JustSomeNobody
Indeed, governments around the globe absolutely love terrorism. It's good for
business.

~~~
chki
I think this is not true for several reasons. One (only in multi-party
systems) is the rise of new political parties (for example here in Germany)
that are very "right-winged" and strongly oppose the current government. I
think it can not possibly be in the governments interest to loose power to
these groups.

------
gtpasqual
EU should be focusing on the funders, but social repercussions would be
negative towards certain groups.

I mean, if the payment process was the problem, they should ban money.

------
MichaelGG
How much funding is really needed? They talked about this after Sept 11, but
that always seemed like a rather cheap thing to pull off. Certainly
"bootstrappable" given a few dedicated people. Some flight sim time, perhaps a
few lessons to get some insight into ops, and uh, go? Really, the creative
spark and meeting of a few collaborators was the only hard part.

How much funding did Breivik need?

------
badloginagain
So we shouldn't let refugees in, even though no refugees were part of recent
terrorist events.

We should outlaw encryption, even though the attack was planned with
unencrypted off the shelf technology.

We should crack down on bitcoin, even though the attack wasn't funded with
bitcoin.

Do lobbying groups just wait for this kind of thing to happen? It seems
completely ridiculous to me.

Then again, I'm not afraid.

~~~
logfromblammo
They do, actually. "Never let a good crisis go to waste."

As morally abhorrent as most of us may find the practice of profiting on human
suffering to be, we often forget that there are people out there whose
morality is almost entirely incompatible with our own, or who lack any sense
of morality whatsoever. For a variety of reasons, those same-species parasites
are drawn to positions where they can manipulate overly credulous humans for
their own gain.

These propaganda campaigns are roughed out ahead of time, like a Mad Lib, and
the details are filled out after any relevant crisis occurs, with any
inconvenient facts stretched out and re-tailored to fit the narrative
structure.

It's not a conspiracy. Those people are not working together. They just
coincidentally fired their bullets on the pull of the same trigger.

The terrorists didn't use Bitcoin? Well, in that case, imagine how much worse
it could have been if they did use it! They didn't use encryption? How many
more would have died if they did?

------
pakled_engineer
Terrorists have traditionally raised their own local funds through organized
crime. They kidnap for ransom, extort businesses and target drug dealers and
other black markets in their neighbourhoods to jack and tax for money. Al
Qaeda in Iraq started as highwaymen robbing commercial trucks and assassins
for hire, the realIRA group robs and kills dealers, 70s terrorists robbed
armored cars and banks, ect. One of the Boston bombers jacked and murdered
some local drug dealers and cops wrote it off as common gang crime.

Since they already are criminals doesn't seem that any money laundering
crackdown will make any difference, they will just extort somebody else to
receive their money through all these regulation hoops they specialize in
being thugs.

------
imgabe
I don't think it's about money laundering, which isn't even mentioned in the
article. With Bitcoin, governments can't order anyone to freeze the accounts
like they can with a bank. That makes it harder to prevent terrorists from
accessing funds.

------
tsmarsh
Then ban cash. Either we're for anonymous currency or we're not.

~~~
PythonicAlpha
They are already planning it (I think, I heard it already from Sweden). But to
ban cash will be much more difficult than Bitcoin, since so many people will
shout up -- with Bitcoin, who cares, when a few hackers who are probably
already involved in illegal activities (drug, sex, copyright violations, ....
you name it) will be mad.

~~~
SyneRyder
There are already stores in Sweden where cash is not accepted. One notable
example is the ABBA Museum, where ABBA songwriter Björn Ulvaeus believes a
cashless society will reduce crime:

An ABBA Star's Campaign for a 100% Cash-Free Sweden
[http://www.bloomberg.com/bw/articles/2014-10-28/abbas-bj-
rn-...](http://www.bloomberg.com/bw/articles/2014-10-28/abbas-bj-rn-ulvaeus-
does-his-part-to-make-sweden-cashless)

~~~
PythonicAlpha
While a cashless society might reduce crime (for a little while), it will
definitively bring an Orwellian system onto us.

Also, we have seen, that there are enough corrupt banks and bankers around, so
crime will go on ... (money laundering also does work today in company with
banks).

------
logingone
Tinkering around the edges. Why don't they clamp down on religion?

~~~
teekert
Why don't they clamp down on freedom? Oh wait...

~~~
logingone
Freedom? Religious people have been trained like animals from youth. There's
no choice there. That's not freedom.

~~~
bduerst
I'm sorry you haven't had any positive life experiences with people of
religion.

~~~
logingone
I've said nothing of my experiences with people of religion. Please control
your knee jerk.

~~~
bduerst
Your aggression towards and stereotyping people of religion is speaking
enough.

------
return0
What is the evidence here. If i were a terrorist i would avoid any online /
electronic "anonymous" transfer method like the plague. Good old print oil
money is the best.

~~~
maze-le
They (Daesh/IS) are accepting donations in bitcoin, I don't think it is beeing
used for something else. I recently read an article, describing how a teenager
was scentenced to prison, because he showed how such a transaction can be
done.

[http://www.dw.com/en/us-teenager-sentenced-to-prison-for-
sup...](http://www.dw.com/en/us-teenager-sentenced-to-prison-for-supporting-
islamic-state-online/a-18680144)

------
mtgx
I assume this is because they found the vast majority of terrorism funding is
done through Bitcoin, and not just another knee-jerk reaction to "crypto" \-
right?!

------
cubano
Never underestimate the money laundering "bandwidth" of a shipping container
full of cash crossing the oceans[1]

[1][http://people.exeter.ac.uk/watupman/undergrad/ron/methods%20...](http://people.exeter.ac.uk/watupman/undergrad/ron/methods%20and%20stages.htm)

------
Fuxy
This is so stupid do they really think that terrorists care about their own
privacy when they know that they are not going to come out of the attack
alive.

And if they believe that they are going to catch the activity before the
attack happens they are smoking crack.

They signal to noise ratio is just too high.

Plus they can always just use cash.

------
phusion
Here's the non mobile link

[http://www.reuters.com/article/2015/11/19/us-france-
shoootin...](http://www.reuters.com/article/2015/11/19/us-france-shoooting-eu-
terrorism-funding-idUSKCN0T81BW20151119)

------
guard-of-terra
What can we do to counter this and teach them a lesson so this does not happen
again?

Where is our community long term planning?

They (people that nobody voted for doing what they do) are engaged in this
unrightful activity without no punishment in sight. This is wrong.

------
Kinnard
Bitcoin is not anonymous. Something must be done to disabuse journalists of
this notion!

It's misinformation and particularly dangerous for people who need actually
anonymous payments like dissidents living under oppressive regimes.

~~~
mirimir
Yes, people hear "crytocurrency" and think "hidden". Bitcoin just uses
cryptographic signing for authentication, to prevent theft and double
spending. It's the opposite of anonymity.

------
drcode
Hi Barbra, meet Streisand!

------
nly
RIP localbitcoin.com?

As of right now individuals can trade bitcoin through via personal bank
transfers thanks to sites like this. I see this being squeezed to death
eventually, which is a real shame.

------
hosh
This is why we can't have nice things.

------
late2part
This is how they will try to ban cash.

~~~
drcode
I think Bitcoin is slowing the demise of cash- I think the powers that be will
prefer the devil they know (cash) over the devil they don't know
(cryptocurrency).

------
cabalamat
Bitcoin is a good deal less anonymous than cash.

~~~
aianus
But also a good deal easier to smuggle across borders, just saying.

------
iamsohungry
Never let a good disaster go to waste...

------
benevol
"Carpe Diem!"

Sincerely,

 _Your banking industry_

------
AC__
Quite possibly the dumbest thing I've ever read on here. I hate to be cliche,
but to quote Chomsky, "Everyone’s worried about stopping terrorism. Well,
there’s really an easy way: Stop participating in it". Regardless, the CIA and
Mossad didn't use bitcoin to finance ISIS.

------
nickysielicki
Down with terrorism! Woo hoo! Take _that_ ISIS!

