
WannaCry ransomware bitcoins move from online wallets - sjcsjc
http://www.bbc.co.uk/news/technology-40811972
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daemin
So basically what I read from this thread is that the fraudulently acquired
bitcoins will go through a mixer or tumbler in order to cover the transaction
tracks. The tumbler/mixer will take a small fee for this service. Then the
perpetrators will be able to cash out in a number of different ways.

In this case how will the tumbler/mixer not be punished by authorities. Since
because they take a cut of the illegally acquired funds they can now become an
accessory to the misdeeds.

~~~
gcb0
if I'd had a tumbler, my number one priority would be to add code to detect
those coins and keep them (redirect to my wallets after the mix).

it's not like the owners will be able to complain. not even in forums to lower
your cred.

~~~
celticninja
the owners of the coins will complain, they will do so on forums where they
can do so anonymously and the credibility/trust of the mixer is called into
question. (These tend to be forums where the users are in need of bitcoin
mixing services e.g darknet markets or hackign forums) These mixing operations
work on trust, as long as they are trusted people will use them, one too many
stories about missing coins and it will be seen as a scam and avoided.

~~~
ImSkeptical
If you were starting a rival bitcoin tumbler, would it be a good idea to
disparage your competition as thieves? What evidence would you need.

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philbarr
I wondered about this. Yes, you may have stolen some bitcoin from people but
you can't do anything with it. It's all traceable through the blockchain.

You can't buy anything directly with it because as soon as you receive the
goods the police will force the person who provided the goods to you to give
away your details.\

You can't take it out into your bank account because that will also identify
you.

So - a bitcoin mixer would seem your best bet, but even then it just makes it
"more difficult" to trace. Not sure I'd want to risk many years in prison on
that.

~~~
olegkikin
First of all, it's not really traceable. You can sell them on LocalBitcoins,
and an outside observer will never know - all you see is coins moving from A
to B.

Second of all, you can mix them with other coins, which instantly crushes all
hopes of traceability.

Example: Imagine you have wallets A (clean) and B (stolen) with 1 BTC each.
You put them both into wallet C, and then you split it again equally into X
and Y. Where is the stolen money now?

And then there are altcoin exchanges.

~~~
numbsafari
The holder of C could potentially be prosecuted for receiving stolen property,
under AML laws, or as a co-conspirator in the original theft.

~~~
koolba
If you replace bitcoin with cash, by your logic I'd be arrested for selling a
thief an apple if he paid for it with stolen cash.

That's the distinction. Is it money or is it a fenced good?

If I'm receiving currency (be it real money or bitcoin), I'm not going to
think about where it came from. It's fungible.

~~~
stephengillie
Physical dollars each have a unique serial number - aren't these sometimes
used to track criminals as they spend stolen funds? Or is that just a
Hollywood exaggeration?

~~~
kahnpro
I think it's only useful if you know which serial numbers were stolen, for
example if you give specific range of serial numbers as a ransom payment.

~~~
zeta0134
When I worked as a bank teller briefly, we had this planned out. There was a
stack of bills (usually 10s, but it was kind of random) that we were only to
give out if we were actively being robbed. They were indistinguishable from
regular currency to avoid suspicion, but the serial numbers were recorded for
tracking purposes.

This was in a small town bank, and I'm sure that larger banks have more
sophisticated policies. I'm curious to know if ATMs have any similar features.

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feral
I was an author of one of the first papers examining bitcoin's lack of
anonymity.

People understand things a lot more now, but from this thread, in my opinion
people still don't 'get it'.

The traceability issue is not magically removed by mixing - at least not in
steady state, once the system matures.

To see this, consider a future where a single large exchange, lets call it
Xchange, has substantial market share - (maybe like Coinbase). Let's assume
they are a respectable company regulated by the laws of the USA, and that law
enforcement tells them they have to comply with existing laws on stolen
property.

Some company Bobcorp has $10M of bitcoins stolen, and pays someone to follow
the coins. If those coins ever show up in the Xchange's addresses, Bobcorp is
going to call the police and file suit to recover them.

Obviously there aren't literal coins in bitcoin, but Bobcorp is going to go to
court and explain their block chain analysis to the judge, and the judge is
maybe going to ask Xchange where the coins come from. And that'll be an
interesting court case. But it seems unlikely the judge will be persuaded by
ideological arguments about how this not-really-fungible currency should be
treated as if we all pretend its fungible, and will instead be asking Xchange
for its KYC records about the customer that lodged the coins.

Now, here's the important bit: the above doesn't have to actually play out.
All that has to happen is that Xchange starts worrying about the above playing
out, and starts getting a tiny bit wary about accepting funds that come from
reported thefts - starts seeing them as a tiny bit riskier, a tiny bit more
likely to end up in court, than other bitcoin.

Once any non-trivial amount of entities start thinking like this, (and it
seems obvious they will - I would if I was running any business; but imagine
the most conservative bank who eventually reluctantly participates in the
maturing ecosystem) then the 'stolen' coins instantly become worth less than
obviously clean ones.

And as soon as you live in that world, what happens mixers?

Suddenly you run the risk of putting in your good clean coins, into the mixer,
because you care about privacy, and getting back tainted coins, implicitly
worth less.

Suddenly mixers become a lot less useful.

It seems inevitable to me that if bitcoin continues to grow that this is how
things will play out. It's still a super interesting system but, like I've
been saying for years, it's got a ton of downsides around anonymity and
privacy, and in steady state may be the perfect Orwellian currency rather than
the perfect cypherpunk one, and I don't think mixers make this go away.

~~~
adriancooney
That is an extremely interesting point of view, thank you for sharing. Another
thought: say some criminals pass their money through a mixer and like in the
scenario you described, it's deemed worthless to any exchanges/payment
processors because it's "dirty". Does this mean that, say they were feeling
sour they couldn't book a hotel on Booking.com, could they potentially taint
any public wallet address by sending tiny amounts of bitcoin from their
tainted wallet to them? Can a user prevent/block coins being transferred to
their account in the blockchain? If your prediction comes through, this could
spell a disaster for Bitcoin because potentially every wallet could be tainted
and thus all coins traced back to criminal activity.

As a side note, it's interesting to think that those "dirty" coins/wallets
will be destined to circle around the black markets forever.

~~~
feral
You've got to imagine that in a future world this priced proportionally to the
level of taint; addresses are devalued proportional to the degree of taint,
maybe with some premium for completely clean addresses.

I'm not saying a centralized system will enforce this, just it seems like a
natural consequence that will emerge.

------
nthcolumn
Via www.shapeshift.io Zeurich to monero, terms broken, authorities aware and
in hot pursuit presumably.

[https://www.bloomberg.com/news/articles/2017-08-03/wannacry-...](https://www.bloomberg.com/news/articles/2017-08-03/wannacry-
linked-bitcoin-wallets-have-been-emptied-analysts-say)

------
heeen
They just need to write a new ransomware that forces their victims to launder
their bitcoins for them /s

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philfrasty
Coinbase seems like a competent partner in cashing out stolen money.

[1] [https://www.law111.com/coinbase-faces-possible-liability-
in-...](https://www.law111.com/coinbase-faces-possible-liability-in-recent-
class-action-lawsuit)

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celticninja
I imagine that these were moved to allow the holder to be able to restore the
wallet in a Bitcoin Cash (BCH) wallet and acquire another bunch of coins.

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thanatropism
Then, didn't the fork give the guy a number of Bitcoin Cash coins?

~~~
chupasaurus
With the same wallet address so it's traceable the same way on different
blockchain.

