Topic: [Blacklist] of unreliable, 'taint proclaiming' Bitcoin services / exchanges - page 5. (Read 2791 times)

That's the thing - ignoring made up taint is the default position. All you have to do to ignore taint is set up bitcoin wallet and give your address to customers. Let's encourage more of that.

BitPay does a whole lot of shady stuff, including demanding KYC not just from merchants who use it but also the customers who shop at those merchants via BitPay, and freezing any payments they don't like. I find that they are predominantly used by businesses who are quite happy to comply with taint nonsense, and so are quite happy for BitPay to demand KYC from all their customers and do all their dirty work for them.

Note there is a difference between the BitPay payment processor and the BitPay wallet, but given how utterly horrendous the former is I would never touch the latter (or indeed anything from the same company).

I guess then we would need to onboard businesses who are willing to get educated, understand that taint is nonsense and explicitly stand against it. Only with a business explicitly declaring in ToS (or wherever) Bitcoin as fungible am I willing to include it on a whitelist.

BitPay is censoring UTXOs? It's actually listed on https://bitcoin.org/en/wallets/desktop/, funnily - together with Wasabi wallet. Not a good look if it has similar problems.

Yup, but without it, we will end up with two tiers of bitcoin. "Clean, government approved bitcoin", which are accepted anywhere and trade for a premium, and "tainted, government condemned bitcoin" which are refused by most businesses and users and are worth less. Yes, bitcoin itself will still be decentralized and censorship resistant, but if the only thing I can do with my "tainted" bitcoin is trade it back and forth for other "tainted" bitcoin with other "tainted" users, then it will have failed as a currency. Allow me to quote myself:


Yeah, fair points. It would just be nice to be able to get a bit of a feel for a new merchant I've never used before first, rather than having to make a small test purchase first to see if they are going to take issue with my coinjoined/mixed bitcoin. Although simply avoiding any merchant which uses BitPay already gets you a good chunk of the way there.

Difference is that Bitcoin is digital and cash doesn't have history unless you mark them with special tracking devices, that is unrealistic for large amount of money.
Casino in cooperation with government could also spray invisible paint on bills to track their movement and alert authorities when you pay with them anywhere.
One way we could mitigate this is by using something like Bitcoin Notes on paper, that could be used for Bitcoin offline cash payments.

There are probably more exchanges and services that don't care about history of coins, but it would be impossible work collecting correct information about them for this whitelist.
One day exchange could accept any coins, tomorrow for whatever reason they could confiscate them, so I would give advantage to something that is really decentralized.

I believe the mistake was made when the first exchanges faced regulatory pressure and gave in / came up with 'taint'; claiming they are doing their best to freeze / block transactions from 'fraudulent activity' so that authorities leave them alone and don't treat them as 'businesses helping in internet crime'. Then they probably also noticed that it's a great way to make a bit of extra money. Remember, precedent was created beforehand in fiat land: https://en.wikipedia.org/wiki/Paypal#Criticism_and_controversies

The issue with stuff like this is that when you have a precedent, like normalizing a notion of 'taint' in Bitcoin and normalizing account closures due to 'past illicit activities' of coins, it is hard to explain that almost everyone was wrong about this for over 10 years.
I remember years ago, when even my own knowledge of Bitcoin was a lot worse, 'taint' was already a relatively known / normal concept. 'Clean coins' it was called back then. You wanted to get 'clean coins' not to get in trouble... This is years ago. Imagine establishing such terms and then having to re-educate people. It's going to be hard honestly.

The other day, I discovered JoinMarket's ANN thread, which is funny since it's being brought up a lot (even in below quote). Look at what belcher had to say about taint in 2015.

Do you understand? Even guys who endorsed and developed CoinJoins, didn't apparently fully 'get it' back then.

Funnily, those that do ignore the nonsense, aren't really often businesses but rather decentralized open-source platforms..
Actually when I created this blacklist, I contemplated making a whitelist, but I believe it's going to be a lot of work to maintain it, and businesses also tend to either give themselves the right to steal funds due to 'taint' or say nothing on the topic at all; never have I read ToS that specifically say all coins are accepted equally.

Yes, fight censorship by using businesses that accept BTC as BTC.

Careful now, citizen! You've just expressed an opinion which is out of line with the Official Acceptable Opinions Manual^TM of the Central Chain Analysis Database. All your addresses will be blacklisted for 7 days in order to give you time to thoroughly reread the manual and reeducate yourself as to what is acceptable public speech. We trust this won't happen again!

But there is no incentive for an exchange to do so. Each exchange knows they can ask ridiculous KYC and that they can arbitrarily freeze or steal some users' coins, because every other centralized exchange is doing it too. They'll only start paying attention when they start losing business to DEXs or peer to peer trading. But with the general growth of bitcoin, for ever users which leaves a centralized exchange to use non-KYC trading methods instead, two more newbies come along and sign up without realizing they are sacrificing everything that bitcoin stands for.

There are indeed exchanges which rightly completely ignore any taint nonsense, such as Bisq and LocalCryptos, and coinjoin implementations such as JoinMarket. Perhaps we could also start a whitelist of online businesses such as gift card sellers which are known to pay no attention to taint and freely accept mixed or coinjoined coins, etc.

Exactly, thats why im saying all these useless regulations should be contested in court by businesses from the beginning, because there isn’t even a way that they could be implemented in a non nonsense way, thats what i tried to point out. Bitcoin is similar to cash, so they should make the case that it should be treated as such and not give in to any bs that these regulators want to push on them.

Sadly yeah, i just hope some legitimate businesses will start to care and do something. It would separate them from the rest. But its unlikely to happen, they all just comply to nonsense.

Agree, if everyone starts to inform their circle we can move something, many newbies simply don’t understand it yet, but they will if we explain it correctly.

A centralized database with information on all transactions sounds like a bank! That doesn't even need a blockchain.
Unfortunately, many people are very comfortable with centralized organisations that know far too much about them.

Which would be a massive attack on bitcoin. A single centralized register controlled by whom? And if that single entity decides an address is blacklisted, then that address can't transact with any registered business in the country/world? Completely centralized nonsense. Thankfully it is unlikely to come to this since blockchain analysis companies have little incentive to work together to create such a database while they can continue to convince governments and exchanges they provide useful information rather than just pure guesswork, and that they should be paid for this guesswork.

Pointing it out to these services achieves nothing. Even when individual users try to explain to them the basic concept of how bitcoin works (i.e. coins which 10 transactions ago came from a casino are not still "tainted"), they don't care. Easier for them to just steal the user's coins and close their account. The only thing which will work is mass action. If everyone stopped using Coinbase today because of their support of taint, you can guarantee they would abandon it by tomorrow and be lobbying the government to change the rules.

Yeah, but laws and regulations also need to be enforceable, having a central register with all business addresses is a nightmare and can also easily be dodged when businesses just create new addresses that arent registered somewhere. Chain analysis isnt sufficient to even decide this, as oeleo already pointed out. And well known addresses neither. Bank accounts are much more static and from central entities, not pseudonymus and traceable even if a business used another account to dodge regulations. Maybe theres some room here to push back against these regulations by pointing out that theyre generally unenforceable and harm their customers and business models in the process. And maybe theres different ways to comply with regulations that dont have these drawbacks.

As you say, the distinction here is that they are discriminating against the entity, not against the coins.

I don't ever want anything to do with Coinbase. I'll never sign up for their exchange, and I'll never do business with them under any circumstances, since they are pretty much antithetical to bitcoin in my mind. But I would obviously be insane to say I never wany anything to do with any coin which has passed through Coinbase. Since I'm not an idiot, I recognize that it is impossible to accurately identity which outputs contain coins which were once held by Coinbase, and that any transaction can be (and often is) coins changing hands.

Saying you don't want to deal with a casino is fine. Refusing certain coins from me because those coins were once withdrawn from a casino by someone else* is entirely unacceptable.

Education. Remind everyone that blockchain analysis and taint is fancy guesswork which frequently gets thing wildly wrong. Remind everyone that as soon as bitcoin is involved in any transaction, it is impossible to say which bitcoin has ended up where. Remind everyone that taint isn't a real thing, and it only exists to allow blockchain analysis companies to make profit and to allow exchanges and governments to steal your coins. Remind everyone to stop using any exchange or service which is attacking and undermining bitcoin by enforcing such absolute nonsense.

*Based on guesswork and provably false assumptions.

Yes, cash is my benchmark as well. Hence I'd like coins that have been withdrawn from a casino into a personal wallet, to be accepted anywhere.
It's just that if you 'withdraw' from the casino directly into an exchange's 'deposit' address, you never 'had the cash in your hands', and it's basically a direct money transfer (think: bank transfer) from a casino to an exchange. Since most businesses wouldn't accept bank transfers from casino bank accounts, I can see how they don't want the same through Bitcoin.

Casino, as well as exchange, and other businesses' addresses are well-known most of the time, though.

Against taint? I believe so, yes. Against accepting a direct payment from a casino, I don't think so. That's really a kind of 'exception' - as I said before - that exists for a long time. I remember before crypto casinos, there were obviously fiat online casinos, and some banks didn't allow withdrawals from them. Because from a pure business perspective, there are no 'casino user accounts'; the bank is actually getting a bank transfer from a casino's bank account number. For legal reasons, in many countries they simply aren't allowed to receive payments from casinos' bank accounts, or they don't want to, not to get involved into money laundering investigations if / when they happen.

Yup, but im also asking myself if there’s a possibility for businesses to go against this legally. It could be argued that they can’t really link addresses to specific types of businesses themselves, so maybe there’s some possibilities to get similar statuses to cash businesses.

Really good point, with all these factors there must be a way to make a case against the legitimacy of all these measures. Would love to hear some lawyers opinion about this. Im also wondering why companies are just complying instead of making some cases themselves.

Bitcoin is supposed to be electronic cash. If I get cash from a casino, there's no way anyone can know, and nobody is going to refuse my cash for that reason. Ideally, Bitcoin should be treated the same.

In my opinion, there is a difference between receiving a payment directly from a casino's address or receiving a coin that in the past has been withdrawn from a casino.
The former is normal business procedure: some businesses are simply not allowed to receive a payment from a casino, be it in crypto or fiat. That's nothing new.

The latter is what's really the problem. Why should a business deny working with me because the coins I hold, I received e.g. for working from someone online, who themself got it by cashing out their casino account? This is not 'making business with casinos', since I'm obviously not one. I just received coins for my honest work, from someone who gambles. This is the 'taint problematic'.

I absolutely agree with this. If you don't directly refuse to do business with an individual or other business because of whatever reason, that's your right. But marking coins 'tainted' and banning them forever is bullshit and a bad excuse for stealing coins.

Of course they aren't achieving anything in terms of 'protecting' people or anything like that. My suspicion is honestly that these businesses are routinely stealing some people's funds. Look back at PayPal: in the beginning, they stole customers' money by closing their accounts at will, too. Nowadays it's well known that they went specifically after smaller accounts because they knew people wouldn't bother reporting it or pursuing the issue any further for a few bucks. But do that to hundreds of thousands of accounts and you got yourself some nice cash to work with.

Rearding casinos, it's kind of a special case. Ever since they existed (in physical form) it was an easy way to launder money: buy chips, play a bit, return them, and get new cash, unlinked to your deposit. Therefore, some businesses refuse to get payments directly from a casino, since in case of a money laundering investigation, they would get in the spotlight, too. However money I got in my personal wallet, should be accepted by everyone. After all, if I withdraw money from the casino and then do a bank transfer or spend fiat at a store, nobody cares either.

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So you wanted to deposit coins from mining to cex.io and they froze them, asking for proof. But proof of what? Also with your friends - what are they claiming is the reason for freezing their funds?
Are they claiming that your coins come from illicit activities or what exactly?

Yup definitely. Im just trying to make a case for, that if we look at all these measures in a result oriented way, we gotta acknowledge that they don’t achieve anything they’re trying to achieve. Not even something simple as blocking a casino really works, without affecting innocent users. In the end casino money will still reach the service, so nothing was prevented. So why have it in the first place. There’s many good reasons to try to fight illicit activity and it might not even always be ill-intended by businesses. But we have more and more consequences creeping in, without even having solved anything.

There can also be many different views and one person might be ok with something that someone else isn’t, but everyone who uses Bitcoin has certain goals that are aligned with each other. We want Bitcoin to succeed, we want the freedom to transact. Businesses don’t wanna get crushed by regulators and Bitcoiners want businesses to adopt Bitcoin. I think if we agree to one strategy here, that is no coin taint at all(is probably the most efficient solution), then we can achieve our goals much easier and withstand much more pressure together. If Businesses keep going against their customers and get more and pressure from regulators, it will be much easier to crush them. And it makes it harder for Bitcoiners to use Bitcoin. So im thinking that maybe we could use one clear shared strategy in this case, even when there’s differing opinions.

I think what n0nce meant is: It's okay for a business to not want to be included into illicit activity and fight it, but that should happen as long as they don't invade in people's privacy and enforce non-effective tactics that do more harm than good, if they do any good at all.

Unfortunately for businesses that accept bitcoin, there's no way to try to prevent criminal activity, without harming their customers, because there's no way to do in cash either way. Ultimately, there's no way for these businesses to prevent that criminal activity.

I got my coins,I told them I get the coins from my mining activity,I provided them all the related screenshots and they agreed to release funds then.However the problem is with a lot of friends of mine,they have also earnings from mining,working online and a couple of other normal places (not gambling,not war related and not a mixer for sure),they even were asked if a wallet is yours by asking to sign a message,they did sign a message and since one week no nothing at all.They Cex got all the data needed,how much time do they need to verify further.

Agreed. Coinbase's "you're not allowed to send coins to or from a casino" demands are the oldest form of "taint" I've seen, and somehow the Bitcoin community largely accepted that. As if Coinbase has any business checking how people spend their money.
I've never used Coinbase for many reasons, but this adds to the list.