Coinbase's recent Hacking Team stuff

olliecrypto

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The idea of an exchange blacklisting coins that may have come from a hacked wallet, or a scam ico, etc is interesting in it's application, but I worry that if someone could blacklist something so broad, how hard would it be to have that exchange freeze accounts that unknowingly had their wallets used as a routing system.
I am assuming when MEW got hacked, or when companies mass produce thousands of wallets for their private keys, that some person trying to diminish their tracks by routing their ill gotten funds thru these wallets could end up getting an unknowing users wallet / address also blacklisted.
Then again, maybe i'm just paranoid and over thinking things due to my espresso drinks this morning.

Quote from: cellard on March 11, 2019, 11:22:58 PM

Quote from: gentlemand on March 10, 2019, 11:00:14 AM

Quote from: Harlot on March 10, 2019, 10:42:44 AM

That's also my concern, we don't know how exchanges will act to this kinds of situations where which coins will they confiscate from us. Since there is no law mentioning how they will connect the dots then they are in full control on what coins will be connected in that situation, they might just pull the plug and get everything including from people who received stolen coins whom they aren't even are aware are stolen in the first place.

Bitcoin is property. Property is subject to law. Exchanges can't just help themselves to your property. Things may be a little woolly at present but you're not wide open to whatever whims occur to them. There's a process that needs going through.

That's conditional on using an exchange that has identifiable ownership of course.

But this is my point and the problem: Bitcoin is property only in certain jurisdictions, in others it's considered other things, so other laws apply. Then there's the different ways in which certain jurisdictions deal with property.

So what we have here is that you deposit Bitcoin an exchange, and then depending on were you and the exchange are sitting, different things will happen. Which means, you must understand the ongoing laws, and you must look up for past situations to compare with what you are trying to do.

As of right now, depositing coins which you don't know the history origin from in a Bitlicense-friendly exchange, or in general any of the major US-esque exchanges at least, is risky. Im sure they have internal blacklist servers for certain coins from some histories i've heard.

We need laws that will protect us from this bullshit, then we need to support exchanges that are hosted within jurisdictions those laws apply.

cellard

legendary

Activity: 1372

Merit: 1252

Quote from: gentlemand on March 10, 2019, 11:00:14 AM

Quote from: Harlot on March 10, 2019, 10:42:44 AM

That's also my concern, we don't know how exchanges will act to this kinds of situations where which coins will they confiscate from us. Since there is no law mentioning how they will connect the dots then they are in full control on what coins will be connected in that situation, they might just pull the plug and get everything including from people who received stolen coins whom they aren't even are aware are stolen in the first place.

Bitcoin is property. Property is subject to law. Exchanges can't just help themselves to your property. Things may be a little woolly at present but you're not wide open to whatever whims occur to them. There's a process that needs going through.

That's conditional on using an exchange that has identifiable ownership of course.

But this is my point and the problem: Bitcoin is property only in certain jurisdictions, in others it's considered other things, so other laws apply. Then there's the different ways in which certain jurisdictions deal with property.

So what we have here is that you deposit Bitcoin an exchange, and then depending on were you and the exchange are sitting, different things will happen. Which means, you must understand the ongoing laws, and you must look up for past situations to compare with what you are trying to do.

As of right now, depositing coins which you don't know the history origin from in a Bitlicense-friendly exchange, or in general any of the major US-esque exchanges at least, is risky. Im sure they have internal blacklist servers for certain coins from some histories i've heard.

We need laws that will protect us from this bullshit, then we need to support exchanges that are hosted within jurisdictions those laws apply.

Harlot

hero member

Activity: 1806

Merit: 672

Quote from: gentlemand on March 10, 2019, 11:00:14 AM

Quote from: Harlot on March 10, 2019, 10:42:44 AM

That's also my concern, we don't know how exchanges will act to this kinds of situations where which coins will they confiscate from us. Since there is no law mentioning how they will connect the dots then they are in full control on what coins will be connected in that situation, they might just pull the plug and get everything including from people who received stolen coins whom they aren't even are aware are stolen in the first place.

Bitcoin is property. Property is subject to law. Exchanges can't just help themselves to your property. Things may be a little woolly at present but you're not wide open to whatever whims occur to them. There's a process that needs going through.

That's conditional on using an exchange that has identifiable ownership of course.

As long as the cryptocurrencies can be reclaimed after my explanation or proof on how I received those cryptocurrencies I am good with it. Proving my ownership in court is another thing which I am trying to avoid, one of which is probably because the expense won't be outweigh by the cryptocurrencies I will be trying to claim. If the exchanges have a good system of recovery in place I won't be worried about me having a huge chunk of my savings inside an exchange.

gentlemand

legendary

Activity: 2604

Merit: 3056

Welt Am Draht

Quote from: Harlot on March 10, 2019, 10:42:44 AM

That's also my concern, we don't know how exchanges will act to this kinds of situations where which coins will they confiscate from us. Since there is no law mentioning how they will connect the dots then they are in full control on what coins will be connected in that situation, they might just pull the plug and get everything including from people who received stolen coins whom they aren't even are aware are stolen in the first place.

Bitcoin is property. Property is subject to law. Exchanges can't just help themselves to your property. Things may be a little woolly at present but you're not wide open to whatever whims occur to them. There's a process that needs going through.

That's conditional on using an exchange that has identifiable ownership of course.

sheenshane

legendary

Activity: 2548

Merit: 1234

I've heard that coinbase were trying to partner with the Google company right?
What happened to their said partnership? Did it go well?

Let's go back to the topic, their move to cut ties with the hacking spyware backlash is really a nice?^ move but there's a loophole from it.
It is when you have received a coin from an illegal hacker and your coin will be blocked by the system because of it. You will also be identified as a criminal and that hurts so much.

I hope the coinbase can help us with this concern and solve this.

Harlot

hero member

Activity: 1806

Merit: 672

Quote from: gentlemand on March 07, 2019, 07:48:39 PM

I have advised OP to go off and build an orphanage before his head explodes with paranoia. The advice stands.

'Clean' coins will never be worth more apart from to fools. The vast percentage of coins have traces of filth on them. As soon as that's penalised it's all over.

Flat out stolen coins or coins that are directly identified as nefarious profits will no doubt be grabbed wherever possible which is fine by me. That's as far as it'll ever go.

That's also my concern, we don't know how exchanges will act to this kinds of situations where which coins will they confiscate from us. Since there is no law mentioning how they will connect the dots then they are in full control on what coins will be connected in that situation, they might just pull the plug and get everything including from people who received stolen coins whom they aren't even are aware are stolen in the first place.

magneto

hero member

Activity: 1666

Merit: 753

Quote

Most likely what they are going to achieve is that there will be an OTC market were people will pay premiums for freshly mined coins and what have you.

This is not out of the equation. I think that people have already suggested that this would happen in the past as well.

Though my main concern is the fact that exchanges, hosted wallets etc. is able to do this since they have full custody of your coins, and you don't hold your own private keys. If they want to, they can cite a series of excuses and ask you for source of funds, or flag your fund origin as "dirty".

So in reality, the fungibility of your coins decreases once you send coins to an exchange which you don't hold your funds on. It's sort of like exchanges forcing you to do KYC/AML AFTER you deposit, which a lot of the times is solely based off of their 'suspicion', and not legislation.

cellard

legendary

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Merit: 1252

Quote from: Lucius on March 07, 2019, 08:52:26 AM

Coinbase is just going in direction which was inevitable, this had to happen sooner or later. I'm not sure whether they are doing it because they want it, or under certain pressure from the institutions in USA. It is quite understandable that they want to know the origin of cryptocurrency, same as any bank want to know from where your fiat is come, but as cellard points out this is very big problem for users.

In what way would the average user know the origin of his coins, we all probably have some dirty coins in wallets, and no matter how you mix them there's no way we can be sure that these coins was not part of some illegal transactions in past.

I agree that some other options should be considered for buying / selling coins, after KYC&AML will the next step be proof of coin origin, PCO?

My additional implied point was that mixing addresses within other people that are probably mixing coins of at least somewhat shaddy origin would only make things worse.

I can see weird situations in which liens on coins are involved and some guy makes a case reinforced by the stupid laws at play.

My advice would be to not deposit any coins in exchanges like Coinbase, stay away from Bitlicense, and understand the risks of depositing coins at your name until decent laws are out there and exchanges being ran on said jurisdictions.

gentlemand

legendary

Activity: 2604

Merit: 3056

Welt Am Draht

I have advised OP to go off and build an orphanage before his head explodes with paranoia. The advice stands.

'Clean' coins will never be worth more apart from to fools. The vast percentage of coins have traces of filth on them. As soon as that's penalised it's all over.

Flat out stolen coins or coins that are directly identified as nefarious profits will no doubt be grabbed wherever possible which is fine by me. That's as far as it'll ever go.

1Referee

legendary

Activity: 2170

Merit: 1427

Quote from: jseverson on March 07, 2019, 12:32:13 AM

People really should keep their coins off centralized services though, as this prevents any future complications.

That's the best option, but as we have seen, not the option people tend to go for unfortunately. Good thing is that there are more and more reputable clients popping up offering multi coin support, so that people can safely take care of their own storage, and hardware wallets are getting cheaper as time goes by.

In the end, people should understand that what Coinbase is doing might not be only related to Coinbase. It's just that we read about Coinbase that people get angry and frustrated, but what people should fear even more is that what they don't read/know about. Coinbase is quite transparent in everything it does, which can't be said about other exchanges.

Other exchanges are fucking with people just as hard, but without them knowing.

Theb

hero member

Activity: 1680

Merit: 655

The problem here is where will they draw the line and start connecting it? If we are only talking about you receiving cryptocurrencies from a sender who you know is good then we have nothing to worry about. But what if the sender who you receive money from has sent you some cryptocurrencies who himself doesn't even know has some criminal origins with? Will crypto exchanges connect it to that point or will the line go deeper until a lot of unaware users will lose their funds just because they own cryptocurrencies they don't know about that are part of stolen/hacked cryptocurrencies?

Lucius

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Blackjack.fun-Free Raffle-Join&Win $50🎲

Coinbase is just going in direction which was inevitable, this had to happen sooner or later. I'm not sure whether they are doing it because they want it, or under certain pressure from the institutions in USA. It is quite understandable that they want to know the origin of cryptocurrency, same as any bank want to know from where your fiat is come, but as cellard points out this is very big problem for users.

In what way would the average user know the origin of his coins, we all probably have some dirty coins in wallets, and no matter how you mix them there's no way we can be sure that these coins was not part of some illegal transactions in past.

I agree that some other options should be considered for buying / selling coins, after KYC&AML will the next step be proof of coin origin, PCO?

avikz

legendary

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Merit: 1500

I see a significant risk in the move when Coinbase acquired Neutrino. The owner of Neutrino, Mr. Giancarlo Russo was the ex-COO of a Milan based company called HackingTeam. You will be surprised to know what Wikipedia has to say about this company,

Quote

HackingTeam is a Milan-based information technology company that sells offensive intrusion and surveillance capabilities to governments, law enforcement agencies and corporations.[1] Its "Remote Control Systems" enable governments and corporations to monitor the communications of internet users, decipher their encrypted files and emails, record Skype and other Voice over IP communications, and remotely activate microphones and camera on target computers.

Now Giancarlo heads Neutrino and I can guess the reason why Coinbase acquired them! As a common man, we have no way to know if the funds we are receiving is involved in any kind of criminal or illegal activity. I am just not ready to give up my money for the reason that I don't know! I was really happy with Coinbase as I am a long standing customer of them, but after this controversy, I have moved all my funds to a different wallet for good!

jseverson

hero member

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I don't think blacklisting coins is as straightforward as that. Blockchain analytics probably actually help in this area by verifying the source and the fact that you had nothing to do with them. That's just how I think it would work though, as I think the prospect of tainted coins not being accepted anywhere (or being seized just because) is quite ridiculous. It could be argued though, that even the slight possibility of that happening could put a premium on fresh coins, so I get where you're coming from.

People really should keep their coins off centralized services though, as this prevents any future complications.

cellard

legendary

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Quote from: Kemarit on March 06, 2019, 08:15:34 AM

Quote from: cellard on March 06, 2019, 12:41:22 AM

However you can't trust these guys. Many questions remain unanswered. They admitted they sold data among other things, no clear answers.

This is what really turns me off. The fact that they have admitted selling our data, how can we trust them? They shot themselves in the feet with this admittance, so I don't know what to say about them except to stay away from this platform.

Quote from: cellard on March 06, 2019, 12:41:22 AM

My advice is to stay safe, do not use exchanges unless the coins you deposit are from a clear origin you can prove. Most of us are good people but governments don't care and im sure they will be glad to take away your bitcoins when they can find the legal loopholes to do so.

And the scary thing is that once you withdraw them, and suddenly they freeze your account because it's under suspicions, then you can't do anything. Specially if you're going to withdraw huge amount of coins.

It's just an unnecessary risk to go the Coinbase route. They are going deep within blockchain analytics, developing big lists of flagged coins. So it's basically a lottery in which you hope that your coins that you obtained don't have any sort of shady traces on it, which is insane since it's impossible to know basically. You are just hoping it doesn't happen, but chances are it sooner or later will happen, specially if you are trading, getting payments often (like for instance, a signature campaign) and whatnot.

We need laws that will protect our property rights upon our bitcoins. The Bitcoin protocol doesn't give a fuck about lays beyond its protocol rules, but you cannot live in la-la-land and pretend laws don't matter because as soon as you deposit coins to your name in an exchange, they do matter, which is why I just see as it as a risk until these laws are well defined, or at least a jurisdiction somewhere that has these laws in which exchanges can be hosted. I know some bitcoiners teaming up with laywers trying to get this done in Wyoming, to compete against the NYC's disastrous Bitlicense.

Kemarit

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Quote from: cellard on March 06, 2019, 12:41:22 AM

However you can't trust these guys. Many questions remain unanswered. They admitted they sold data among other things, no clear answers.

This is what really turns me off. The fact that they have admitted selling our data, how can we trust them? They shot themselves in the feet with this admittance, so I don't know what to say about them except to stay away from this platform.

Quote from: cellard on March 06, 2019, 12:41:22 AM

My advice is to stay safe, do not use exchanges unless the coins you deposit are from a clear origin you can prove. Most of us are good people but governments don't care and im sure they will be glad to take away your bitcoins when they can find the legal loopholes to do so.

And the scary thing is that once you withdraw them, and suddenly they freeze your account because it's under suspicions, then you can't do anything. Specially if you're going to withdraw huge amount of coins.

cellard

legendary

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This proves that exchanges are spending a lot of effort in blockchain analytics and trying to blacklist as many coins as possible, which proves my concern of sending coins in an exchange that were mixed at some point, since you don't know whose coins belong from originally. There is a risk that you have coins that are from criminal origin and you have no idea. Then it will depend on how deep they want to go to consider you part of that criminal activity. How many tx's away from the deposited tx would it be considered safe? all those things are being discussed by lawyers, authorities, and so on.

Most likely what they are going to achieve is that there will be an OTC market were people will pay premiums for freshly mined coins and what have you.

People on twitter started a #DeleteCoinbase hashtag and they pushed them to do this:

https://www.bloomberg.com/news/articles/2019-03-05/coinbase-cuts-ties-with-hacking-team-following-spyware-backlash

However you can't trust these guys. Many questions remain unanswered. They admitted they sold data among other things, no clear answers.

My advice is to stay safe, do not use exchanges unless the coins you deposit are from a clear origin you can prove. Most of us are good people but governments don't care and im sure they will be glad to take away your bitcoins when they can find the legal loopholes to do so.

Topic: Coinbase's recent Hacking Team stuff (Read 283 times)