Topic: Concerned about Tainted/STOLEN coins (Read 2522 times)

No its not a problem, cash is dirty but we all use it daily.

Are tainted coins really an issue?
Use a good mixer, to obfuscate linkages. That would solve all your problems (for a small fee, of course).

Unocoin uses chainalysis api and it does a decent job. For a trading platform that have more than a few hundreds of transactions and about a hundred trades per day, it is practically impossible to do taint analysis manually on individual incoming bitcoin transactions.

You should be doing whatever you'd do in case of cash.
If someone gives you 100Rs note which he obtained by selling drugs, do you care? But we do care if the sum is 2 lakhs. Why the inconsistency?
This proves that we are not concerned about ethics but about the authority.

So, my advice would be, trade with an identifiable party, like an exchange, whom you can later trace.

Let us consider the scenario where the coins you got are actually dirty and being traced by police. You simply tell them you got it from ABC and you are safe.

With Indians there is a mentality factor too. The bigger party is always blamed. So when police investigates, if you are pointing at a petty thief, they will assume he works for you. If you point at an exchange they'll go after the exchange.




Having said it all, undocumented barter is legal in India. If you give me dirty bitcoins and I pay you in wheat, the deal is legal and untraceable.

waiting for Mahin's input on blockchain.info/taint..............

the entire objective of this discussion is, identifying tools for f2f buyers, so that they can at least take some precautionary measures, against the risks of buying STOLEN or TAINTED coins.
skang, suppose i am doing a f2f deal, buying bitcoins worth 2 lakhs INR, and i want to take some precautionary steps, what should I be doing to safeguard myself??

I am making the below list, which I think will be definitely helpful for the Indian BTC community in the long run............. (please keep on expanding the list)




Precautionary steps against risk of buying Tainted/STOLEN coins:

1. Ask the seller of coins to provide his BTC address beforehand, so that you (the buyer) can do a taint analysis via blockchain.info/taint, before proceeding for the transaction.
Relevant notes on the above point:


2. Do a google search for that address and see if anything suspicious comes up
Relevant notes on the above point:


3.

  Mixers can completely anonymize your bitcoins if the coins they are mixed with also remain anonymous.
If you have 10 telephone numbers and ten people you can tell which is whom, but if you can solve 9 of them, 10th is automatically revealed. Even if that person used a new telephone number for each of his call.

Maybe you should stop using cash because most of that money was exchanged for drugs im sure at some point.

understood  

let's try english 

Not just mixing, but anonymous mixing. If in a mix, other parties' information is revealed, then yours is revealed too. Everybody needs to hold up their part.
But, the weakest link doesn't fail everybody. If majority fails, the strongest link fails too.

thanks for sharing this info skang.......truly worth appreciation....

"If someone uses an anonymous coinjoin, there is no taint analysis service that can track the coins."

are u absolutely sure about this? does mixers & tumblers, make bitcoin from pseudo-anoynous to COMPLETELY ANONYMOUS?

• Are dirty coins an issue?
• How to do taint analysis?

I have done taint analysis for few cases (some even on the Indian sub-forum).

Here is my technique: a combination of clustering and taint analysis.
If two addresses appear as inputs to the same transaction, assume that they belong to the same wallet. That is because normally one needs to have both private keys to sign the transaction.
Wallets are group of clusters connected through reflexive, transitive and symmetric closure of the 'sameness' graph described. One of the addresses then needs to be identified by dealing with the concerned wallet and others get revealed.
Further, We can also find the ip addresses that relayed a particular transaction if we run a node with high conectivity. I run many nodes but am not interested in doing this analysis.

My price is much much less than chainalysis & is per case rather than per address per unit of time as in case of chainalysis & almost everyone told me my data was more detailed than their report, though chainalysis will give you a good looking graphical report & I will give you text.

If someone uses an anonymous coinjoin, there is no taint analysis service that can track the coins.

Are dirty coins an issue though?
I don't think so. In real life, if a vegetable hawker accepts your note, he is not concerned about the origin of it. That is how black-money is possibly cycled - in cash. Irrespective of the amount this method works and other countries deal with it by balancing the tax return over increasing geographies, as discussed elsewhere on this forum.

found this one - https://bitcointalksearch.org/topic/what-does-taint-analyis-on-blockchaininfo-really-mean-1088997
I do believe blockchain.info's taint analysis tool is to test the integrity of a mixing service.

The first answer points to the mild pointlessness of tainting coins.
http://bitcoin.stackexchange.com/questions/8232/how-does-blockchain-infos-mixing-service-work

if i would have known, i wud have NEVER BOUGHT the T1 tainted coins, in the first place!

The POLICE wud know in there investigation and will come knocking on my door because, i being the good guy, went to unocoin to sell my T1 Tainted coins- they have my ip, they have my id proof and they have ME!!  

will be waiting for your tutorial on blockchain.info/taint...............thanks..............i am sure many others indian bitcoin buyers/sellers wud find your guide useful....... 

https://chainalysis.com/

But how would you know that guy is hitman and has killed someone and has received coins on that address. The crime and bitcoin address should be connected and should have been in public knowledge or atleast in the knowledge of tool you are using.

Taint analysis can help you only with bad addresses which are already identified as connected to some so called crime.

Will surely try to put some points later today as I will have to use blockchain.info taint analysis tool ( Never used it before )

Regards

if i bought the T1 tainted coins from the Hit man, i know his bitcoin address, right?.....(i can alwayz look up the blockchain and see the address from where i recieve the payment)

i knew about this tool https://blockchain.info/taint,    but don't really understand what those bands multi-coloured bands suggest and how does the entire thing work. nor is there any youtube video regarding this (if there, please send the link)

Mahin, if u could throw in some quick pointers explaining usage of blockchain.info/taint/, it would be great. Other awesome guys please pitch in with your thoughts/ideas/suggestions/tools as well.

Chianlysis.com....this link ain't working...

For your wild example it is impossible to do taint analysis. Taint analysis can work only if you know bitcoin address involved in transaction ( or previous few immediate transactions ) is considered bad like say some exchange got hacked and coin moved to one particular address ( address x ). Now if your bought coins has origin from that coins, you may consider it tainted. But you must know the address x is tainted.

Some tools you want to know :

https://blockchain.info/taint/1dice6GV5Rz2iaifPvX7RMjfhaNPC8SXH

Chianlysis.com is one company working on it. There are few more startups working in this direction.

But again, even if you know coins are clean you should not accept it from anonymous identity. If you really want to make sure you are not involved in such transactions, prefer reputed exchanges and companies.

On a side note, if your bank account gets transfer from some shady account you should worry exactly same way. Do you expect transfer in your bank account from anonymous person without identifying him ? Bitcoin is same. You have to use same precautions with bitcoin too. I do understand your question is more about tools and technical information, but trust me there is no way one can make sure bitcoins he has received are not so called tainted ( except you mine and get fresh block, which also may be in some countries/jurisdiction illegal if thet think mining or bitcoin is illegal ) I have always insisted people to understand that bitcoin is not only example of cutting edge technology, its cutting edge example for law and its interpretation too.

Regards

my concern is coins bought f2f in cash.

let's consider a wild example. let's say, some Bitcoins were paid to hit man, to kill a person. let's say those are T1 coins. Now u saw an ad on bitcointalk forum, for coins being sold.  you approach the person, you pay cash, you get your T1 tainted coins. you go your way.

Now, suppose the price went up, you needed some cash and you sold those coins on say Unocoin, and there is investigation going on.   The agencies now, has your IP address, your details and you are basically screwed for NO FAULT OF YOURS!!! 

At the very least, you will be DEFINITELY involved in POLICE INTERROGATION & COURT PROCEEDINGS, which cud easily have been avoided 

It would be helpful, if you advanced users cud provide some info, if there any online/offline technical tools available to safeguard ourseleves from buying STOLEN or TAINTED coins.....  this would help the INDIAN bitcoin community in the long run.......

Hi there

You will have to understand how a coin is marked as tainted. Its pure speculation and subjective. Lets try to understand. Someone has sold weed to x person in California ( legal there ), paid tax on this transaction etc. Now that coins somehow came to you. Is it tainted ? To me No. To someone else, may be. Its pure subjective.

That was theory, a practical advise would be. You should have sufficient knowledge about the transaction and from whom you are buying. If you can prove that your usage of bitcoin is not illegal, its all accounted for and you can show enough knowledge about transaction and next immediate source, you are fine.

Bitcoins are not tainted or illegal, its how you use them. I can understand your concerns for sure and appreciate your awareness on issue.

Regards
 

Surprised, you missed the point by such a wide margin!!

When a govt. sells something, it in fact further validates the coins. Those coins, thus are THE CLEANEST COINS possible.

i agree with benson - fungability is an important characteristic of bitcoin

if it was a real issue, then barry and tim would not have bought the tainted coins from US action of bitcoin. well US would not even have put up an auction in first place.

when regulations come up - this may be a bit different though.