Topic: NYDFS Provides Guidance on the Use of Blockchain Analytics to Maintain Complianc (Read 223 times)

firstly. it is gemini's business to wonder where you got your funds from. literally it is their business.
they can be fined for allowing criminal activity. so its most definitely their business to try to avoid handling stolen funds and criminal activity funding. so yes they will want to know something about you

anyways.
if your arbitraging. you wont want to use onchain transactions anyway. because by the time you see an opportunity of a different spread on another exchange. request a withdrawal, do some mixing and then deposit to another exchange.. atleast 30minutes has passed if you paid premium fee's...
meaning all the other trading bots have taken advantage and shrunk that spread you liked. while you were messing around. meaning you missed your opportunity by messing around

.. but overall it means nothing. no one cares about privacy from going from one exchange to another..
after all coinbase knows your name and how much you withdrew.. gemini knows your name and how much you deposited. they can still connect the dots.. you know. math..

so its a bad example for 2 reasons. .. everyone knows you arbitrages via stable coins and things like sidechains to avoid confirm delay.. no one arbitrages via bitcoin blockchain/bank wire transfer. .. and as just said coinbase and gemini can stil connect the dots by just checking your account name against withdrawals and deposits.

anyway, mixing has always been deemed as laundering. so if you are requesting a withdrawal to a know mixer address.. you might find an exchanges terms and conditions prevent you doing this and will instead request you send funds to another address and never use their exchange again, to avoid them being associated with allowing customers funds to be sent to laundering services.
or receiving funds via a known mixer. again they may prevent you using any of their exchange services and ask you simply to withdraw your funds and never use their service again.

..
you might have been better off using an example of 'data-mining' to sell data to advertising companies. as a privacy concern for innocent people.
EG people that dont want to be spammed with email offers about sofa cushions, rugs and foot rests, because they have been found to have just bought a sofa

Sometimes is not the government, it's other people / businesses.

It's really none of Gemini's business if I bought my coins at Coinbase. But, now I can't take them out of CB mix them and put them into Gemini.
Should it matter? Probably not. Does it matter? Probably not. Can it matter? Hmmmm that's an interesting one. Going from one regulated exchange to another should not matter. But what if I'm a super math wiz investor and I figured out a way to make some money on arbitrage or something. If Gemini sees all my money coming from one source they might dig deeper. There are many other edge cases, but the point it still the same.

Worth discussing, but in the end we all know it's happening anyway.

-Dave

 

the reason criminals think that the 'nothing to hide' argument is baseless is because they want innocent people to fear authorities.. why?
because they want innocent people to launder funds too. so that criminals can get access to clean funds. and give the criminals a exit method to palm their dirty funds to someone else.
after all if only criminals used mixers. all the funds being laundered are all dirty and stay dirty. (mixing dirt with more dirt)
and so none of it gets clean.
in short. they depend on innocent people to palm their dirty funds to. its the only way the criminals will ever get clean funds.
they depend on innocent people getting caught. as it stops investigators looking for the real criminals..

criminals dont care about other peoples safety... they are criminals. they want others to lose funds. so that the criminals can gain.
they want other (innocent)people to be arrested with connections to criminal funds.. so long as the criminal is holding clean funds and detached himself from that connection, his job is done.
the dirty funds have to go somewhere. and criminals dont care where, as long as its far from the criminals.
....

governments do not watch everything. they dont have the time/resources
emphasis THEY DONT HAVE THE TIME/RESOURCES TO WATCH EVERYTHING (so take off tin foil hats advertising anti-gov surveillance)

governments only get interested in watching the juicy stuff of suspicious behaviour. they only receive reports of suspicious behaviours

so yea. if you announce to the world you are laundering your funds because you want privacy. just that announcement alone is enough to trigger authorities to add your name to a watch list.
EG if you use a mixer to then deposit into an exchange. that exchange will flag you just for using the mixer

..
criminals pretend to wear a hat. when they pretend to be good/honourable they call themselves whitehats, doing criminal things for the good..
but when they are trying to be too obvious that they are deceitful idiots (aka blackhats) and announcing and being too obvious in public that they are not good/honourable as they seem,, they are literally becoming a self fulfilling prophecy of being added to a shortlist on a authorities watchlist. just for being so silly about their public announcements

i guarantee that balckhatcoiner is not going to be on a shortlist due to illegal activity itself. but because he has been soo public about his NEED to hide things. .. which will be his downfall whereby they will begin to look into him specifically, out of the thousands of other users on this forum. and then. and only then find what he is trying to hide.

where as others that dont care, wont get on a watch list and thus authorities wont know what the users that dont care are doing.

in short yet again as he does not understand the concept.
governments dont have time/resources to watch everything. your actions of acting suspicious is what will get them to flag you as worthy of their limited resources to look into.

so dont fear that authorities are watching everything (they are not) fear your own actions of how loud you are about acting suspicious to make them want to look at you

Yep, it's the "I don't have anything to hide" argument again. But, now it's worse, because it's franky. Anyway, I'm not going to talk about privacy with franky; please, not even in my worst nightmare.

Congrats, you're welcomed to the wall of shame.

the real nonsense is the tinfoil hat delusions that idiots think that the government has milions of analysts on the pay roll watching everyone..
reality it the government only gets to read 0.001% of user activity. where this small decimal percentage is the really juicy stuff thats 'suspect'

and the kicker of all this. by going to public protests about privacy, by shouting you want to hide your a$$ will get you on a short list where you will get highlighted as someone they should look into.

where as 99.999% of other digital data doesnt even ever get seen by the authorities.. they dont have the time, resources or labour to look at every byte of data
..
so those that want privacy. or operate money laundering services.. yea keep advertising them. get yourself shortlisted and become the fear you fear. become one of the 0.0001% that authorities will look into. (idiots)

---

its not about liking or disliking privacy.. its about i personally dont run illegal services to NEED to hide. so my tolerance and effort in privacy is far lower then yours.
its not about liking or disliking. its about knowing the difference between running an illegal service(like you do) where you NEED to hide to avoid getting jailtime. where as i have the relaxed freedom to decide what i care and dont care about because nothing i do will result in me getting into any legal trouble

so here is the thing
i have not publicly announced in any public forum about me using that address recently..
heck i could have passed that private key onto someone years ago.

for you to have suddenly snooped, and looked in detail and found a connection. shows you are willing to break privacy. oh and funnier thing.. then announce it on a forum, by 'outing' other users.. shows you dont care about privacy

....
what has happened is that i decided just for $hits & giggles to use an old address(which i dont care about)
i dont even care about the re-use address' FUD being spread. thats how little i care about the funds on that address.
(to me that competition reward is like finding a penny on the street and putting it in an old pair of jeans i havnt worn for a decade and probably wont wear them again. it can just sit there for all i care, forgotten about


anyways, i only communicated that address recently, with the competition guys of sports betting and mixers. in regards to the anti-hero of the year rewards
(i just forum searched the last 2920 days for that address (8 years) and only post was YOU 'outting' the address)

.. so the only way you would know about this is by YOU (via your mixer connections) evading privacy to actually look into mixer users destination address requests..
seems they are not as private as advertised. hmm..   (emphasis blackhatcoiner checked into 'bestchance' logs)
 and seems your not afraid of snooping

so thank you for displaying that you dont give a crap about peoples privacy.. by you snooping
emphasis. i did not publicly announce that address. but you did.. hmmmm.. and you know how you did it.

..
by the way. i dont give a crap about that address.. thats just an old $hits and giggle address, but im glad i dont give a crap.

my real hoard is not associated in anyway to that address, the wallets and utxo's never merged or got spent together.
but anyway thanks for showing everyone that your a dirty creep that can/has and does look into mixer datalogs and looks at peoples transactions, and then goes on forums and 'outs' them.

unlike you i dont run illegal businesses and i dont try to scam and con people into using things that can risk peoples funds and their freedoms. i dont try to tell people to use illegal things pretending its freedom. when reality is that your illegal service is the exact thing that will get people having authorities looking into them more, risking their freedoms

---

P.S and mega emphasis.
you have messed up twice now..
once
 you pretended to want to defend peoples freedom of speech, in a 'ban user topic' you created to ban a user for what they say.. even when many posts later you pretend to still honour and not want that user ban, in the topic you created wanting them banned.

secondly
in a topic about privacy. you outed a users transactions. in a topic where you again claim to want to fight for privacy.. but yea you evaded privacy by revealing you snooped into private data/communication to reveal something.

.. you thought you had ammo to fire at me, but ended up shooting yourself in the foot twice.

edit to respond to below
(sarcasm)ouch you quoted me and put it into another topic. ouch, im fatally injured(sarcasm)
oh wait. im fine. ok moving on

Absolutely, but with banks there is usually a clear route a user can take to contest the decision and gain control of their money again, and a clear legal process they can follow should the bank continue to decide against them. With centralized exchanges there is no clear process at all, many exchanges seem to be able to get away with doing whatever they want, and I'm not aware of any individual who has successfully taken a centralized exchange to court for locking them out of their account or confiscating their coins.

I unhid that reply from franky1, just to see what you were replying to. It's just a long winded way of saying the same old tired argument that you only need privacy if you are a criminal, which as most people know is a completely nonsense argument:

Well, the fact that you're reusing your own address for over a decade tells me that you don't like privacy much. And I'm sure you neither like it when another wants it.

Since we're on a forum, and since I've been advertising mixers for a year and a half, I'll tell you what I believe:

• Not all people who use them launder money. And that's not only my opinion, chain analysis companies have said this too.
• I put the right for privacy above the consequences of money laundering.
• Outlawing mixing due to money laundering is like outlawing https due to terrorism.

---

---

PS: Stop being a jerk. I know it's nothing new, that's why I used quotation marks.

oh blackhatcoiner. why dont you ever take just 5 minutes to think before you reply

mixing is literally the friggen definition of laundering
its nothing new.

by using mixers your pretty much going to be flagged for the thing you try avoid being flagged for
AML has been a know flag for years
it stands for anti-money-LAUNDERING

plus these regulations are not about criminalising anything new.
its about recognising already defined SUSPICIOUS activity.
and reporting on suspected behaviour

in most cases of user activity on exchanges.. less than 1% is flagged as suspicious.
of that 1% the exchange does its own small investigations to see if its worthy of reporting as a suspicious activity. meaning even less than that under 1% actually gets reported

then of that decimal percentage that gets reported not all of it leads to criminal investigations and courts/arrests/penalties.

but using a mixer puts you in the very very high probability of being reported to government even if you dont get arrested.
if for instance your just buying a sofa for your tin foil hat to rest on..
you wont get cops at your door for using a mixer. but your sofa purchase will sit on a government database somewhere.


governments do no have the time/money or resources to "watch everyone".
this is why they ask middlemen(money service businesses(exchanges)) to narrow down just the juicy data that might be more worthy of atleast a glance over.
the governments do not want or need to know everyones life story.
but if you make your story juicy enough by acting evasive.. they will think your hiding something juicy

You have that risk now just using banks. People have gotten accounts locked for too much PayPal or Zelle or wire transfers from legit sources that were for some reason flagged.

I think we all agree more money in the ecosystem is better for the fundamentals.



Although I do wear the ChipMiner signature, I have always said that for the amounts that I assume most forum users you can do a better job doing it yourself using an exchange or 2 that does not require KYC and a few privacy based coins.

Mixers are convenient, but far from the only way of hiding where your coins came from.

-Dave

TLDR; privacy is a bad thing.

You can't use L2 if you're prevented from using bitcoin on-chain. And nobody prevents you, so I see no problem. This is nothing new, anyways; as long as you don't use centralized exchanges to store, move or invest into cryptocurrencies, there's nothing concerning you.

Pretty disappointing that mixing coins is "officially" an illicit activity now. Doesn't it sound oxymoron, though, to exchange centrally and use a mixer? Pick a side; you can't protect your privacy if you don't have any.

in short

in more detail. if you are a person that commits no crimes, but wear a tin foil hat about "gov surveillance", where you are paranoid that you think the government will know about innocent purchases of, for instance a sofa..
and whereby you (wrongly) think that you can avoid governments getting reports about your innocent sofa purchase by using a mixer to hide where you bought your new sofa..
using a mixer(2) will be the exact reason an exchange will have to report details to governments.. your sofa purchase will end up on a government report, purely because you use a mixer.
and your exchange account will get flagged and you can lose access to exchange services. not due to government wanting to know about a sofa.. not about your sofa. but because you think having a sofa is something you want to keep secret.. but ends up that keeping the secret becomes the thing that makes your private life known more so

where as just buying a sofa from a vendor accepting bitcoin without using a mixer wont cause a flag. the exchange wont report it to the government. and it just becomes a unwatched note on an exchange database that no one looks twice at. meaning not using a mixer keeps your sofa purchase away from government eyes

in very short.
using mixers to hide is exactly how you will be spotted

Don't hate but just yesterday was filling in a questionnaire about how likely I'd be to use Lightning for the majority of transactions, or even move all my use off-chain and I chose an answer of "only if I were prevented from using on-chain".

I know that's a bit of a misnomer since if I couldn't use Bitcoin network I don't see how I'd be allowed to go on Lightning BUT I've never fully understood the mechanics of it.

Now I see this thread I wonder if it's another reason that'd push me to L2.

Is this better, though? Putting aside my well known feelings regarding centralized exchanges and KYC for a minute...

At the moment, as you say, KYC/AML and centralized exchanges is all over the place. Some do it one way, some do it another way. Some are very strict, some are not so strict. What one exchange accepts, another might refuse, and vice versa, not just in terms of KYC and personal information but also in terms of so called "tainted" coins. Does putting in place some sort of framework to make every exchange work to the same level actually benefit the average user? You already have absolutely no privacy and no security if you are using a centralized exchange, so that can't exactly get any worse. But at least you might end up with fewer cases of accounts being arbitrarily locked because one exchange's requirements were different to another, or one exchange was utilizing some blacklist that another one wasn't?

I don't know. I agree that this makes things easier for institutions. I'm not going to lie and say that I don't care if some massive asset management firms come in and drop a few hundred billion dollars in to the market - obviously I'd like the price to go up and the increased legitimacy and adoption that such a move would bring. But at the same time, I'm not going to let this kind of regulation touch me. As much as I like higher prices, I like the fundamentals of bitcoin more.

If there are people who are willing to invest in a business because a famous person is tweeting about it, it is better for them to have regulatory compliance or else their money will go to scammers very easily.

You can't reach high adoption trying to hide yourself from the government, you can still maximize your privacy but at one point or another you may be exposed.

You need to search for decentralization, no authority can prevent you or restrict you from accessing your money.
for the average user, he is not afraid of centralization

Yes, with a but.
It is moving from 'you should do this' to 'this is how you should do this'

Putting aside the entire lack of privacy and intrusion part, that as you said has always been there for fiat institutions. It allows for businesses dealing with BTC / crypto to have a better set of rules to point to. If you are a lawyer working for a big financial institution and your boss comes to you and says how do we do "X" in the world of banking you pull out a book that you can barely lift and say "here is how it's done". Crypto has been a bunch of 'well, we should do it this way OR that way there are some rules over here and..." At which point the boss walks away and says "nevermind let someone else deal with it"
Now, if they come and ask about crypto, the big book of rules comes out, and they put more effort into doing it because they have something to fall back on if it all goes wrong.

Which goes to what @mk4 and I started with. It allows, hopefully, for bringing many more larger institutional investors with a lot of money into the ecosystem.

-Dave

It's nothing new, really. The document essentially boils down to: "Collect KYC data, use blockchain analysis to monitor all deposits and withdrawals, figure out where all coins are coming from and going to, and cross check all that against blacklists and other databases". This is what pretty much every centralized exchange already does. I think the only thing that's new is the explicit recommendation that exchanges should directly partner with blockchain analysis companies.

As much as I hate such incredibly intrusive privacy invasion, as long as it is isolated to centralized third parties then it doesn't affect me. Whenever you use a financial third party - in fiat or in bitcoin - then you are subjected to their rules and regulations, and by extension the rules and regulations of your government. This has always and will always be the case, and bitcoin won't change this. Conversely, it is trivial for me to avoid all this nonsense by continuing to refuse to use such centralized third parties and instead use bitcoin as it was intended. Institutions can buy their carefully selected coins from their carefully selected platforms, with no privacy, no security, no ownership, complete centralization, while fully trusting a variety of third parties, if that's what they want. I'll continue to use bitcoin as it was designed instead - trustless, self-ownership, censorship resistant.

It's was pretty much inevitable though, unfortunately. But yea, I think it's a sacrifice to take for institutional adoption. The best (realistic) timeline imo would be:

1. Chainalysis traces the crap out of our funds
2. Institutions adopt bitcoin
3. Some genius developers develop and create very easy to use (and affordable) privacy tools for retail
4. Governments would want a pushback due to the increased privacy but fails to do so because of bitcoin being well-adopted already

Was going to put this in the press section but figured it would get more eyeballs on it here

https://www.natlawreview.com/article/nydfs-provides-guidance-use-blockchain-analytics-to-maintain-compliance
And
https://www.dfs.ny.gov/industry_guidance/industry_letters/il20220428_guidance_use_blockchain_analytics

I hate the fact that things like this are happening. It really is taking away from the reason BTC and cryptos exist.
BUT, and I cringe to have to say it. Things like this DO help institutional adoption. There are a lot of things that scare off investors and users and adopters of things.
Lack of rules and regulations is one. Having stuff codified like this really infringes on the way BTC was supposed to exist. Having stuff codified like this means that grandpa can now feel safer having some in his retirement portfolio....

-Dave