Tainted coins | Bitcointalksearch.org

Bialke

jr. member

Activity: 98

Merit: 5

Quote

"Taint" doesn't exist in the blockchain, (...)

But in the laws (of various countrys).

If a 8 year old is producing a block in the BTC network, it is illegal in Germany. If a drug dealer is selling drugs for BTC, it is illegal in the USA. And the authorities of these countrys are tagging the coins and adresses. This is the fact. Basically if one country is defining BTC as a good, the good can be stolen. And the receiving and/or buying of this stolen good is/can be illegal.

The BTC network cared for these illegal activities. But most of the answers were: It is a small problem in relation to the benefits. But the answer is not solving the problem. The same problem is existing with FIAT. But partly solutions are restrictions of the trading amounts, KYC and tax investigations/trackings. And of course physical markings with special colours or tracked bill numbers.

Basically every Satoshi could pegged (by the BTC network) to a NFT. And if one country is blacklisting it - because of the law - it would not be tradeable in this country. So in the end the price of this one Satoshi would become less value as another Satoshi.

Hamza2424

legendary

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#SWGT CERTIK Audited

Quote from: Bialke on February 17, 2023, 06:14:56 AM

I think Bitcoin has a big problem with tainted coins and the demand to be a store of value.
My example:
X gets 1 BTC through a criminal act. X is trading something for 1 BTC with Y. The Police is blacklisting the 1 BTC and confiscated the 1 BTC from Y.
This is a 100 percent loss of value for Y.
Then the FBI is selling the 1 BTC, often under value. This is an overall decreasing of value for Bitcoin.

Haha, What is this ?? Bro... Are you serious?
I am a bit confused now after the chip mixer incident and SEC's strong policies against the crypto market, especially around the miners and Bitcoin accumulators. A maximum of the newbie and other members' topics in the Bitcoin discussion from the last few weeks are around Bitcoin and criminal acts and everyone is trying to prove something trying to defend BTC with stupid facts or vice versa. I would like to say there is no need for this.

You know what BTC is I know so what. Let others think whatever they want to why waste valuable energy explaining to those who don't want to understand and want to be deaf & blind so let them bee. What value are these topics are adding in the Bitcoin Disucssionshould be on a good topic and now these days topics be like just for merit fishing and bla bla bla.

Wind_FURY

legendary

Activity: 2898

Merit: 1823

Quote from: Mttewndew on April 04, 2023, 12:41:39 AM

It's a tough situation, but perhaps Bitcoin could implement some kind of tracking system to prevent tainted coins from being used in transactions. This could help protect both buyers and sellers

"Taint" doesn't exist in the blockchain, it's better to leave your UTXOs alone. But if you truly want to make sure that you don't have "tainted" outputs, then try letting them pass through Wasabi Wallet's centralized coordinator. nopara73, Wasabi's developer, works with Chainalysis to "track" tainted outputs.

Despairo

hero member

Activity: 1064

Merit: 843

Quote from: Mttewndew on April 04, 2023, 12:41:39 AM

It's a tough situation, but perhaps Bitcoin could implement some kind of tracking system to prevent tainted coins from being used in transactions. This could help protect both buyers and sellers

Bitcoin is decentralized, if you suggest to implement such kind system it means Bitcoin no longer decentralized. You don't need to create a tracking system because Bitcoin is using public blockchain and anyone can see any transactions, address and the balance.

Quote from: dr.hopkins on April 04, 2023, 01:02:33 AM

I guess the lesson here is to always do your due diligence before accepting Bitcoin as payment. You wouldn't want to unknowingly get mixed up with any dirty coins.

Let's say you're asking everyone about the original coins they got, do you think a criminal will answer if the coins got from hacking a centralized exchange?

siniminomorocomunisakito

member

Activity: 420

Merit: 34

Quote from: Bialke on April 01, 2023, 11:01:31 AM

Quote from: hd49728 on March 09, 2023, 08:29:41 PM

Please where are sources of those tainted transactions that are big with 50.000 and 100.000 BTC.

One source for one part: https://thedefiant.io/us-gov-moves-1b-seized-btc

Another source for the other part (german): https://www.btc-echo.de/schlagzeilen/mt-gox-insolvente-bitcoin-boerse-verschiebt-rueckzahlung-160739/

The timestamp was early March 2023.

The first source is about 40.000 BTC (seized through the US governement) transfered for selling to Coinbase.

The second source is about the payback of the frozen/seized Mt.Gox Bitcoins.

My opinion Contaminated coins, which refer to Bitcoins associated with illegal activity or criminal transactions, can pose a significant risk to both users and exchanges.

From both incidents I think As the industry continues to grow and mature, it is important for regulators to work closely with stakeholders to ensure that laws and regulations are effectively enforced, and wrongdoers are held to account. This will help promote trust and confidence in cryptocurrencies, making them more accessible to mainstream users and investors.

borovichok

hero member

Activity: 1148

Merit: 518

Quote from: kryptqnick on April 03, 2023, 07:45:08 AM

I've never encountered an issue of tainted coins personally, and I don't know if there really is a problem of such coins being confiscated or frozen when people are merely recipients of such coins and have no involvement in the criminal acts. I've heard stories of the FBI seizing accounts and then selling bitcoins, but in those cases the money was clearly taken from criminals. Also, I believe it's sold in a form of an auction, so it's not necessarily undervalued. Moreover, once sold by the FBI, I'm sure these coins are cleared of any suspicion and are successfully back in business as clean coins. So maybe there isn't much of an issue here.

Scammers exist in the market, people who only exist to accuse others while complicating and jeopardizing the entire trade system. I've seen a lot of examples when traders' accounts get frozen because they've left a trail of fraudulent activity, and this primarily happens in P2P trading. For instance, purchasing large quantities of bitcoin from a pathological liar and getting adequate account punishment. Being involved with tainted coins is equivalent to engaging in illegal activity on the market, putting your personal accounts and cash at stake, and triggering a seizure order should things go completely wrong.

Jason Brendon

member

Activity: 162

Merit: 65

Quote from: dr.hopkins on April 04, 2023, 01:02:33 AM

I guess the lesson here is to always do your due diligence before accepting Bitcoin as payment. You wouldn't want to unknowingly get mixed up with any dirty coins.

No, if btc wants to be day-to-day money, this has to be obvious and easy to solve. It's not some investment where you do research. Do you do your due diligence before taking your salary?

dr.hopkins

newbie

Activity: 54

Merit: 0

I guess the lesson here is to always do your due diligence before accepting Bitcoin as payment. You wouldn't want to unknowingly get mixed up with any dirty coins.

Mttewndew

jr. member

Activity: 433

Merit: 5

It's a tough situation, but perhaps Bitcoin could implement some kind of tracking system to prevent tainted coins from being used in transactions. This could help protect both buyers and sellers

bittraffic

hero member

Activity: 3038

Merit: 617

It's just them trying to make BTC tainted. Whether 1BTC is tainted or not, it's still 1BTC.
So yes it's a big loss for Y that got it legally and then just taken away from him. X didn't know. But if he just knew that the coins are tainted he could have used a mixer to fix them.

Once the FBI sold the coins, will they still be considered tainted? Because it seems to be like they are also violating that rule.

witcher_sense

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Quote from: Jason Brendon on April 03, 2023, 04:30:13 AM

I wish it was true. But I don't agree with it. I think once tainted, always tainted.. Otherwise, thing would have been much easier. People could then just self-send all the time and laundering until it's no more tainted.

Actually, Bitcoin is designed in such a way that the mere sending of transactions makes it a little bit "cleaner" (use quotation marks to emphasize that the "taint" thing doesn't really exist: it is just a made-up term used to control people's minds and actions), which you can verify just by learning how the mining process works under the hood. When you are sending a transaction (even to yourself), you implicitly specify the amount of money you want to pay to see your transaction confirmed. This implicit amount equals the total of outputs substructed from the total of inputs. Yes, it is called a transaction fee. Fees have no inputs, and no outputs, the are completely anonymous and, therefore, clean by definition. By actively making transactions in the bitcoin network, people constantly "launder" part of the total supply and eventually will make the taint coins narrative obsolete.

Despairo

hero member

Activity: 1064

Merit: 843

Quote from: Jason Brendon on April 03, 2023, 04:30:13 AM

Quote from: MusaMohamed on April 02, 2023, 02:20:52 AM

Despite of very biggest cases, tainted coins will no longer be tainted after they have many layers of transactions from initial tainted addresses and wallets to other wallets.

I wish it was true. But I don't agree with it. I think once tainted, always tainted.. Otherwise, thing would have been much easier. People could then just self-send all the time and laundering until it's no more tainted.

Sending a coin from mixer to wallet and other wallet is called as conceal, this still tagged as high illicit money because you're trying to hide something.

Sending your coin from one wallet to another wallet for many times doesn't solve anything because it's really easy to track it, they will know the original source of your coin.

If you have trade P2P with someone and you're suspected using money laundering, you can explain to the banks about it, your case will be solved.

But if you're the one who's using mixer, it's better if you never link your coin with banks in order to cashout your money.

MusaMohamed

sr. member

Activity: 966

Merit: 306

Quote from: kryptqnick on April 03, 2023, 07:45:08 AM

I've never encountered an issue of tainted coins personally, and I don't know if there really is a problem of such coins being confiscated or frozen when people are merely recipients of such coins and have no involvement in the criminal acts.

If you use mixers and have mixed coins from outputs, you should use those coins with a separating account for those coins. If you get troubles with exchange, it won't be mixed with your clean coins. You will reduce risk of losing all coins just because of Mixing or Coinjoin transactions.

Quote

I've heard stories of the FBI seizing accounts and then selling bitcoins, but in those cases the money was clearly taken from criminals. Also, I believe it's sold in a form of an auction, so it's not necessarily undervalued. Moreover, once sold by the FBI, I'm sure these coins are cleared of any suspicion and are successfully back in business as clean coins. So maybe there isn't much of an issue here.

Did you imply about the coins from SilkRoad seize years ago which were auctioned long time ago too?

U.S. seizes over $1 billion in bitcoin tied to 'Silk Road'
US government prepares to auction $17m of seized Silk Road bitcoins
The Final Silk Road Bitcoin Auction Has Occurred

After auctions, seized coins (that were tainted too) will be circulated on the market again. They would no longer be tainted after getting covered more deeply on the blockchain.

kryptqnick

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I've never encountered an issue of tainted coins personally, and I don't know if there really is a problem of such coins being confiscated or frozen when people are merely recipients of such coins and have no involvement in the criminal acts. I've heard stories of the FBI seizing accounts and then selling bitcoins, but in those cases the money was clearly taken from criminals. Also, I believe it's sold in a form of an auction, so it's not necessarily undervalued. Moreover, once sold by the FBI, I'm sure these coins are cleared of any suspicion and are successfully back in business as clean coins. So maybe there isn't much of an issue here.

Jason Brendon

member

Activity: 162

Merit: 65

Quote from: MusaMohamed on April 02, 2023, 02:20:52 AM

Despite of very biggest cases, tainted coins will no longer be tainted after they have many layers of transactions from initial tainted addresses and wallets to other wallets.

I wish it was true. But I don't agree with it. I think once tainted, always tainted.. Otherwise, thing would have been much easier. People could then just self-send all the time and laundering until it's no more tainted.

FahriZah

member

Activity: 485

Merit: 10

Bitcoin Never Tainted coin Because All Of The Coins Of Mothers Coin Is Bitcoin.But So Many Tainted Alts Coin Are Available In Crypto Currency Market Still Now So Many Scam Coin Available So Be-Careful And Always Beware Scam/Tainted Coins And Always Try To Find Out Very STRONG Project With Best Coins.

Darker45

legendary

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Merit: 1860

This is all founded upon a subjective presupposition. This is based on mere opinion. In the first place, why is this standard applied to Bitcoin when it is not even applied to fiat? Is a soiled 1 dollar bill lower in value than a newly printed 1 dollar bill? Does a crumpled or creased 10 dollar bill have lower value than a smooth one? The answer is no.

Scientists and chemical analysts actually found out in a number of studies and surveys that more than 90% of US bills are contaminated with cocaine.^[1][2][3] Do these 90% contaminated bills have lower value than those cleaner ones? Of course, not! So why should Bitcoin be treated any differently?

In terms of Bitcoin used in criminal activities and transactions, they should be confiscated the way US dollars used in illegal transactions are confiscated. And then they will go back into circulation carrying the same purchasing power.

[1] https://en.wikipedia.org/wiki/Contaminated_currency#:~:text=%22It's%20virtually%20impossible%20for%20cocaine,was%20confirmed%20by%20Ronald%20K.
[2] https://www.nationalgeographic.com/science/article/cocaine-on-money-drug-found-on-90-of-us-bills
[3] https://www.acs.org/pressroom/newsreleases/2009/august/new-study-up-to-90-percent-of-us-paper-money-contains-traces-of-cocaine.html

Z-tight

legendary

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Quote from: pgbit on April 02, 2023, 08:09:02 AM

One possible solution to this problem is to use a third-party service that can verify the origin of a Bitcoin transaction. These services will flag any transaction that has been involved in illegal activities so that users can avoid it.

Do you mean using third party services like Binance to hold your BTC because you are worried about 'tainted coins', sorry, but i will pass that one, the risk that comes with using third party services to hold your BTC is far greater than the worry about 'tainted coins'. How many times have we read charges against third party services for knowingly helping money launderers and fraudsters to hide the source of their money, they only declare the ones they want to and act legitimate when the radar of the authorities is on them, so do not believe that these services are saints in the network that help keep the network safe, it may even be the opposite.

If you use BTC and you are not a criminal, neither are you a money launderer, you don't have to worry about tainted coins, the correct thing for the authorities to do is to flag the initial address than first received the stolen money, and from there begin their investigation. If they don't and the funds keep changing hands and gets to you, i don't think you can be prosecuted for that.

BenCodie

legendary

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Tainted coins are an agenda pushed by companies like chainanalysis to make some coins to be perceived as more valuable than others. A great contradiction of the theory was recently told when the German police sold seized "criminal"/"tainted" coins and now claim that they are completely clean because it came from them.

The people can stand up to this agenda and make all coins equal again by using non-custodial services, decentralized/p2p exchanges and avoiding any service that uses these companies and their services.

There is no such thing as tainted coins. This isn't endorsement to accept coins from shady places, but if you aren't a criminal then you shouldn't be treated like one if your coins came from somewhere shady a long way down the chain.

pgbit

sr. member

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Trident Protocol | Simple «buy-hold-earn» system!

One possible solution to this problem is to use a third-party service that can verify the origin of a Bitcoin transaction. These services will flag any transaction that has been involved in illegal activities so that users can avoid it.

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