Topic: The dangers when Bitcoin services use blockchain analytics - page 2. (Read 269 times)

LEGALLY a service that is regulated cannot just confiscate coins without going through a process.. when regulated they have to follow a process
the regulations are clear on this and worth a read to learn the process, to learn how to avoid situations and learn the loopholes and ways to handle situations

what normally happens is that a service has to analyse/investigate its depositors funds and give it a suspicion rating based on red flags and guidelines on certain activities listed by regulators whereby the service(if at threshold) then reports it to regulated authorities in a SAR for further investigation. the authorities then do a more indepth investigation to see if it reaches a higher threshold to get a court order to seek further information beyond the SAR report and if it meets a certain criteria then the courts can issue a warrant to request the service to seize the funds

without a court order a business can freeze an account of its internal services such as exchanging or purchase or delivery of goods, but it has to allow the customer to withdraw funds to then ban/close the account

in short to seize funds and not allow withdrawal the service needs to receive a court order from authorities after an investigation..

regulated businesses without a court order to seize funds, should allow the customer to continue as normal, not informing them they are under investigation. or freeze/postpone access to its internal services and request the customer to withdrawal funds if the business wants to ban the customer.

as for unregulated/ghost(hidden behind tor/proxy/vpn/po boxes) services
many businesses try to put terms and conditions into its users agreements pretending it can seize funds without authorities/court permission, but this is meaningless words as you can sue them.. the only issue here would be is if the service is hiding behind po boxes/proxies to not know where to serve the business a court claim on/to not be able to take them to court. so be careful when using ghost services with bad terms and condition

When accept to use centralized services that are either banks, centralized exchanges, payment processors, e-shops, people have to accept risk that all of their data, IP address, locations, transactions history and personal identity can be sold to government or other companies.

They can believe in trustworthy of companies but it's unrealistic to bet it on a third party entity. Wasabi wallet cooperated with Chainalysis even they claimed that their product is for privacy. The story you shared is another red flag and I think further about decentralized exchanges that have many data of users. They can cooperate with governments and share their user dada base if they feel no other choices to avoid sanctions from governments.

It's almost as if there's money to be made by preemptively confiscating coins without offering any reasonable way of recourse. Given the lack of crime having occured it's not like Volet will forward the confiscated coins to law enforcement, so chances are they end up in their "safekeeping" indefinitely (assuming they don't return his coins after all).



That's how you ensure that you'll have "dirty" coins to confiscate in the future

Giacomo Zucco's Bitcoins were confiscated by Volet - a service that "helps you send, receive, spend, and exchange" your Bitcoins.

Why were his Bitcoins confiscated? Because they are "dirty" and "tainted", but that's merely according to Volet and the blockchain analytics they hired.


BUT what did Volet do to those "dirty" and "tainted" Bitcoins? They mixed them with there own customers Bitcoins. Their customers Bitcoins are currently "dirty" and tainted"?


That's like what was debated in Wasabi's topic. If users can't be given an opportunity to prove that the blockchain analytics' evaluation is false, then those analytics companies' evaluations are not based on logic and science. They merely can say that your UTXOs are tainted because "reasons".