If you or your company (I'm talking to YOU, Bitstamp!) has been robbed of bitcoins, please consider proving it by offering a reward for making any effort to add to the thief's concerns.

If you review the history of my posts, you will see that:

• I very much like the idea of taint.
• I very much dislike coercive authority.
• I recommend that people use their consciences and pay attention.

In another post, I recommended this public announcement:

When I suggested the idea of taint in the past, blockchain.info added the "taint" feature.  Thanks Blockchain!  Many in this community balked at the idea of making it difficult to spend coins from any particular address.  Their reasons generally fell into three groups:

• The fungibility of Bitcoin would be threatened by such practices.
• Blocking transactions is tyrannical.
• Innocent individuals could be negatively affected by attempts to block transactions.

The first objection, based on fungibility, implicitly introduces the idea that miners should be required to include all transactions that fit the protocol.  I don't see how this is feasible, technologically.  I suppose the proponents of this ideal of fungibility did not realize that miners already have the choice to exclude whatever transactions they want.  That fact seems a much better target for this objection.  If you're going to try to convince miners to include transactions they know are related to thefts in order to preserve fungibility, engineer a way for the protocol to prevent them from excluding transactions.  One of the beautiful things about Bitcoin, for me, is that the protocol itself encourages freedom and responsibility, so let's keep that going and abandon the idealistic attempt to have miners be willfully blind to property rights violations.

The second objection is much more effectively handled not by blindly including all transactions, but by challenging and ceasing support for tyranny.  If you feel a transaction should have been included and was not, then you go do what you need to convince the miner who could have included it to change his mind next time.  Just please don't discourage others from using their consciences.  As long as individuals are free to mine blocks containing transactions with stolen coins in them, I'm happy.  I wouldn't do it, but the last thing I would want is to forcibly prevent others from doing so.  My appeal is to the conscience.  Reasoned persuasion is the key to human advancement, and coercion is the shit holding it back.

The third objection is a very good one, but everything we do has the potential to hurt innocent people.  Due diligence is called "due" for a reason. 

So by all means, follow your conscience.  If you care enough to do the work required to determine whether or not 1L2JsXHPMYuAa9ugvHGLwkdstCPUDemNCf actually does contain stolen coins, and you have the opportunity to include or exclude a transaction from that address (or one of the addresses to which its coins have been distributed) in a block you're solving, think about how the respect for property rights has helped humanity in the past and consider keeping that tradition alive.

On the possibility that Bitstamp secretly cooperated with the thief in order to embezzle $5M, consider waiting for them to publish something like what I suggested above.

That will never be acceptable because that is messing with a key point of bitcoin, fungibility. NOPE

Perhaps you should go argue with Gavin Andresen, whose proposal from 2012 disagrees with what I think as an even more fundamental aspect of Bitcoin:
 

Therein lies the problem. Bitcoin was never fungible.

Here you go Bit: https://bitcointalk.org/index.php?topic=929852

So it seems that it's already in the protocol, whether or not Gavin agrees.  But I think I must have misunderstood you.  Would you mind clarifying what you meant?

Really, really bad!  It would be wonderful poetic justice though, wouldn't it?  Either I'd have to give all the help I could to (re-)find the seller in order to vindicate myself, or I'd have to just lose all that money.

How would you feel if you convinced a buddy to allow his daughter to go out with some college kid that your buddy's KKK background made him dislike, and then, while they were out on that date, a cop shows up with an arrest warrant on a hunt for the kid because he's wanted for a rape-murder?  What difference does it make how we feel about these things?  Does the prospect of how you'd feel motivate more diligence in making high-dollar deals?  I think that would be great!

Watch out for logical fallacies.  They don't indicate falsehoods, just the kind of sloppy thinking we're all taught in government schools.

In any case, Bitstamp has not offered any reward yet, so I'm not sure there's anything to worry about.

im not victom of bistamp hack .but i think bitstamp should cover money as they say they are biggest exchange and have a pro security bla bla bla

(Red colorization mine.)

Possession is to the hyperreal what control is to the real.

In a scam called "Man In The Middle" (MITM), the victim believes he's buying something from the scammer.  The scammer is actually buying something from an honest seller.  The victim eventually comes after the honest seller because that's who got his payment.  The only protection from this scam that I have found, regardless of what medium of exchange is used, is to be able to hunt down your trading partner.

This is also the easiest way to protect yourself from buying "crime coins" - just as the difference between a thief selling stolen goods (or currency) and the scammer in MITM is that the thief got the coins through outright theft instead of pretending to have something to sell.  That is an unimportant difference.  Another unimportant difference is between buying and selling.  Just call it trading.

Once you grok that buying and selling are the same thing, you'll see that bitcoin itself and the blockchain we can use to track the flow of it isn't all that important in regards to the legitimacy you seek.  Transparency is the best solution.  This is the foundation of KYC and AML laws, but, as usual, since the government made them, it's a very crappy implementation, relying as it does on enforcement and intimidation of honest people instead of personal responsibility and integrity.

If you don't want to secure the ability to hunt down your trading partner in case you turn out to have received stolen bitcoin, you can check the "taint" feature on blockchain.info to see whether or not the addresses you believe were used to hold stolen bitcoins have ever held any of the bitcoin you got.  I've been scammed enough times to choose the ability to hunt down as the easier protection.

It's also interesting that most justice systems do not recognize the possession of stolen currency as criminal (unless you committed the theft).  So, at least from the perspective of those justice systems, you aren't culpable.  Of course, anyone from whom you want to buy something has every right to refuse to trade with you for any reason, including their own belief about what Bitcoin addresses have held stolen coins.

That's a good question!  Does the current justice system make everyone down the line of buyers of that stolen car into a victim of the theft?  Each of those buyers paid some money - does the justice system confiscate it all?  It seems likely, given its parasitic nature, but it also seems like it would be pretty hard to justify.  On the side of evil, unfortunately, is the fact that they justify taxing people in order to provide food, shelter, and healthcare to the criminals while preventing those same criminals from getting any opportunity to make restitution directly to their victims.  So maybe they do just confiscate it all, relying on the same stupidity of the masses that protects them in the prison racket.

For a time, I suppose it will depend on that, but I think it's important to remember that whatever coercive authority comes up with is just a system of coercive threats.  As a long term strategy, that creates war, gangs, and violence.  If we want to get rid of those things, we need to come up with better solutions than they do.  They won't come up with them because they thrive on the chaos they create with all their coercion.  They use it to justify raising taxes.  Government is the largest organized crime ring.