Bitcoin Forum

I have heard of several people having their Coinbase accounts closed for sending btc to darknet markets, and I recall that guy who sent coins he won fraudulently from a casino directly to a exchange (I think it was bitstamp, maybe bter?) and having them frozen.

Are there any other examples you folks can think of where people have been tracked over the blockchain? Has law enforcement ever caught anyone this way?

If there is a list or another post/thread on this subject I would appreciate being pointed to it.

Thanks

I can only think of one person that got tracked over the blockchain. the sheep marketplace owner (forgot his name)


oh, and try searching for "Moolah bitcoins"

I heard about maybe 2 weeks ago(?) that coinbase closed a guys account from buying from a known online knife dealer.
Never followed up to see if this was true or they closed the account because he was doing "other things" as well.

Edit: Nevermind. Here is what I was referring to.
http://www.reddit.com/r/Bitcoin/comments/38qzgt/circle_will_close_your_account_if_you_use_it_to/ (http://www.reddit.com/r/Bitcoin/comments/38qzgt/circle_will_close_your_account_if_you_use_it_to/)

I think it was a casino to btc-e and they recover the bitcoins, but I can't remember the name of the casino

Criminals/thieves/hackers tracked - all of them.
Caught - maybe less than 1%.

How do you figure that? There are many criminals who LE would love to catch, but are getting away because they mixed their coins properly.

Coinbase is claimed to even close down accounts for wide range of reasons, from dice site deposits, to casino and even resellng bitcoins on localbitcoins.
If they monitor these cases, i can only imagine what agencies are doing in their survailance, and blockchain analysis. My guess is how they aim for bigger fishes, and sizable seizures to justify their operation.
The only thing i dont get is, why do people still avoid using coin mixing services.

cheers

Here are two recent ones:

http://www.nbcnews.com/news/us-news/ex-secret-service-agent-plead-guilty-silk-road-bitcoin-theft-n379416
http://www.reuters.com/article/2015/06/23/us-usa-bitcoin-silkroad-idUSKBN0P31EP20150623

They were caught by agents tracking where Silk Road bitcoins were going.

coinbase only catches small time criminals, if we can call someone who uses a casino or what AgentofCoin said a criminal. these numbers are just so small in comparison to the number of criminals using bitcoin.
besides they don't really use a third party for their illegal activities, and they use mixers to cover their tracks.

a central database system must be developed to track criminals, thieves, hackers, fraudsters etc via the blockchain. it's badly needed.

i always wonder, if they were caught because of their negligence about using correctly a mixer, or if because you can track anyone in the end if you work hard enough

because they have still not caught the hacker from bitstamp, so two are the cases, they are not working hard or that hacker know how to hide himself 100%

The law enforcements probably don't care about individuals who buy drugs on the marketplace. They mostly go after the big sharks who use services like Coinbase for their transactions. As for anyone else getting tracked, just recently the hacker of Bitdice had their money frozen after the exchange realized it was the hacked coins that were transferred to the account.

If altcoins also count, then there's the 24 million qora (worth 13 BTC) and 0.8 BTC which were stolen when ziplibrary who was the owner of Qora's first exchange - ShareXcoin, suddenly shut down his site and ran off with the funds in June 2014.

Soon after the site went offline, he made the mistake of depositing these coins into Poloniex to dump and busoni - the owner of Poloniex, was able to determine that these coins were in fact stolen and seized them. Unfortunately for those who had lost funds at ShareXcoin however, all records of users' balances went down with the exchange so there was no way to return these coins to their rightful owners and thus the decision was made to donate all of it to the Qora Foundation instead:




ShareXcoin was an altcoin exchange so in addition to these coins which were seized/recovered, they had more stolen coins which they were able to successfully get away with.

This low rate of these bastards getting actually caught is what the aspiring rip-off artists take solace in as they develop their plan of attack. Coin mixing is a mixed bag as they allow some people arrange what they plan to pay in taxes but then offer the lowlifes opportunities to make use of their spoilage when they reappear in their next safety zone.

hey i thought bitcoin was supposed to be anonymous? then how did they tracked it?

Bitcoin isn't anonymous. It's pseudonymous. Your identity isn't recorded but your pseudonym (address) is. Addresses can be linked via transactions which are visible in the blockchain which is a public record of every single transaction ever made. By tracing these transactions through the blockchain, it is often possible to uncover the identity of a Bitcoin user. For example, if I frequently gambled at gambling sites and then withdrew my coins to an exchange, that exchange might be able to tell that I am a compulsive gambler.

Another example: If someone sold drugs or porn on the deep web and their addresses were analyzed, you might see incoming transactions coming from a number of different addresses. Some of these addresses might be linked to known exchange addresses. Others might be addresses that were once posted on a forum somewhere. Since most exchanges and forums keep records of emails, IP addresses, etc. it might be possible uncover the identity of a drug or porn user simply by asking the owner of the exchange or forum.

The ability to link transaction between addresses can be made more difficult by using change addresses. By using mixing services like Bitmixer.io that mix one's funds with those of others', it can be made nearly impossible with current (but possibly not future) blockchain analysis methods.

Really hoping your were just playing devils advocate here, or asking to inform.

how can it be possible to track transactions that go through a coin mixer?
it thought that you enter your amount to an address and get out that amount from another batch of addresses, how can anyone track it then?
is it with the amount going in and out? because i think you can take it out in parts(?)

The idea that Bitcoin is anonymous is actually a pretty common misconception. Many - if not most, mainstream news articles either don't know about the difference between anonymity and pseudonymity or they don't bother to distinguish between the two. And really, for the vast majority of people out there, Bitcoin is probably already "anonymous enough" as it is.

Actual anonymous coins like Monero and DASH exist too, of course. Transactions made using these coins aren't traceable.

Everything has 0-day vulnerabilities loppipls. It's statistically impossible with all permutations of code to undertake a large project and not leave a hole for blackhats to exploit. If it hasn't been found yet, it doesn't mean it isn't there.

What do you think all the patches and upgrades are all about anyway?

There are theoretical attacks depending on the number of coins/addresses in the mixing pool. Try putting a huge amount of coins into a mixer all at once and the coins which pop out the other end will most definitely be traceable back to the coins you put in.

Also, I'm not sure if it's possible with Bitmixer but another possible method might be to look at transfers to and from the mixing service. If someone knew that a transfer was sent to a mixing service, they could look for a second transaction of a similar size that takes place shortly after the first transaction. Some CoinJoin implementations such as Blockchain.info's Shared Coin can also be "broken" by comparing inputs and outputs and finding cases where they match:

http://www.coinjoinsudoku.com/advisory/

There's a serious issue with Coinbase here. If this is true, we shall boycott this company immediately. I understand that the FBI or other law enforcement agencies can track your acts, or business, but Coinbase shouldn't. I want to point out that when buy drugs with cash, US dollars, nobody sees the Bank of America, nor the Federal Reserve as having been part in your wrongdoing. Coinbase customers should be entirely free to do illegal things with BTC, and Coinbase has no right to prevent its customers from doing so, nor should it track its customers.

Thanks a lot Lorenzo, and everyone else who contributed examples and discussion of this issue.

I also find that a lot of less-technical people, even those who use Bitcoin, are under the false impression that it is anonymous.

People dont use mixers because they are afraid that the mixers will run away with their money and they think it is not easy to track them down with just their address, in reality, you are anonymous untill you attach a name/username to your bitcoin address

That Coinbase.com does this is fairly well documented. They actually follow your coins, it is not only in cases where users withdraw coins directly from coinbase to a darknet market or gambling site.

And they don't only freeze accounts for those uses. They also flagged a bunch of accounts for simply making donations to people such as gwern (gwern.net, he writes and publishes research about the darknet).

Obviously it would NOT BE SMART to donate to our site from an address linked to a coinbase account!

Guys and gals who are reading this post, stop and listen to what this dude is telling you. If you use Coinbase, find an alternative. That will teach them to mess with people.The power is in your hands. Opt to use it now.

 We can hopefully create an avalanche effect online whenever the situation calls for it. (In this case a reverse avalanche effect).

you need to attach id not your name only, your name can be a copy of another name, when you for example purchase a thing and put your name in, this isn't enough to identify you

because you can always deny that you are that person, that's why exchange ask for your ID and not your name only, only your ID(passport, drive licence ecc..) is the ultimate proof that you're that person

Only use a Bitcoin address once and then chuck it.  ;) Is that not what gives Bitcoin it's anonymous quality?

Do not use 3rd party exchanges and payment processors. This gives central organizations the ability to control and track your spending habits.

Use mixers, in the event where you need some financial privacy. {You have the same right, when you use cash....Why not with Bitcoin?}

If you use Bitcoin for illegal stuff, you will get caught... so just give up on that idea. Keep it legal, but keep it private.  8)

But how do you get coins to that address?

The Sheep Marketplace thief was caught using the transaction logs in Blockchain. Thomas Jiřikovský stole some BTC96,000 in December 2013 (at that point of time, worth more than $100 million), and was almost immediately identified by the disgruntled users. However, the Czech police arrested him only in March 2015, after verifying all the evidence. He might be the first thief, who was arrested primarily based upon the blockchain evidence. 

Tracking is not that easy as some want to paint it to be. If it was the case there would be no darknet markets or hackers getting away with theft.

The thing I like about bitcoin;
"No thief can hide evidence on blockchain" Everyone can see it and any person with some knowledge about how blockchain works can detect such crook people.

You can not hide your ass while using bitcoin...