Bitcoin Forum

There are a lot of stories of stolen bitcoins from hacked websites or fooled people.

I was wondering, since all transactions are in blockchain, is it technically possible to make blacklist of wallets where stolen funds where transferred (by claims of victims) to track transfers of those funds and report when the owner can be identified (for example when some goods where bought and delivery address is known)?

Or perhaps just block those blacklisted wallets and don't support them on the network (bitcoin) level?

It is possible to follow the coins, but it is impossible to know if/when the owner has changed. You cannot know if a transfer is from one owners address to another address of his, or if the new address belongs to a new owner.

Even proving that the coins belonged to you could sometimes be difficult  :)

On the other hand. Now all? exchanges require identification for buying or selling large amounts of bitcoins. If the thief sells the stolen coins through an exchange then he can be identified.

Blacklisting coins from the blockchain is impossible. Who could do that? Bitcoin is a decentralized system after all...

If the thief knows what to do it would be simple to run the coins through several tumblers and the trail would not be traceable.  Its around 2-3 percent fee to totally scrub the trail from your original btc address(s).  They may even commercially mix the trail several times.   Sorry, but its reality.  While this fact is frustrating for you, its what makes BTC really nice.  It allows coin holders to escape from the view of any Gov that might be leaning on them.  I don't know if I own a coin that hasn't been tumbled.  Just my take.

What you said can only be done by hard fork, saying update the wallet and hard code the address as a blacklist, and then persuade the community or at least the full nodes to upgrade the wallet. In a fully decentralised environment, this is not an easy thing.

If you mean a blacklist of addresses rather than a blacklist of wallets, then yes, it is definitely possible. The problem with this is that the blacklist would ultimately be biased by some at-interest party which might have their own agenda. Then those who do not like them or simply do not implement the blacklist feature could get blacklisted themselves if they accepted Bitcoin from a blacklisted address unknowingly. Even if they knew about it, what could they do to stop it? It is not up to the receiving party to decide whether they receive bitcoins or not-- only the sender gets to decide in this case. Besides, who would be responsible for keeping track of all of the possible scams that could be happening out there? It would also be impossible to keep up with the practically infinite number of addresses that these scammers could create. So while it is possible, it is highly impractical and I do not see such a system ever being used as a trusted method for tracking down stolen bitcoins.

You can possibly track regarding on those coins on where it has been moved to other address but if the hacker or scammer use mixer then for sure tracking would really be impossible since it have been mixed which its impossible for you to follow the track and also blacklisting is only possible if some service or exchange but I don't think that they would really bother.This is when bitcoin have been stolen it would really be hard to traced whos the owner.

OP, how do you know that the coins you own are "clean" and have not been used for any illegal activity?

Untraceable stolen bitcoin is one of biggest treat in blockchain technology, I hope programmers should look into cryptography in blockchain technology and device a formulae to block or blacklist those proven stolen bitcoin transactions because there has been  cases of hacked accounts which is a major setback in cryptocurrencies world.

Some are not always the coin wallet or bitcoin. is the problem but our owned system unit we use. there is a malicious virus working to you computer that is always the most problem. So is better to start to look our own system or OS  there is abnormality happen specially if we do always to open some site if we see that is good but there is danger to our computer. if the virus infected your computer they will trying to stolen your data record.

I think it would be very hard to do this. I don't think, that thief will use same address twice, there is no problem to get a new one. It is almost impossible to know, when coins were sold to other person as well. I think, that after coins are stolen, they will not stay on thief's wallet for long time.

It is only a downside for people who want to control and have power over other people - socialists, communists, fascists, dictators and any other authoritarian governments.  For people who like freedom, this is a plus, although even more privacy would be nice.

I'm not so sure if it is possible to tracking stolen bitcoins but you can possibly know the company or exchange that issue the address where stolen bitcoin was forward to and you can do that using the block explorer.

Thanks for elaborate answer carlfebz2!

But doesn't blockchain store history of all transactions? So basically if we know that wallet #abc has been involved in illegal activities everyone can see all transaction that were done from that wallet? And perhaps at the end it would be possible to track identity of wallet by one of child transactions.

As much as I would agree with you that we should rid the grid with thiefs and scammers I also feel like starting with blackliststing would undermine the whole essence of bitcoin. Which autorithy will decide which addresses to blacklist or not. Doing this would be the beginning of the end of bitcoins decentralization.

NBI can track these transactions number but it takes a lot of time to know who the hacker/scammer is because there's a lot of possibility on how the hacker would react it's way on making any transactions. I know the hacker or scammer knows this too but they have to make a non-traceable choice that doesn't bring any suspicion to their new address.

Well, how do you trace a stolen cash? There is a simple answer - you don't. You can't trace it. So this is not the problem of Bitcoin. Solving this problem would lead to cryptocurrency losing it's advantages. Becausew, common, do you really want your transactions to be unanonimous, and YOU would be identified? Let's say you store 10BTC on your wallet, and everyone can see the wallet with 10 BTC on it, do you want your name next to it?

Agreed. I wonder how they are going to track down the person that stole the coins from nicehash.  :-\ :-\ :-\ We'll just wait and see I guess.

Actually I had different vision -- let's say I stole 10BTC from you and everyone can see that transaction. All following transactions from my wallet can be tracked. And eventually one of the child transactions might make it possible to track me back. For example if I ever change BTC from my wallet to USD on exchange that requests identification, exchange will know my personal details and knowing that my wallet was involved in illegal activity will notify somebody (now sure who exactly should do such investigation, but let's call them crypto-police). And crypto-police will do the justice.

There is a way for you to track these missing bitcoins. Sadly, the change of ownership will still be anonymous. Thus, it may be impossible to retrieve.

i think the best way to start tracking a transaction is from the transaction hash

even if you blacklist the wallet or the address it doesn't really help since the owner can make new addresses and new wallets from which he can finish what he started. or he can just sell the btc or put them on a market.

But if he makes new wallets he will still transfer btc from old wallets there. So there will be a trace. Or am i mistaken?

I think if he shapeshifts BTC to alt coins , like litecoin , ethereum  then it is impossible to track. So BTC wallet address do not matter. Right ?

I had $ 200 btc in the past. But the wrong adrese was transferred. I threw an e-mail to change this. I still can not get a reply to my mail. It's been about 3 months. Now let's hope. Although I did not try so hard, I could not get a result. There's no turning back in doing this.

you can see where are your coins, but you cant find a person who owns them.

what if someone loads them on some exchange and get altcoins by selling those bitcoins., then he got totally fresh bitcoins.,

so in practical world its not possible.

you cant make every bictoin wallet use to blacklist address ., bitcoin is decentalized in nature., so nobody can control whats going on .

Come to think of it, the reason why people love Bitcoins is that of its anonymity, where the information of either the receiver and sender is unknown. Even the location where it was being used, when it was sent or received or other important info that is necessary to track down a transaction is impossible to achieve.

It counterparts the feature of a Credit / Debit card where you can collect or obtain info like what I have mentioned above.

Because of this, the supposedly "PROs" of Bitcoin is also its major flaw. You should know this from the beginning as there is no guarantee that it will return back to you, even if you hire the services of a renowned "PRO" tech or hacker guy.

Since the beginning of cryptocurrencies, most of the digital coins existed has already this kind of feature where you won't be able to gather information regarding a transaction. The only data that you could get from a tracking address is the amount that was sent or received and the addressess of both sender and receiver respectively. You should protect your wallet at all times, like a precious asset, as there's no assurance that you can retrieve any stolen coins from your storage. I really doubt that there's a developer, hacker or some sort of a techie guy that can do this impossible task.

So who will be the authority to manage this? Who will make sure that the designated authority will not abuse that power for their personal gain. <Let's say the USA get that authority and they start Black listing all coins donated to WikiLeaks or coins owned by other countries>

Bitcoin is not PayPal or some central authority that can be corrupted to abuse their power. The community will be their own authority. ^smile^

There are methods to track down stolen coins but it is usually very expensive. You can "follow" all transactions up until any output hits known address (exchange, service etc). Then you go to this service and pull their logs/KYC (assuming you are capable to motivate them to cooperate) and now you know person who received your coins. You go to that person and motivate him to reveal who gave him those coins and under what circumstances. To receive coins he had to sent his address somewhere so it is possible to to find out by investigating their communication channel, motivating every intermediary in process. Every step of the process will drain your budget and therefore only few organizations are capable to pull enough resource to get to the roots of stolen coins. Tracking down hacker nears the impossibility if stolen coins was managed by security professional, but there always a trail.

The development of a program that tracks a specific transaction would be very interesting, but I'm affraid that if the new "owner" deposits the coins in a let say ''online game page'' he could laundry them in a new address.

There are programs to do that. And if you have sufficient motivator you can go to that gambling service and persuade to giveaway their logs/identity of the person who deposited it. Either way this is pretty hard roadblock but it's possible to know what happened next.

my idea is they allowed it so that they will not invest much because of afraid to hack the account but instead they in cast it and they put in the bank. and reminder  to us not to join other network  if you don't know if leget or not

Fortunately there is no such power, a victim may contact some exchanges to blacklist an address or some addresses which relate to the thief address, but not all of the exchanges in this world that you can ask to do that, it requires lots of resources obviously, and how if it just BTC10 but the resources that you need to blacklist the thief address more than BTC10?
Most cases are unhelped, the victims can't do anything about it but let it go.

A short story;
After MT-Gox hacked which BTC850,000 bitcoin stolen, the owners can't do anything about it, but law enforcement keeps tracking the transactions and ended with someone from BTC-e (Alexander Vinnik) was arrested due to dealing with money laundering which suspected relate to funds from MT-Gox as well.

So, if you have at least BTC100,000 that someday get stolen and still have enough resources to track those coins, then you may be able to recover the funds even though with small chance and it may takes years.

Yeah you need a lot of resources to be able to block or track your stolen bitcoins and it seems unfair for others with few bitcoins that they can't do anything when their digital assets got hacked. Money talks, Money matters, just be careful with your funds to prevent from getting hacked.

You are certainly not the first to propose the blacklisting of certain wallets that have been accused of theft of someone else's bitcoin. But here's why this is never going to happen. First of all which authority is going to decide whether a wallet should be blacklisted or not. This undermines the decentralization of bitcoin as whole because a single authority will have the power to blacklist whichever wallet they want. Not to mention how you will verify if the coins were actually stolen. People can start accusing other of theft (for personal interest) and there's no way to know for sure.

This is exactly the reason universally agreed upon black list probably will never see the light of the day. There is and there will be cases where coins will be tracked, accounts will be blocked on suspicions but it is very unlikely some association will decide and enforce universal blockade of coins. Also such measure will likely result in raise of new BTC laundry services that will be glad to accept shady BTC.

Anonymity is the thing that Bitcoin is known for. Bitcoin has been in the industry for 9 years now and in this years there have been many cases where people lost their BTC to hackers and fraudsters. All of those hackers are still roaming happily as none of them have ever been identified.
So tracking down BTC transactions won't help as their owners can't be traced. It is pointless to track a BTC transaction as Bitcoins can be splitted whenever their owner wants. Mixing services are created for this purpose that an amount is divided into many small amounts and then converted back to a big amount for the purpose of anonymity. So tracking down stolen Bitcoins is completely a waste of time.

There will always be a link between bitcoin transactions, however with bitcoin mixers being used it would be very difficult to determine exactly which wallets are currently storing stolen fund. Odds are that most small transactions can be traced back to a wallet containing stolen funds, same goes with cash.

The problem is there are several ways of conducting bitcoin transactions without using exchanges.

i think to make coins more secure there should be some method to track down

bitcoin transactions are traceable,it is the main reason decentralization works , the world can watch and confirm that a transaction is legit. but recovering stolen coins would require finding the people who are holding the coins, but this is almost impossible because of the anonymity of wallet owners.

Exchanges can act as a shuffling mechanism, so it is important that they do know their customer (KYC procedures). But even so you need a judge to have access to such information from the exchange.

There is a way for you to track these missing bitcoins. Sadly, the change of ownership will still be anonymous. Thus, it may be impossible to retrieve.

This guy is right

It would have been very helpful if any bitcoin theft case can be tracked.However, the developers may
try to fix a patch or another node of codes or something to enable this security feature of being able to track
down the identity of the culprit of theft issue.

How i wish this is possible cos i have got a lot of coins stolen from me in the past before i learnt to better secure my account.

I dont know if it's just me but I dont want this to be encouraged.  It greatly hurts the fungibility of coins in the project.  I understand that it sucks for people that got hacked/scammed, but not chasing/tracking those coins is for the good of the project, imho.

You could technically track the bitcoin if the coins went through an exchange, however this is a problem with bitcoin, as it becomes older hackers may find a way into the system.

Tracking is possible but not always. Once they are converted to alt, it increases difficulty.

The hacker/thieves nowadays have become just like their scams more sophisticated. We cannot do anything to trace who the hacker is as long as many legit and non legit casino sites do not care to check where the money comes from as long as they are making profit for themselves. In fact this is the most common way nowadays how bitcoin are mixed and tainted easily from anyone with the ability to do so.

Definitive solution is to warn people to not send bitcoin to anyone before being 101% sure that they are a legit company or a legit person.

Tracking is possible only on those coins where they have been moved to another address, but the scammer is using a mixer, then tracking is really impossible :(

I agree with this idea. There should be a way to track stolen bits. So bitcoin players will not fear losing their money for no apparent reason and do not find the culprit. Many IT specialists have stolen accounts and then taken the money from our bitcoin wallet. People who are not good at technology will not detect the culprit.

Tracking stolen Bitcoins is an important task in putting things in order in the market of crypto currency and can cause more confidence in investors that will affect the overall capitalization.

Even if you manage to discover and proof those were stolen coins, what legal procedures can be done to force the thief to give it back? Can he be arrested?

I would love to find the bastard that stole my coins from my wallet..State Security apparatus like FBI defiantly have the ability to track the IP of a transaction and track the coins through mixers to a new address and IP...TOR and VPN actually make it EASIER for them.
But they will never give a shit about small time thefts they only protect the uber-rich.

I would much prefer to deal with the thief most personally anyway...The 'Legal' system is designed to protect thieves and there is NO BIGGER THIEF than Governments.

Sure you can make a list of the addresses that have stolen your funds, but you have to know that bitcoin addresses are dynamite means they change after every transaction, so tracking the stolen funds is going to take a lot of work, plus what is the purpose of this list, it is not like you can do anything about it, the best thing you can do is ask why the funds got stolen in the first place and learn from that.

To track the stolen bitcoin? of course we as bitcoin users ask how to track the stolen bitcoin? or is there any other way about it? because we are afraid the bitcoin we get is painstakingly stolen by the unaccountable person.

There are lots of stories for stolen bitcoin.  We must have protect our points  from the the hackers.There are many IT developer  can hack your account  and take your all the bitcoins from your wallet if your technology  not be strong. And also you  can't  detect the thieves.

Remember asking for more regulation will always bring unintended consequences so I believe what you are asking for could possibly be put in to effect but the consequences of such an action would basically kill what is great about bitcoin in the first place. Never give up your freedom in order to attain complete security.

Bitcoin has the only features that if once the funds are transferred by the user than it is unable to refund unless the recive= send it back to the wallet and there is no other development med like in which we can beak the transaction and track the stolen coins all around the world. Thier are many people using multiple wallets to make their crypto management more simple.

It's possible to track down stolen bitcoins by following the input/output trail, but they will only help if they end up depositing to a known address where you could potentially gather their KYC information. If they end up trading for something such as monero, then the trail will probably be irreversibly broken.

Since it back and forth post ...

can I add

Stolen Bitcoin Tracing - Computerphile
https://youtu.be/UlLN0QERWBs

It's interesting how quickly history disappears in cryptocurrency land :)

See, this was actually tried on a significant scale back in the old days. A popular margin trading site - Bitcoinica - was hacked, and as a result, MtGOX (the #1 exchange at the time) instituted a policy that they wouldn't accept deposits of the "tainted" coins stolen by the hacker - and would put a temporary AML freeze on any account that tried - under the theory that such a person might have been responsible (or know who's responsible) for the hack.

Example of a thread about this (https://bitcointalk.org/index.php?topic=73385.0).

People quickly realized, within a few weeks, that this was not a tenable way forward, b/c overwhelmingly the people affected by the policy were randos who had nothing to do with the hack - they'd just been paid coins that, at some point in the past, had been spent by the hacker.

When the founder of Bitcoinica asked MtGOX to stop this policy, they did, and since then nobody has seriously tried it again.

Right now is too many people are bad, or Somebody has motive to be doing like that to track someone if you are giving a chance to tracking you and lead to stolen you bitcoin in your wallet.The best thing is you cannot give your personal information about your wallet to someone or even a close friend and be sure that your password is very unique.you can get more wallet to divided your coin if ever someone hack your wallet small amount will lose.

Exactly cases of stolen Bitcoins or those related to some illegal/shady activities are the good example how regulation can help and why exchanges need to obey some strict rules opposed by governments. It's for the benefit of users and not to harm Bitcoin. And we are against regulation we forget that everyone of us could became a victim of cryptocurrencies illegal activities too.
But I agree that blocking suspicious transactions is not the best idea, it could make more harm than good.

I feel like this will become the eventual downfall of "open ledger" and non opaque blockchains like Bitcoin and the other countless clones of it.  Major exchange sites will begin to realize just how much liability this puts on them because they absolutely 100% have to report the criminals and have to keep track of these "tainted" coins, and if not then it will look bad on them and will be penalized in some sort of way.

If you have coins that successfully hides all of this meta info from the coins they are exchanging for customers, then that will therefore reduce that liability and also makes exchanges more willing to accept these type of coins. ... At least that's how I see it eventually playing out unless there is some weird law that passes where exchanges are forced to only accept open ledger coins.

Perfect example of how that practice of exchanges having to play the "regulators" as well as providing a service is not really feasible.  If exchanges didn't have the ability to be able to check the "taint" on the coins then it wouldn't really matter.  It's still a good thing to have KYC in terms of knowing who is buying and selling coins for tax purposes, but being able to track coins from 5 wallets ago or so that came from a criminals wallet is bad for the global (crypto) economy and end up hurting people who are not doing anything wrong at all.

I think this is were people will see the need for some sort of centralization or "policing" of transactions/records. Cryptocurrencies, Blockchain technology,etc are all excellent in an Utopian world where people are all honest and law abiding. But in reality it is not the case, a person or a group with ulterior intent would surely put time to come up with a fool proof plan to steal and eventually get the cryptos converted to fiat. They might even go to the extent of faking their identification if we think that exchanges provide some sort of security! That's why I believe some regulating body or bodies are needed for cryptocurrencies to get mass adopted.

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well this is one of the weaknesses of the digital currency or can also be called bitcoin one of them, the lack of digital currencies like this easy to be stolen, and when lost who will be responsible, yes only the owner of the account and usually if the account has been hacked by others then our bitcoin will disappear as well and can not be restored

I would argue that this is not the weakness. This is how any trust-less flat structure should function. In such structure you can't really offload your responsibility to higher authority so you have to assume it as is and pay dearly for your fails because there is nobody to argue about them. It may seem harsh but that gives you an idea of how higher authority feels when making decisions.

Sometimes its pretty hard to track them down while its even harder to prove that the coins are really yours. You then might needs witnesses

Blocks doesnt permit tracking facility as far as i know they just provide the end-to-end motility

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