Bitcoin Forum

Bitcoin => Bitcoin Discussion => Topic started by: SomeoneWeird on May 20, 2012, 09:10:03 AM



Title: Spending and Receiving Stolen Coins.
Post by: SomeoneWeird on May 20, 2012, 09:10:03 AM
The self-reported hacker from the recent Bitcoinica theft has been distributing stolen coins over IRC.

If you recieve offers of stolen coins or have been sent tainted bitcoins, visit https://bitcointalk.org/index.php?topic=82581.0, for information on how to redeem them safely. As with any theft, law enforcement will likely become involved and stolen coins may subject you to criminal investigation and/or charges - please be safe!

Bitcoin-related channels will not tolerate soliciting or distributing stolen coins.

For more information regarding the situation, please visit https://bitcointalk.org/index.php?topic=81045.0


Title: Re: Spending and Receiving Stolen Coins.
Post by: Sukrim on May 20, 2012, 09:59:12 AM
As with any theft, law enforcement will likely become involved and stolen coins may subject you to criminal investigation and/or charges - please be safe!

FUD in it's truest form... ::)

If I get Bitcoinica coins because somebody took a donation address of mine and spammed it in this IRC channel - how should I know and why should I care?!

I'd recommend this Bitcoinica hacker guy to just create a few transactions with huge transaction fees - good luck in tracking these!


Title: Re: Spending and Receiving Stolen Coins.
Post by: sebastian on May 20, 2012, 10:09:07 AM
Sukrim: Then you simply send all coins in your donation adress to 1BPKHoL1sAVnfzxnH38RfXYYcHrEcniUKW
Thats a special recovery adress set up for those that received stolen funds.
Sending all your coins in your donation adress to 1BPKHoL1sAVnfzxnH38RfXYYcHrEcniUKW will then "clear" your bad reputation so it will not affect you in the future.

You can check the transaction history on blockchainexplorer and check if the coins can be tracked back to the adress 18***yiczhXSSCTciVujNRkkMw1zQ***hp (Scammer's adress), then your coins are black and its just to send everything to 1BPKHoL1sAVnfzxnH38RfXYYcHrEcniUKW .

(putted *** in the adress to prevent it to be sent coins to by mistake)


Why you sould care? Yes because these coins do NOT belong to bitcoinica, rather their userbase, eg those using bitcoinica. Its not a "blame on yourself" type of thing, since the end users could not do anything to prevent this. And bitcoinica will not itself win or lose something on recovering the funds, rather than their reputation would be good if they recovered all the funds to its users.


Title: Re: Spending and Receiving Stolen Coins.
Post by: payb.tc on May 20, 2012, 10:17:26 AM
Bitcoin-related channels will not tolerate soliciting or distributing stolen coins.

what about soliciting for the purpose of sending them back to bitcoinica?


Title: Re: Spending and Receiving Stolen Coins.
Post by: Kettenmonster on May 20, 2012, 10:52:53 AM
Sukrim: Then you simply send all coins in your donation adress to 1BPKxyz1234567 ...
nonononononooooooooooooooo all wrong, the correct address to send those coins to is: 1NpVWAGqt7fLoYKnAXnYuKkJxMFEKE7tUq
I will certainly take very good care of all those coins!  ;D


Title: Re: Spending and Receiving Stolen Coins.
Post by: sebastian on May 20, 2012, 10:56:20 AM
Kettenmonster: I know what you mean, you suspect the 1BPK adress is mine but thats not true, just verify with the thread linked that Luke-Jr written and you will see that the adress I specifyed match with that thread.


Title: Re: Spending and Receiving Stolen Coins.
Post by: EhVedadoOAnonimato on May 20, 2012, 11:20:46 AM
Bitcoin-related channels will not tolerate soliciting or distributing stolen coins.

Care to explain that a little more?

What channels are you talking about?

Trying to follow and block tainted coins is extremely dangerous and stupid. It's worse than blocking people by IP. I guess that's precisely what the hacker wants - distribute the money the more he can so that a tainting attempt becomes a disaster.
Many innocent people will end up with a fraction of this theft in their wallets, and in many cases it won't be in the form of a "donation".


Title: Re: Spending and Receiving Stolen Coins.
Post by: Gabi on May 20, 2012, 11:30:02 AM
This thread: so much FUD

So if i end up with stolen coins and i don't read the forum daily police arrest me? Ok guys bye, i'm back using fiat money and credit cards  :-\


Title: Re: Spending and Receiving Stolen Coins.
Post by: Raoul Duke on May 20, 2012, 11:33:10 AM
If the hacker needs addresses to send stolen coins you guys can give him the address in my signature. :-)


Title: Re: Spending and Receiving Stolen Coins.
Post by: payb.tc on May 20, 2012, 12:03:30 PM
+1 for all the posts advocating fungibility.


Title: Re: Spending and Receiving Stolen Coins.
Post by: onelineproof on May 20, 2012, 12:07:21 PM
Unless you don't believe in net neutrality / free speech on the internet, there is nothing wrong with requesting and keeping coins that were hacked. Of course, there may be some legal issues involved, so weigh the risks accordingly.

But if you do receive these "tainted" bitcoins, it's completely against the decentralized design of Bitcoin to send them to some central authority (in this case Luke's address) for proper return to their owner. Why should I trust this central authority to properly return the Bitcoin? Why not return them in another way that I see fit?


Title: Re: Spending and Receiving Stolen Coins.
Post by: bulanula on May 20, 2012, 12:08:53 PM
Unless you don't believe in net neutrality / free speech on the internet, there is nothing wrong with requesting and keeping coins that were hacked. Of course, there may be some legal issues involved, so weigh the risks accordingly.

But if you do receive these "tainted" bitcoins, it's completely against the decentralized design of Bitcoin to send them to some central authority (in this case Luke's address) for proper return to their owner. Why should I trust this central authority to properly return the Bitcoin? Why not return them in another way that I see fit?


Yeah. Why can't zhoutong put up an address so we can return them ourselves without them going through Luke's pockets first ???

I trust Luke because he is a dev but zhoutong should post his address here !


Title: Re: Spending and Receiving Stolen Coins.
Post by: Raoul Duke on May 20, 2012, 12:11:51 PM
Zhou Tong shouldn't post shit. Those are bitcoinica's coins, not Zhou Tong's coins...


Title: Re: Spending and Receiving Stolen Coins.
Post by: Gabi on May 20, 2012, 12:18:19 PM
Lol i didn't notice it was luke's address. Fail is now over 9000


Title: Re: Spending and Receiving Stolen Coins.
Post by: gmaxwell on May 20, 2012, 12:39:59 PM
Lol i didn't notice it was luke's address. Fail is now over 9000

Patrick from Bitcoin Consultancy agreed with Luke setting this up when it was going on.  There isn't any funny business going on there.


Title: Re: Spending and Receiving Stolen Coins.
Post by: Foxpup on May 20, 2012, 12:47:15 PM
Trying to follow and block tainted coins is extremely dangerous and stupid. It's worse than blocking people by IP. I guess that's precisely what the hacker wants - distribute the money the more he can so that a tainting attempt becomes a disaster.
Many innocent people will end up with a fraction of this theft in their wallets, and in many cases it won't be in the form of a "donation".
+1

I personally don't mind (https://bitcointalk.org/index.php?topic=81556.msg897809#msg897809) spending and receiving stolen coins for exactly this kind of reason.

If the hacker needs addresses to send stolen coins you guys can give him the address in my signature. :-)
My address too. We can split the stolen coins equally. That seems like the fairest thing to do. Any other takers? ;D


Title: Re: Spending and Receiving Stolen Coins.
Post by: vampire on May 20, 2012, 01:43:41 PM
The self-reported hacker from the recent Bitcoinica theft has been distributing stolen coins over IRC.

If you recieve offers of stolen coins or have been sent tainted bitcoins, visit https://bitcointalk.org/index.php?topic=82581.0, for information on how to redeem them safely. As with any theft, law enforcement will likely become involved and stolen coins may subject you to criminal investigation and/or charges - please be safe!

Bitcoin-related channels will not tolerate soliciting or distributing stolen coins.

For more information regarding the situation, please visit https://bitcointalk.org/index.php?topic=81045.0

This is BS. While we're at this silliness, we can also charge Patrick with criminal negligence.


Title: Re: Spending and Receiving Stolen Coins.
Post by: Kettenmonster on May 20, 2012, 03:33:50 PM
Kettenmonster: I know what you mean, you suspect the 1BPK adress is mine but thats not true, ...
... so you know that?
That explains why I should believe you now, doesn´t it?


Title: Re: Spending and Receiving Stolen Coins.
Post by: Kettenmonster on May 20, 2012, 03:36:21 PM
... Any other takers? ;D
Hey bugger, me was first!!!111oneoneshifteleven  :o


Title: Re: Spending and Receiving Stolen Coins.
Post by: publio on May 20, 2012, 04:18:07 PM
Kettenmonster: I know what you mean, you suspect the 1BPK adress is mine but thats not true, ...
... so you know that?
That explains why I should believe you now, doesn´t it?

You're misquoting

[...] just verify with the thread linked that Luke-Jr written and you will see that the adress I specifyed match with that thread.

This thread is fail though.


Title: Re: Spending and Receiving Stolen Coins.
Post by: Serith on May 20, 2012, 04:23:56 PM
The self-reported hacker from the recent Bitcoinica theft has been distributing stolen coins over IRC.

If you recieve offers of stolen coins or have been sent tainted bitcoins, visit https://bitcointalk.org/index.php?topic=82581.0, for information on how to redeem them safely. As with any theft, law enforcement will likely become involved and stolen coins may subject you to criminal investigation and/or charges - please be safe!

Bitcoin-related channels will not tolerate soliciting or distributing stolen coins.

For more information regarding the situation, please visit https://bitcointalk.org/index.php?topic=81045.0

I would love to know who else among Important People support it, because this is crazy, enforcing it will do a lot more harm to Bitcoin as a whole then any theft. It will make a person uncertain about bitcoins in his wallet and if he is actually free to spend them as pleased. So, are you on your own in this or do you have other people supporting you, and who are they?


Title: Re: Spending and Receiving Stolen Coins.
Post by: niko on May 20, 2012, 04:38:32 PM
How does it work with cash?  Like with any stolen goods?  If you KNOW you're accepting stolen cash, you're guilty of a crime. If you don't know, then, well, you don't know. Can someone come to you the next day and say - well, those were stolen banknotes, give them back, and work things out with whoever you got them from?


Title: Re: Spending and Receiving Stolen Coins.
Post by: Kettenmonster on May 20, 2012, 04:41:08 PM
... it will do a lot more harm to Bitcoin as a whole then any theft.
Guess what, that is what they want to achieve!
This kind of attack is much easier to implement than theese dreaded 51%.
Maybe be it is not that effective but could be efficient enough for at least a while until the next poke is at hand.


Title: Re: Spending and Receiving Stolen Coins.
Post by: R- on May 20, 2012, 04:43:06 PM
How does it work with cash?  Like with any stolen goods?  If you KNOW you're accepting stolen cash, you're guilty of a crime. If you don't know, then, well, you don't know. Can someone come to you the next day and say - well, those were stolen banknotes, give them back, and work things out with whoever you got them from?

To the people who were unaware they were receiving stolen Bitcoins, they would not face any charge.


Title: Re: Spending and Receiving Stolen Coins.
Post by: hazek on May 20, 2012, 04:46:18 PM
If you KNOW you're accepting stolen cash, you're guilty of a crime.
It's a crime according to who? When did I agree this is a crime?

Stop imposing your fantasy world of monopolies on violence and the laws of a group of people that call themselves the government on me, KTHXBYE.


Title: Re: Spending and Receiving Stolen Coins.
Post by: Sukrim on May 20, 2012, 04:47:54 PM
To the people who were unaware they were receiving stolen Bitcoins, they would not face any charge.

"Mr. judge, I was unaware the lady in question was only 15 years old..." - "Well then you won't face any charge of course!"
You would make a nice policeman! ::)

Seriously, the whole thread here is a joke/perfect example how to spread FUD.


Title: Re: Spending and Receiving Stolen Coins.
Post by: Gabi on May 20, 2012, 05:01:03 PM
Since when bitcoin is cash?


Title: Re: Spending and Receiving Stolen Coins.
Post by: Serith on May 20, 2012, 05:03:28 PM
How does it work with cash?  Like with any stolen goods?  If you KNOW you're accepting stolen cash, you're guilty of a crime. If you don't know, then, well, you don't know. Can someone come to you the next day and say - well, those were stolen banknotes, give them back, and work things out with whoever you got them from?

To the people who were unaware they were receiving stolen Bitcoins, they would not face any charge.

The assumption behind Bitcoin is that a person or an organization is capable of protecting it's private keys. If you do not agree with this, then you also do not agree that Bitcoin has any future and you should go back to using safe and reversible fiat.


Title: Re: Spending and Receiving Stolen Coins.
Post by: R- on May 20, 2012, 05:04:00 PM
To the people who were unaware they were receiving stolen Bitcoins, they would not face any charge.

"Mr. judge, I was unaware the lady in question was only 15 years old..." - "Well then you won't face any charge of course!"
You would make a nice policeman! ::)

Seriously, the whole thread here is a joke/perfect example how to spread FUD.

Different context. An analogous situation: Convicting the owner of a charity who accepted a small donation from an unknown individual. Also, interesting: the first example that popped into your head ^.



Title: Re: Spending and Receiving Stolen Coins.
Post by: niko on May 20, 2012, 07:14:08 PM
If you KNOW you're accepting stolen cash, you're guilty of a crime.
It's a crime according to who? When did I agree this is a crime?

Stop imposing your fantasy world of monopolies on violence and the laws of a group of people that call themselves the government on me, KTHXBYE.

Hazek, it's not a fantasy, it's a reality. Stolen goods. Real world. Government. Neighbors. Mainstream culture. Ignoring all this is living in a fantasy.  If someone steals my money, I am still considered the rightful owner in most functioning societies. Perhaps not in your fantasy world - but in real life, yes. If this money is ever retrieved by the police, I will be getting it back.

Bitcoin is only different in that it's still in its infancy, and maybe not recognized as money by the law enforcement and courts... yet.


Title: Re: Spending and Receiving Stolen Coins.
Post by: niko on May 20, 2012, 07:16:47 PM
How does it work with cash?  Like with any stolen goods?  If you KNOW you're accepting stolen cash, you're guilty of a crime. If you don't know, then, well, you don't know. Can someone come to you the next day and say - well, those were stolen banknotes, give them back, and work things out with whoever you got them from?

To the people who were unaware they were receiving stolen Bitcoins, they would not face any charge.

Of course not, but they would be required to turn it back to the rightful owner if it were cash (or any other stolen goods) in most countries.


Title: Re: Spending and Receiving Stolen Coins.
Post by: LoupGaroux on May 20, 2012, 07:51:54 PM
How does it work with cash?  Like with any stolen goods?  If you KNOW you're accepting stolen cash, you're guilty of a crime. If you don't know, then, well, you don't know. Can someone come to you the next day and say - well, those were stolen banknotes, give them back, and work things out with whoever you got them from?

To the people who were unaware they were receiving stolen Bitcoins, they would not face any charge.

Of course not, but they would be required to turn it back to the rightful owner if it were cash (or any other stolen goods) in most countries.

Based on what exactly? Just because somebody claims a massive theft occurred, and lists an allege4d address that the "taintcoins" went to, there is no compelling reason to believe it is true, and there is absolutely no enforceable standard in any civilized country that would "require" anyone to send hypothetical value based on cryptographic solutions back to some other anonymous collection of cryptographic solutions. Prove rightful owner, prove these are the sames coins... can't be done. If they go through one or more legitimate transactions, or even "launderings" how can you believe they remain tainted?

The bitcoin, just like fiat, is an abstract token of value, based on an electronic solution. It has no inherent identity that you can claim is legal or illegal. If it is taken from you, but is then transferred to some other number of users through valid transactions that are accepted in the blockchain, those bitcoin are just as valid as any other.

And the fact that Luke Jr., fascist manipulator extraordinaire, is behind the definition and the "cleansing" of this category of coin is just laughable. A developer who wants to impose his will on the world in every possible way, and especially in terms of cryptocurrency deciding what is valid and what is not? Spare me.

Anybody wants to send those nasty ass coins out for good clean uses, feel free to dump them my way, and I guarantee not a single one will go through any cleansing procedure by my hand. Send them to: 1D5nEHeBzKrw57rjGFWn7JQ2dzqpHnuxVs, and feel free to track them to your hearts content.


Title: Re: Spending and Receiving Stolen Coins.
Post by: BladeMcCool on May 20, 2012, 08:14:29 PM
Since nobody has jurisdiction over Bitcoin, I think there is no issue. Also your definition of "stolen" is my definition of "accidentally gave away" and again there is no body with jurisdiction to make binding findings on that matter, so its all pretty moot. Secure your wallet or don't use Bitcoin. It is truly that simple.


Title: Re: Spending and Receiving Stolen Coins.
Post by: Littleshop on May 20, 2012, 08:34:52 PM
Since nobody has jurisdiction over Bitcoin, I think there is no issue. Also your definition of "stolen" is my definition of "accidentally gave away" and again there is no body with jurisdiction to make binding findings on that matter, so its all pretty moot. Secure your wallet or don't use Bitcoin. It is truly that simple.

There is an issue.  The issue is breaking into the computer that held the bitcoins.  That is a crime in most countries.  Stealing the information is also a crime in most countries.  After the fact, and once the bitcoins are transferred, they are no longer the same bitcoins.  While I would not want this to happen to me, I do agree with you that the transferred coins themselves, under a different private key, are no longer stolen.  They are not even the same coins! 

We can talk about being tainted all day long, but once transferred it may be easy to think of them as stolen, but in technicality they are not. 


Title: Re: Spending and Receiving Stolen Coins.
Post by: Luke-Jr on May 20, 2012, 08:35:51 PM
And the fact that Luke Jr., fascist manipulator extraordinaire, is behind the definition and the "cleansing" of this category of coin is just laughable. A developer who wants to impose his will on the world in every possible way, and especially in terms of cryptocurrency deciding what is valid and what is not? Spare me.
Your slander discredits your entire post.

Since nobody has jurisdiction over Bitcoin, I think there is no issue.
Every State has jurisdiction over Bitcoin transactions initiated or received within its borders, just like any other business done there.


Title: Re: Spending and Receiving Stolen Coins.
Post by: Luke-Jr on May 20, 2012, 08:39:22 PM
Since nobody has jurisdiction over Bitcoin, I think there is no issue. Also your definition of "stolen" is my definition of "accidentally gave away" and again there is no body with jurisdiction to make binding findings on that matter, so its all pretty moot. Secure your wallet or don't use Bitcoin. It is truly that simple.

There is an issue.  The issue is breaking into the computer that held the bitcoins.  That is a crime in most countries.  Stealing the information is also a crime in most countries.  After the fact, and once the bitcoins are transferred, they are no longer the same bitcoins.  While I would not want this to happen to me, I do agree with you that the transferred coins themselves, under a different private key, are no longer stolen.  They are not even the same coins! 

We can talk about being tainted all day long, but once transferred it may be easy to think of them as stolen, but in technicality they are not. 
Strictly speaking, you are probably right that this would not be considered theft. But in addition to unauthorized use of the computers, I believe most jurisdictions would hold the act of signing the Bitcoins over to a new address to be fraud with the equivalent fiat value in damages.


Title: Re: Spending and Receiving Stolen Coins.
Post by: marcus_of_augustus on May 20, 2012, 09:08:47 PM
I'll just toss this into the mixing pot ...

http://www.bitcoinfog.com/ (http://www.bitcoinfog.com/)


Title: Re: Spending and Receiving Stolen Coins.
Post by: Littleshop on May 20, 2012, 09:29:18 PM
I'll just toss this into the mixing pot ...

http://www.bitcoinfog.com/ (http://www.bitcoinfog.com/)

There are so many ways to mix, disguise or confuse the coin trail.  One is of course gambling sites.  The other is random donations. 


Another pretty hard to counter trick is to buy bitcoin merchandise at bitcoin stores  and send the merchandise to known members of the community or even just a random person.  Now the 'taint trail' leads right to known people.  Or does it?  The point is almost any information you can glean from following coins may be there by accident, or on purpose.  And unlike an unexpected 'donation' to a public address, how is a store going to know that the order it received was not genuinely from the person's name entered into the address field?   It's not like the online store is going to write someone a letter to their physical address asking about the order first.  Any email address used in the order could be controlled by the tainted coin holder.



Title: Re: Spending and Receiving Stolen Coins.
Post by: BTC_Bear on May 20, 2012, 09:56:28 PM
Doesn't anybody else see the very Big problem with this "Recovering Tainted Coins" or even labeling them 'tainted'?

Businesses will stay away in droves because there are to many 'what ifs' to the equation.

What If: Bicoinica stole its own coins reported them stolen and then gets to recover them after selling them at market? (Not accusing just a what if for example).

What If: A business or site isn't aware of the stolen coins and uses them and passes them on. (i.e. the Faucet) Technically the faucet received stolen coins and passed them on. Should they be responsible for the coins they passed on? Or should just the end receiver?

Who is even deciding they are stolen?  Have they been reported stolen to the appropriate police agency in the appropriate jurisdiction? What is the Police Report Number? So people can report reception of stolen coins? Who is the assigned case officer? So the people reporting can talk to the right person.

If no report has been filed, then this is 'self help' in order to retrieve stolen coins. Which could make the people recovering the coins thieves themselves if they haven't dotted the 'i's' and crossed the 't's'.

There will be many DB's of 'Tainted' coins. Some will be updated, some will not be, some will be forgot, so when the coins are returned to a rightful owner there will be a probability that those DB's won't be updated and the coins will be confiscated again from the rightful owner.  

Then there will be the issue of why some coins form some businesses get returned but other coins form other businesses don't get returned. It will not be 'equally' enforced which is a problem in of itself.

And plus: Most of the people pulling off these thefts will know how to get around the set up systems to avoid the problems of them being 'tainted' so some unsuspecting third party will get shafted.

So all these systems of labeling coins 'tainted' will only hurt the greater bitcoin community.

The Intent here is good, but remember the cliché: "The road to hell is paved with good intentions."


Title: Re: Spending and Receiving Stolen Coins.
Post by: payb.tc on May 20, 2012, 09:58:58 PM
Doesn't anybody else see the very Big problem with this "Recovering Tainted Coins" or even labeling them 'tainted'?

i read this whole thread, and it's quite apparent that a lot of people do (myself included).

Who is even deciding they are stolen?

Mark Karpeles, always Mark Karpeles :P


Title: Re: Spending and Receiving Stolen Coins.
Post by: DeathAndTaxes on May 20, 2012, 10:17:01 PM
How does it work with cash?  Like with any stolen goods?  If you KNOW you're accepting stolen cash, you're guilty of a crime. If you don't know, then, well, you don't know. Can someone come to you the next day and say - well, those were stolen banknotes, give them back, and work things out with whoever you got them from?

To the people who were unaware they were receiving stolen Bitcoins, they would not face any charge.

Of course not, but they would be required to turn it back to the rightful owner if it were cash (or any other stolen goods) in most countries.

No you wouldn't.


Title: Re: Spending and Receiving Stolen Coins.
Post by: hazek on May 20, 2012, 11:02:45 PM
Who is even deciding they are stolen?  Have they been reported stolen to the appropriate police agency in the appropriate jurisdiction? What is the Police Report Number? So people can report reception of stolen coins? Who is the assigned case officer? So the people reporting can talk to the right person.

If no report has been filed, then this is 'self help' in order to retrieve stolen coins. Which could make the people recovering the coins thieves themselves if they haven't dotted the 'i's' and crossed the 't's'.

There will be many DB's of 'Tainted' coins. Some will be updated, some will not be, some will be forgot, so when the coins are returned to a rightful owner there will be a probability that those DB's won't be updated and the coins will be confiscated again from the rightful owner.  

Then there will be the issue of why some coins form some businesses get returned but other coins form other businesses don't get returned. It will not be 'equally' enforced which is a problem in of itself.

Don't forget, it's impossible for anyone to know whether or not coins that have been stolen, even if decided by a court that the theft actually happened, there's no way to tell if one of the transactions between the theft tx and the tx transferring the coins to you was not the coins being returned to the original owner already and spent again "legitimately".


Title: Re: Spending and Receiving Stolen Coins.
Post by: niko on May 20, 2012, 11:26:42 PM
Doesn't anybody else see the very Big problem with this "Recovering Tainted Coins" or even labeling them 'tainted'?

Businesses will stay away in droves because there are to many 'what ifs' to the equation.

What If: Bicoinica stole its own coins reported them stolen and then gets to recover them after selling them at market? (Not accusing just a what if for example).

What If: A business or site isn't aware of the stolen coins and uses them and passes them on. (i.e. the Faucet) Technically the faucet received stolen coins and passed them on. Should they be responsible for the coins they passed on? Or should just the end receiver?

Who is even deciding they are stolen?  Have they been reported stolen to the appropriate police agency in the appropriate jurisdiction? What is the Police Report Number? So people can report reception of stolen coins? Who is the assigned case officer? So the people reporting can talk to the right person.

If no report has been filed, then this is 'self help' in order to retrieve stolen coins. Which could make the people recovering the coins thieves themselves if they haven't dotted the 'i's' and crossed the 't's'.

There will be many DB's of 'Tainted' coins. Some will be updated, some will not be, some will be forgot, so when the coins are returned to a rightful owner there will be a probability that those DB's won't be updated and the coins will be confiscated again from the rightful owner.  

Then there will be the issue of why some coins form some businesses get returned but other coins form other businesses don't get returned. It will not be 'equally' enforced which is a problem in of itself.

And plus: Most of the people pulling off these thefts will know how to get around the set up systems to avoid the problems of them being 'tainted' so some unsuspecting third party will get shafted.

So all these systems of labeling coins 'tainted' will only hurt the greater bitcoin community.

The Intent here is good, but remember the cliché: "The road to hell is paved with good intentions."

I mostly agree with your post, but I feel that we are being fixated on non-issues here, and missing the (simple) point.

Someone breaks into my apartment and steals cash and gold, or breaks into my computer and steals private keys.  To me, these are two reasonably similar scenarios from the legal and moral point of view. They stole something of value, because they know it's valuable.

In either case, I would expect to be able to report the crime to the authorities and see reasonable efforts dedicated to these being located and returned to the rightful owner, that is me. I have a friend whose car got stolen, he reported it, and months later was contacted by the police and had his car returned to him.

If someone knowingly accepts stolen goods, I think in most countries they would be subject to prosecution, and I believe this to be a good thing. If your country falls into this category, but you don't like it, do everyone a favor and move someplace else, like to that paradise of like-minded people. Good luck.

If someone unknowingly accepts stolen goods, and these are at some later point identified as such by the authorities, again AFAIK in most functioning countries these goods will be returned to their rightful owner. Now, whoever accepted these goods unknowingly gets screwed - but not really. The asshole who stole my stuff and sold it or donated it to them will be responsible for making up to the victim(s).

So, all the yelling and kicking about "tainted" coins is missing these simple points. Tracing stolen coins is good to the extent that it might help identification of criminals, and returning of stolen goods to their rightful owners. There's really nothing more to it. It applies to cash, cars, books, and should apply to Bitcoins. I don't see the problem with it.



Title: Re: Spending and Receiving Stolen Coins.
Post by: BTC_Bear on May 20, 2012, 11:52:22 PM
Quote

I mostly agree with your post, but I feel that we are being fixated on non-issues here, and missing the (simple) point.

Someone breaks into my apartment and steals cash and gold, or breaks into my computer and steals private keys.  To me, these are two reasonably similar scenarios from the legal and moral point of view. They stole something of value, because they know it's valuable.

In either case, I would expect to be able to report the crime to the authorities and see reasonable efforts dedicated to these being located and returned to the rightful owner, that is me. I have a friend whose car got stolen, he reported it, and months later was contacted by the police and had his car returned to him.

Ok, I'll accept that. I would assume you would report it to the Police and let everybody know what is the Police Report Number is and who is the case officer that people reporting the coins can contact. What is the Police Report number in this case and who is the case officer?
Or is this just 'self help' here?


Quote
If someone knowingly accepts stolen goods, I think in most countries they would be subject to prosecution, and I believe this to be a good thing. If your country falls into this category, but you don't like it, do everyone a favor and move someplace else, like to that paradise of like-minded people. Good luck.

Ok, the owners of the faucet have committed a crime in this scenario and should be prosecuted. Or are you saying: Knowingly? If so, I can guarantee that everyone will say they didn't knowingly do it.


Quote
If someone unknowingly accepts stolen goods, and these are at some later point identified as such by the authorities, again AFAIK in most functioning countries these goods will be returned to their rightful owner. Now, whoever accepted these goods unknowingly gets screwed - but not really. The asshole who stole my stuff and sold it or donated it to them will be responsible for making up to the victim(s).

This sort of makes sense, but soon enough you are talking about the majority of the community acting to return the coins because after awhile the 'tainted' coins will be in everyones wallet.

But more importantly, this couldn't be enforce 'equally' as some will return and some won't return. Quickly creating an imbalance where people that do return are screwing themselves compared to others that don't return. Not to mention isolating the coins from the wallet takes work and isn't supported in the official client. Coin Control could help in this but this takes work to do so not only does the honest person lose his money, he also loses his time and effort value.


Quote
So, all the yelling and kicking about "tainted" coins is missing these simple points. Tracing stolen coins is good to the extent that it might help identification of criminals, and returning of stolen goods to their rightful owners. There's really nothing more to it. It applies to cash, cars, books, and should apply to Bitcoins. I don't see the problem with it.


It 'might' do that. But it is more likely that innocent victims will be labeled and possibly prosecuted for something they had nothing to do with.

BTW: Do you have 'stolen' coins in your wallet? Do you know how to answer that question and find out? Should the average John Q Public?


You will eventually run across the occasional guy that just screams to get caught but more often than not, it will be the end receiver.



Title: Re: Spending and Receiving Stolen Coins.
Post by: onelineproof on May 21, 2012, 12:06:47 AM
For me

1) Entering someone's physical house without their consent IS a crime.

2) Obtaining Bitcoin by hacking someone (just sending electrical signals on the Internet) IS NOT a crime.

The problem with making (2) a crime, is that you lose the neutrality (and free speech capabilities) of the Internet, and leads to abuse of power. All "virtual" crime can be prevented with proper IT security, so if we wanna keep the neutrality of the Internet, we should focus on prevention of virtual crime rather than punishment.

Of course, governments around the world consider both a crime, so people should be careful. Actually, pretty much anything you do can be considered suspicious criminal activity, especially just normally using Bitcoin.

Am I the only one who believes this?


Title: Re: Spending and Receiving Stolen Coins.
Post by: BTC_Bear on May 21, 2012, 12:15:14 AM
For me

1) Entering someone's physical house without their consent IS a crime.

2) Obtaining Bitcoin by hacking someone (just sending electrical signals on the Internet) IS NOT a crime.

The problem with making (2) a crime, is that you lose the neutrality (and free speech capabilities) of the Internet, which leads to abuse of power. All "virtual" crime can be prevented with proper IT security, so if we wanna keep the neutrality of the Internet, we should focus on prevention of virtual crime rather than punishment.

Of course, governments around the world consider both a crime, so people should be careful. Actually, pretty much anything you do can be considered suspicious criminal activity, especially just normally using Bitcoin.

Am I the only one who believes this?


No, Your #2 Scenario is wrong. I just believe that there should be shared responsibility for the theft but punishing everyone that could possibly come into contact with the coins is also wrong.

i.e. Goto down town Detroit in a Ferrari leave the keys in the car, the car running, the doors open, and leave for the day. The thief that steals the car is doing wrong, but the owner shares some responsibility. In fact, this is a well known insurance scam. The owner is expecting the car to get stolen. Sometime these type of thefts are prearranged.

This is very complicated and hard to prove much of anything. Lets drop the 'tainted' coins idea. Now if someone steals 18K Coins to an address and immediately sells from that address to a verified MTGOX account, then we can 'start' to talk. But, who is going to do that?  But other than that, this is a bad idea.


Title: Re: Spending and Receiving Stolen Coins.
Post by: Littleshop on May 21, 2012, 12:18:38 AM
All "virtual" crime can be prevented with proper IT security, so if we wanna keep the neutrality of the Internet, we should focus on prevention of virtual crime rather than punishment.


All physical thefts could be prevented with proper physical security.  


Title: Re: Spending and Receiving Stolen Coins.
Post by: BTC_Bear on May 21, 2012, 12:26:30 AM
All "virtual" crime can be prevented with proper IT security, so if we wanna keep the neutrality of the Internet, we should focus on prevention of virtual crime rather than punishment.


All physical thefts could be prevented with proper physical security.  

This is true for both. The level of security implemented is 'usually' a direct correlation to the value of the item(s) being protected.

So if you leave your running Ferrari in Detroit unprotected, don't be surprised it is stolen. If you leave your running Ferrari in Detroit with a Tank protecting it, you might be surprised if it is stolen.



Title: Re: Spending and Receiving Stolen Coins.
Post by: shockD on May 21, 2012, 01:31:35 AM
Its not a "blame on yourself" type of thing, since the end users could not do anything to prevent this.

They could have decided *not* to entrust their coins to a bucket shop that just had 40k BTC stolen from them through lax security practices two months ago. That would certainly have prevented it.


The self-reported hacker from the recent Bitcoinica theft has been distributing stolen coins over IRC.

If you recieve offers of stolen coins or have been sent tainted bitcoins, visit https://bitcointalk.org/index.php?topic=82581.0, for information on how to redeem them safely. As with any theft, law enforcement will likely become involved and stolen coins may subject you to criminal investigation and/or charges - please be safe!

Bitcoin-related channels will not tolerate soliciting or distributing stolen coins.

For more information regarding the situation, please visit https://bitcointalk.org/index.php?topic=81045.0

This is BS. While we're at this silliness, we can also charge Patrick with criminal negligence.


ha, +1  ;D


Title: Re: Spending and Receiving Stolen Coins.
Post by: niko on May 21, 2012, 02:35:40 AM
Quote

I mostly agree with your post, but I feel that we are being fixated on non-issues here, and missing the (simple) point.

Someone breaks into my apartment and steals cash and gold, or breaks into my computer and steals private keys.  To me, these are two reasonably similar scenarios from the legal and moral point of view. They stole something of value, because they know it's valuable.

In either case, I would expect to be able to report the crime to the authorities and see reasonable efforts dedicated to these being located and returned to the rightful owner, that is me. I have a friend whose car got stolen, he reported it, and months later was contacted by the police and had his car returned to him.

Ok, I'll accept that. I would assume you would report it to the Police and let everybody know what is the Police Report Number is and who is the case officer that people reporting the coins can contact. What is the Police Report number in this case and who is the case officer?
Or is this just 'self help' here?

Yes, if I expect you to believe my claims of that sort, I'll need to at least report the crime to the police and let you know what the details are.  And most of us are aware that falsely reporting a crime is, well, a punishable crime.

Quote
Quote
If someone knowingly accepts stolen goods, I think in most countries they would be subject to prosecution, and I believe this to be a good thing. If your country falls into this category, but you don't like it, do everyone a favor and move someplace else, like to that paradise of like-minded people. Good luck.

Ok, the owners of the faucet have committed a crime in this scenario and should be prosecuted. Or are you saying: Knowingly? If so, I can guarantee that everyone will say they didn't knowingly do it.

Yes, I was saying "knowingly."  People on IRC yesterday come to mind. They were even confirming that transactions "seemed legit" as they were receiving stolen coins. I agree that we don't know for sure these came from Bitcoinica hack, or that such hack has happened at all, but most of courts in this world would, I believe, conclude from the logs that the recepients believed the coins were stolen, and still provided their addresses.

Quote
Quote
If someone unknowingly accepts stolen goods, and these are at some later point identified as such by the authorities, again AFAIK in most functioning countries these goods will be returned to their rightful owner. Now, whoever accepted these goods unknowingly gets screwed - but not really. The asshole who stole my stuff and sold it or donated it to them will be responsible for making up to the victim(s).

This sort of makes sense, but soon enough you are talking about the majority of the community acting to return the coins because after awhile the 'tainted' coins will be in everyones wallet.

But more importantly, this couldn't be enforce 'equally' as some will return and some won't return. Quickly creating an imbalance where people that do return are screwing themselves compared to others that don't return. Not to mention isolating the coins from the wallet takes work and isn't supported in the official client. Coin Control could help in this but this takes work to do so not only does the honest person lose his money, he also loses his time and effort value.

Again yes, this is a problem. In my unqualified opinion, in most jurisdictions owners of Bitcoinica could require holders of stolen goods to return these to the rightful owner. These people can then sue the "Bitcoinica Hacker" for damages, although it probably wouldn't work: this person has not even deceived them regarding the nature of the merchandise: they knew it was stolen, and that they were not engageing in the transaction with the rightful owner.

Quote

Quote
So, all the yelling and kicking about "tainted" coins is missing these simple points. Tracing stolen coins is good to the extent that it might help identification of criminals, and returning of stolen goods to their rightful owners. There's really nothing more to it. It applies to cash, cars, books, and should apply to Bitcoins. I don't see the problem with it.


It 'might' do that. But it is more likely that innocent victims will be labeled and possibly prosecuted for something they had nothing to do with.

BTW: Do you have 'stolen' coins in your wallet? Do you know how to answer that question and find out? Should the average John Q Public?

Innocent victims will only be those who unknowingly accepted stolen coins - and perhaps they should look into a class-action lawsuit against the hacker. And no, I wouldn't know if I have some of the stolen coins in my wallet, but I do know that I wouldn't accept a donation of any kind from someone claiming to have stolen whatever is being donated.

Quote

You will eventually run across the occasional guy that just screams to get caught but more often than not, it will be the end receiver.

Again, if the courts cannot prove (usually "beyond reasonable doubt") that you knew the goods were stolen, you are not subject to criminal prosecution.


Title: Re: Spending and Receiving Stolen Coins.
Post by: onelineproof on May 21, 2012, 02:57:15 AM
All "virtual" crime can be prevented with proper IT security, so if we wanna keep the neutrality of the Internet, we should focus on prevention of virtual crime rather than punishment.


All physical thefts could be prevented with proper physical security.  

It's your choice whether you want to make your virtual belongings accessible remotely through the Internet. Anyone has the capability to simply pull the plug, and totally secure their virtual belongings from being accessed through the Internet. This is not the case with your physical belongings.


Title: Re: Spending and Receiving Stolen Coins.
Post by: Littleshop on May 21, 2012, 03:15:33 AM
All "virtual" crime can be prevented with proper IT security, so if we wanna keep the neutrality of the Internet, we should focus on prevention of virtual crime rather than punishment.


All physical thefts could be prevented with proper physical security.  

It's your choice whether you want to make your virtual belongings accessible remotely through the Internet. Anyone has the capability to simply pull the plug, and totally secure their virtual belongings from being accessed through the Internet. This is not the case with your physical belongings.
It is your choice to have glass windows and doors that open with pocket sized keys.  Anyone can have a house built without windows, in fact it should be cheaper. 


Title: Re: Spending and Receiving Stolen Coins.
Post by: BTC_Bear on May 21, 2012, 03:23:55 AM
Quote
I do know that I wouldn't accept a donation of any kind from someone claiming to have stolen whatever is being donated.


See, you might not have that option. If you have used 1 address publicly or even privately ( the private person might make it public), they 'Anyone' could just send you coins. You don't have the option of refusing to accept them. The Blockchain accepts them on your behalf.    Now, you are in a position of proving you didn't know that you weren't expecting them.

i.e. YOU have been FRAMED for something you did not do. Try telling people that someone just gave them to you.

BTW: I have at times randomly just given coins to people without their knowledge that I was going to send them coins. This can be fun. It can mess with statistics, financial reports, reporting of losses and gains. I do it to try to get people to realize some fallacies in the accounting and use of addresses. Am I harming anyone? No, I think not. I'm just giving them BTC, it's not my fault that they have used faulty methods for accounting.

To my knowledge, none of the coins have been 'tainted'.

You do realize that 1 "tainted" BTC is actually 100,000,000 Million tainted coins if separated and sent properly.


Title: Re: Spending and Receiving Stolen Coins.
Post by: organofcorti on May 21, 2012, 03:29:35 AM
I'm not supporting hacking by any means, nor do I support the idea of "tainted coins". It's not necessary. Why not trace all the coins that are known proceeds from illegal activities label them as "criminally active" and if any point the address can be traced to an individual, then assume they're guilty and let them try to prove their innocence.

I've always preferred the "assumed guilty until proven innocent" model myself. Work ok in medieval times, didn't it?

Seriously though, I do see this becoming a problem when bitcoin becomes large enough for law enforcement to take it seriously. It's not hard to trace coins. Especially with laundering, law enforcement types might just be happy to assume you're guilty even if the only thing you're guilty of is withdrawing coins from GLBSE. Making coins tainted won't stop this from occurring without agreement from not just all parties but from all bitcoin clients. And even then some would make it into the population before they're reported. And how do you report it? What level of evidence is required? What happens to the poor buggers that now find their 100btc are worthless?


Title: Re: Spending and Receiving Stolen Coins.
Post by: BTC_Bear on May 21, 2012, 03:48:35 AM
I'm not supporting hacking by any means, nor do I support the idea of "tainted coins". It's not necessary. Why not trace all the coins that are known proceeds from illegal activities label them as "criminally active" and if any point the address can be traced to an individual, then assume they're guilty and let them try to prove their innocence.

I've always preferred the "assumed guilty until proven innocent" model myself. Work ok in medieval times, didn't it?

Seriously though, I do see this becoming a problem when bitcoin becomes large enough for law enforcement to take it seriously. It's not hard to trace coins. Especially with laundering, law enforcement types might just be happy to assume you're guilty even if the only thing you're guilty of is withdrawing coins from GLBSE. Making coins tainted won't stop this from occurring without agreement from not just all parties but from all bitcoin clients. And even then some would make it into the population before they're reported. And how do you report it? What level of evidence is required? What happens to the poor buggers that now find their 100btc are worthless?

More importantly, if a system is put in place to determine coins tainted and reclaim them from vendors and exchanges, what happens when BTC are declared 'illegal' buy governments or institutions?

They now have methods of taking the coins away.

As far as making untraceable coins, it is already being done. Where are all the Casascius coins?  Where are they recorded in the Blockchain when traded? Trading of wallet.dat(s) when properly secured by non-forgable methods will be huge. You don't even need to check on the internet for the casascius coins still being there. Anyone with a copy of the blockchain can do it.

Making coins of similar or better can be done by almost anyone. So there isn't even a central supplier of the coins.

And in reality all the blockchain does is show transfer of funds, it can't show the intent or purpose of the transfer. Is it a donation? a payment for legal services? a payment for illegal services? a kickstarter? a winning raffle?

Please make this 'tainted' business go away. It will harm the community. I would think that the people trying to enforce this 'tainted' business know the flaws to it. So, I tend to start thinking on why they are supporting it. It raises questions as to the reasons for their support of it.


Title: Re: Spending and Receiving Stolen Coins.
Post by: dooglus on May 21, 2012, 03:55:51 AM
You do realize that 1 "tainted" BTC is actually 100,000,000 Million tainted coins if separated and sent properly.

Currently 1 BTC can only be split into 100 million pieces.


Title: Re: Spending and Receiving Stolen Coins.
Post by: niko on May 21, 2012, 05:30:24 AM
Please make this 'tainted' business go away. It will harm the community. I would think that the people trying to enforce this 'tainted' business know the flaws to it. So, I tend to start thinking on why they are supporting it. It raises questions as to the reasons for their support of it.

Alright, how about a change in terminology?  Forget about the "tainted" coins, it's a disturbing idea with potentially disturbing consequences. Can we agree that it's okay for individuals to invest efforts into tracing allegedly stolen coins, simply for the sake of getting closer to identifying the thief?  If some day someone decides to actually report a theft (has this even ever happened in the history of BTC?), and this is taken seriously by the law enforcement and courts, wouldn't these tools prove useful?  Are there any problems with this idea?  The way I see it, victims of BTC theft have vested interest in defeating the (pseudo)anonymity of Bitcoin. That's all.


Title: Re: Spending and Receiving Stolen Coins.
Post by: westkybitcoins on May 21, 2012, 05:38:12 AM
I can't believe there are prominent members of the Bitcoin community promoting this nonsense yet again.

This whole thing is moot, or even a can of worms too large to deal with, since we don't even know Bitcoinica had their coins stolen. So, for me, I'll start taking this talk seriously when the advocates of this "tainting" business give proof that coins were ever stolen in the first place.

But they know they can't.

Because Bitcoinica can't.

They can't prove that they themselves didn't just take the coins for whatever reason. They can't prove they aren't in collusion with the alleged thief. They can NEVER prove that they don't have the private key that the bulk of coins eventually gets sent to, to be stored away for 10 years and finally retrieved after this is long forgotten, and Bitcoin 2.0 has been developed to hide the source of a funds transfer.

That's not to say that no theft occurred. Nor is it to say that the alleged thief is guilty of no crime. And it's certainly not to say that asking money from some yokel claiming it's stolen has no moral implications.

But it's outright nonsense to take the position that anyone discovered to have bitcoins traceable back to a "theft" address needs to send them to whoever claimed they were stolen, or else suffer some consequence. If you take that position, you clearly don't realize what you're advocating.



Title: Re: Spending and Receiving Stolen Coins.
Post by: westkybitcoins on May 21, 2012, 05:46:10 AM
Please make this 'tainted' business go away. It will harm the community. I would think that the people trying to enforce this 'tainted' business know the flaws to it. So, I tend to start thinking on why they are supporting it. It raises questions as to the reasons for their support of it.

Alright, how about a change in terminology?  Forget about the "tainted" coins, it's a disturbing idea with potentially disturbing consequences. Can we agree that it's okay for individuals to invest efforts into tracing allegedly stolen coins, simply for the sake of getting closer to identifying the thief?  If some day someone decides to actually report a theft (has this even ever happened in the history of BTC?), and this is taken seriously by the law enforcement and courts, wouldn't these tools prove useful?  Are there any problems with this idea?  The way I see it, victims of BTC theft have vested interest in defeating the (pseudo)anonymity of Bitcoin. That's all.

Trace away. The blockchain is public.

But how exactly will the thief be positively identified? Is the intent to simply finger and prosecute the first person in the chain with an identifiable address who won't (or can't) give a "good" explanation as to how he wound up with "stolen" funds?


Title: Re: Spending and Receiving Stolen Coins.
Post by: amencon on May 21, 2012, 05:46:25 AM
Doesn't anybody else see the very Big problem with this "Recovering Tainted Coins" or even labeling them 'tainted'?

Yes, the flaws are so immediately and glaringly obvious you almost have to consider ulterior motives may be involved whenever this is brought up.


Title: Re: Spending and Receiving Stolen Coins.
Post by: MarketNeutral on May 21, 2012, 06:09:43 AM
Isn't the person who committed the theft (or other crime) the one who's tainted, not the bitcoins? And what is a bitcoin but a record of a transaction? What would you expect to happen if someone stole your bitcoins? What if you had a fraction of a fraction of a tainted bitcoin in your wallet, among thousands of non-tainted coins, and law enforcement confiscated your entire wallet because it contained a tainted coin? Do you expect them to understand or care about the finer distinctions of bitcoin or monetary science?


Title: Re: Spending and Receiving Stolen Coins.
Post by: organofcorti on May 21, 2012, 06:21:55 AM
You won't need to taint coins for law enforcement to do this. all they need to do is trace the blockchain.


Title: Re: Spending and Receiving Stolen Coins.
Post by: check_status on May 21, 2012, 06:34:23 AM
Where is frglr in all this drama, we need some graphs! ;D

This is the coolest shit ever (Note: Thief in Red)-----------V

http://1.bp.blogspot.com/-naxagbLRdSI/TihbllkcY3I/AAAAAAAATe8/1YuN2Gw46iQ/s1600/thief_public_key_2_steps_with_extras.png


Title: Re: Spending and Receiving Stolen Coins.
Post by: marcus_of_augustus on May 21, 2012, 06:38:22 AM
Isn't the person who committed the theft (or other crime) the one who's tainted, not the bitcoins? And what is a bitcoin but a record of a transaction? What would you expect to happen if someone stole your bitcoins? What if you had a fraction of a fraction of a tainted bitcoin in your wallet, among thousands of non-tainted coins, and law enforcement confiscated your entire wallet because it contained a tainted coin? Do you expect them to understand or care about the finer distinctions of bitcoin or monetary science?


Quite, money is an information technology, and like all technologies is amoral.

Requiring bitcoins to have a moral status is ludicrous, and belies a fundamental misunderstanding of what money is. Best leave moral judgements up to the conscience of the thieves and the God who watches over all and don't place such an impossible requirement on bitcoin.


Title: Re: Spending and Receiving Stolen Coins.
Post by: MarketNeutral on May 21, 2012, 06:44:12 AM
Isn't the person who committed the theft (or other crime) the one who's tainted, not the bitcoins? And what is a bitcoin but a record of a transaction? What would you expect to happen if someone stole your bitcoins? What if you had a fraction of a fraction of a tainted bitcoin in your wallet, among thousands of non-tainted coins, and law enforcement confiscated your entire wallet because it contained a tainted coin? Do you expect them to understand or care about the finer distinctions of bitcoin or monetary science?


Quite, money is an information technology, and like all technologies is amoral.

Requiring bitcoins to have a moral status is ludicrous, and belies a fundamental misunderstanding of what money is.
Amen to that.





Title: Re: Spending and Receiving Stolen Coins.
Post by: BTC_Bear on May 21, 2012, 06:46:53 AM
Please make this 'tainted' business go away. It will harm the community. I would think that the people trying to enforce this 'tainted' business know the flaws to it. So, I tend to start thinking on why they are supporting it. It raises questions as to the reasons for their support of it.

Alright, how about a change in terminology?  Forget about the "tainted" coins, it's a disturbing idea with potentially disturbing consequences. Can we agree that it's okay for individuals to invest efforts into tracing allegedly stolen coins, simply for the sake of getting closer to identifying the thief?  If some day someone decides to actually report a theft (has this even ever happened in the history of BTC?), and this is taken seriously by the law enforcement and courts, wouldn't these tools prove useful?  Are there any problems with this idea?  The way I see it, victims of BTC theft have vested interest in defeating the (pseudo)anonymity of Bitcoin. That's all.

Yes, I can agree it is ok to try to trace the coins. People do it for many reasons. People even do it with IRL dollars: http://www.wheresgeorge.com/ (http://www.wheresgeorge.com/) I can also certainly understand wanting to get your coins back. You know, I once left my physical wallet on a bar once. I went back to get it and low and behold, it was gone. There was about 200 dollars in it plus all my id. Do you know who I blamed the most?  ME, I was an idiot. Did I want to get it back? Yes. Did I expect to get it back? No.

But what if I saw a guy exiting the bar with the wallet in his hand? Is he the thief? Or did he just call the police and was walking outside to give it to the officers?  (Just saying that 'self help' from an un-objective person usually has bad results.)

So, yes do all the tracing and tracking that you want. Try to find out what happened and prevent it from happening again.

There was someone here that lost 100 BTC from some unknown reason from his computer. He immediately tried tracking the coins but didn't seem to care how the coins where stolen. He deleted his drive and started fresh.

This doesn't mean I don't want to stop thieves. I don't want thieves getting away with theft. There are just two methodologies to stoping them.

1) Make it easy to track and retrieve the coins from thefts. (The unintended consequences of this will destroy the whole community)

2) Make it impossible for the thieves from stealing them in the first place. (Can't see a flaw in this one and the encrypted wallet is along this line)

You know what attracts me to BTC? The fact that I have Wallets that can't be stolen to a mathematical certainty. NO, virus can get them. Absolutely, no one can get them. Utilizing a shared secret, there are wallets that I can't get unless others agree to let me get them and they can't get them unless I agree. (Defeats the Rubber Hose Decryption Methods).

The whole point is don't keep BTC in a hot wallet or even on a computer connected to the internet that you can't afford to lose. Hell, don't even keep them on a computer that can get stolen.

Bitcoin is an almost perfect safe deposit box. Stop giving people the keys to the boxes.

Plus business that require a float, could certainly have an insurance fund for loss of the float. IF it takes 18K for a float, then have 18K in a cold wallet just incase.



Title: Re: Spending and Receiving Stolen Coins.
Post by: Gabi on May 21, 2012, 12:12:43 PM
I can't believe there are prominent members of the Bitcoin community promoting this nonsense yet again.

This whole thing is moot, or even a can of worms too large to deal with, since we don't even know Bitcoinica had their coins stolen. So, for me, I'll start taking this talk seriously when the advocates of this "tainting" business give proof that coins were ever stolen in the first place.

But they know they can't.

Because Bitcoinica can't.

They can't prove that they themselves didn't just take the coins for whatever reason. They can't prove they aren't in collusion with the alleged thief. They can NEVER prove that they don't have the private key that the bulk of coins eventually gets sent to, to be stored away for 10 years and finally retrieved after this is long forgotten, and Bitcoin 2.0 has been developed to hide the source of a funds transfer.

That's not to say that no theft occurred. Nor is it to say that the alleged thief is guilty of no crime. And it's certainly not to say that asking money from some yokel claiming it's stolen has no moral implications.

But it's outright nonsense to take the position that anyone discovered to have bitcoins traceable back to a "theft" address needs to send them to whoever claimed they were stolen, or else suffer some consequence. If you take that position, you clearly don't realize what you're advocating.


+1


Title: Re: Spending and Receiving Stolen Coins.
Post by: Global BTC on May 21, 2012, 12:21:40 PM
As a seller on Bitmit, and in general, I can't do much to prevent people from paying me with "tainted" coins. I can't control who gets to buy my goods. If I do receive a "tainted" payment, what should I do? Refund it? How do I even know it's "tainted". I don't know exactly how Bitmit's escrow service works, but I fear it might "taint" everything if someone would make a payment with "tainted" coins through it.


Title: Re: Spending and Receiving Stolen Coins.
Post by: bulanula on May 21, 2012, 12:25:14 PM
As a seller on Bitmit, and in general, I can't do much to prevent people from paying me with "tainted" coins. I can't control who gets to buy my goods. If I do receive a "tainted" payment, what should I do? Refund it? How do I even know it's "tainted". I don't know exactly how Bitmit's escrow service works, but I fear it might "taint" everything if someone would make a payment with "tainted" coins through it.

Exactly. The idea of tainted coins is LUNACY for something like Bitcoin.

MtGox has got us into this shithole with "tainted" money. Well done sirs !  >:(


Title: Re: Spending and Receiving Stolen Coins.
Post by: BTC_Bear on May 21, 2012, 04:30:21 PM
As a seller on Bitmit, and in general, I can't do much to prevent people from paying me with "tainted" coins. I can't control who gets to buy my goods. If I do receive a "tainted" payment, what should I do? Refund it? How do I even know it's "tainted". I don't know exactly how Bitmit's escrow service works, but I fear it might "taint" everything if someone would make a payment with "tainted" coins through it.

Exactly. The idea of tainted coins is LUNACY for something like Bitcoin.

MtGox has got us into this shithole with "tainted" money. Well done sirs !  >:(

Yes, this is when I first came across it. MTGOX froze an account of some poor guy that bought coins off of TH and sent to MTGOX. It seems that a lot of 'tainted' coins came from TH. The unfortunate account holder at MTGOX that received them would bear the punishment if decided to be employed by an individual or company.

I think what might need to happen is to set up a 'legal attack fund' for businesses that resort to 'self help' in freezing coins, accounts, and coins.  You know why real Banks and Exchanges don't freeze and take stolen money back if they deemed something suspicious without a warrant and/or subpoena to do so?  BECAUSE they will get sued into Bankruptcy oblivion.

Maybe that would stop some of this insanity.

Would there be interest in a fund of this sort. We can head over to Legal and set one up with a lawyer.



Title: Re: Spending and Receiving Stolen Coins.
Post by: LoupGaroux on May 21, 2012, 04:32:02 PM
And the fact that Luke Jr., fascist manipulator extraordinaire, is behind the definition and the "cleansing" of this category of coin is just laughable. A developer who wants to impose his will on the world in every possible way, and especially in terms of cryptocurrency deciding what is valid and what is not? Spare me.
Your slander discredits your entire post.

Since nobody has jurisdiction over Bitcoin, I think there is no issue.
Every State has jurisdiction over Bitcoin transactions initiated or received within its borders, just like any other business done there.

It's only slander if it is not true. This "clean-up" service is another example of the need of a few, especially the delusional power-hungry do-it-my-way-or-I-will-fucking-kill-you nutburger few, forcing their vision of how the world should be on the rest. You are an accomplice to this alleged theft by creating a mechanism to "purify" these alleged stolen coins.

And let's take a moment to consider the situation here... a site that supposedly loses $200,000 in value in the blink of an eye, is now back mere weeks later claiming that he was mysteriously hacked AGAIN??? This time, "luckily" only $70,000 worth of coins vanished. And the "thief" is magnanimous enough to want to give his filthy lucre away to random souls through IRC? And look, the same clique of dominance-obsessed tools is coming out with the pre-positioned plan to make all of these tainted coins clean again, and we can just make all the loss disappear.

Bullshit.

And you are so wrong on the jurisdictional issue that it isn't even worth educating you on it. Ownership of bitcoin is not a "transaction" in a jurisdictional sense.


Title: Re: Spending and Receiving Stolen Coins.
Post by: Luke-Jr on May 21, 2012, 04:37:28 PM
And the fact that Luke Jr., fascist manipulator extraordinaire, is behind the definition and the "cleansing" of this category of coin is just laughable. A developer who wants to impose his will on the world in every possible way, and especially in terms of cryptocurrency deciding what is valid and what is not? Spare me.
Your slander discredits your entire post.
It's only slander if it is not true.
Exactly my point.

You are an accomplice to this alleged theft by creating a mechanism to "purify" these alleged stolen coins.
I didn't create a mechanism to "purify" anything. I created a straight-forward method to return the stolen coins to their rightful owner.

Since nobody has jurisdiction over Bitcoin, I think there is no issue.
Every State has jurisdiction over Bitcoin transactions initiated or received within its borders, just like any other business done there.
And you are so wrong on the jurisdictional issue that it isn't even worth educating you on it. Ownership of bitcoin is not a "transaction" in a jurisdictional sense.
It doesn't matter whether the law considers it a financial transaction or not. All that matters is that at least one end of the deal took place within the State's borders.


Title: Re: Spending and Receiving Stolen Coins.
Post by: hazek on May 21, 2012, 04:37:40 PM
I think what might need to happen is to set up a 'legal attack fund' for businesses that resort to 'self help' in freezing coins, accounts, and coins.

No need, if this is something MtGox for example stipulates in their ToS i.e. their contract they will get regulated by their customers taking their business some place else and if they don't they will get sued by their customers for damages. Problem solved.


Title: Re: Spending and Receiving Stolen Coins.
Post by: LoupGaroux on May 21, 2012, 05:05:05 PM
And the fact that Luke Jr., fascist manipulator extraordinaire, is behind the definition and the "cleansing" of this category of coin is just laughable. A developer who wants to impose his will on the world in every possible way, and especially in terms of cryptocurrency deciding what is valid and what is not? Spare me.
Your slander discredits your entire post.
It's only slander if it is not true.
Exactly my point.

You are an accomplice to this alleged theft by creating a mechanism to "purify" these alleged stolen coins.
I didn't create a mechanism to "purify" anything. I created a straight-forward method to return the stolen coins to their rightful owner.

Since nobody has jurisdiction over Bitcoin, I think there is no issue.
Every State has jurisdiction over Bitcoin transactions initiated or received within its borders, just like any other business done there.
And you are so wrong on the jurisdictional issue that it isn't even worth educating you on it. Ownership of bitcoin is not a "transaction" in a jurisdictional sense.
It doesn't matter whether the law considers it a financial transaction or not. All that matters is that at least one end of the deal took place within the State's borders.

As it was mine.

Go ahead and illuminate the class then... how exactly did you determine that the coins were stolen, what was the process you took to determine the rightful owner, and explain how having an anonymous "thief" send coins to random people , who then send them to YOU, who claim to be sending them on to somebody else is A) straight-forward; and B) anything other than a mechanism to change the reputation created by external parties concerning these coins.

Ownership, and the transfer of ownership of the results of a hashing algorithm do not constitute a "transaction". Regardless of what popular opinion might say about the means of that transfer, the only "crime" here is the removal of data without permission. If that even happened. There is no documentation that Bitcoinica did not transfer these funds out himself, no proof that you are not the "thief" who has been giving coins to a group of confederates through IRC, no proof that a non-authorized transfer happened at all. Other than the word of a limited circle of insiders who stand to make a considerable amount of gain from manipulating these coins. There is a semi-load of reasonable doubt surrounding this issue, and the very fact of who the players are crying hack for the second time in weeks, and the reputation of the white hats rushing to establish the restitution mechanism adds more to the question of who is zooming who in this matter.

Frankly, given your history of abuse of power, obsessive-compulsive behavior, and irrational attacks I wouldn't trust you to put the coins into the slot in an automatic car wash, much less be the steward of integrity for a quarter of a million dollars worth of funny money. This whole thing reeks of a select few insiders scamming another group of naive players.

And that, Sir, is not slander, that is healthy skepticism and very public doubt concerning your integrity, and the veracity of this story.



Title: Re: Spending and Receiving Stolen Coins.
Post by: Luke-Jr on May 21, 2012, 05:22:36 PM
And that, Sir, is not slander, that is healthy skepticism and very public doubt concerning your integrity, and the veracity of this story.
No, everything you accuse me of therein is a lie. This degree of slander should really get you banned, IMO.


Title: Re: Spending and Receiving Stolen Coins.
Post by: Gabi on May 21, 2012, 05:34:55 PM
Yes, censoring the opponent is always a good idea.


Title: Re: Spending and Receiving Stolen Coins.
Post by: BTC_Bear on May 21, 2012, 05:38:57 PM
I think what might need to happen is to set up a 'legal attack fund' for businesses that resort to 'self help' in freezing coins, accounts, and coins.

No need, if this is something MtGox for example stipulates in their ToS i.e. their contract they will get regulated by their customers taking their business some place else and if they don't they will get sued by their customers for damages. Problem solved.

MTGOX as far as I know take an appropriate response in their Terms of Use. Reception of tainted coins 'might' kick off a AML Identity request. They as far as I know, do not require you to identify where you received coins (nor should you tell them, you should only tell properly Identified LE Officers if you wish). You may be required to identify. The problem there is that you could send coins to everybody at MTGOX forcing the AML requirements on everybody. That might not be good for business. Especially when people are often required to identify multiple times.

I mean seriously MTGOX is requiring tougher rules than Banks. They might as well just become one and get it over with. I can open an account here with a DL and SSN. Some 'illegals' can open accounts here with just a consulate ID and not even be a citizen. Pretty soon, Americans will be using foreign banks overseas for ease of use. Unfortunately many of them won't take US Citizens because of the insane requirements being imposed on them by the FED.

I was more inclined to mean 'other' businesses that use the tactic of freezing and re-claiming coins deemed 'tainted'.

You are right in that the free market should take care of this but the free market also includes the use of lawyers to speed up decisions. :)

Plus: Think of the unemployment rate and GDP. Imagine all the people that need to be hired and money needing to be spent when lawyers get involved. :P

That alone might keep organizations from trying 'self help' methods and just wait for LE Inquiries before taking actions.

What happened to the days when Businesses required a warrant to take actions rather than just 'you follow our rules or else' threats?

We need to get back on track to appropriate rules and stop this craziness. Lets start with Lawyers and Lobbyists before we bring out the guns to take the country back. :P

You know what is sad? The 'terrorists' won on 9/11. They successfully have taken away our Liberties by forcing us to pass the Patriot Act and allowing our government to do anything they want under the guise of National Security.

Prying back that power that was given to them is going to be hard. Bitcoin is a start, to prove the uselessness of the rules.


Title: Re: Spending and Receiving Stolen Coins.
Post by: hazek on May 21, 2012, 05:50:27 PM
From MtGox ToS:

Quote
Members represent and warrant that they are the legitimate owners and are allowed to use all monetary sums and Bitcoins deposited on their Account and that the Transactions being carried out do not infringe the rights of any third party or applicable laws. Members who are not consumers ("Business Members") will indemnify Mt. Gox for any and all damages suffered and all liability actions brought against Mt. Gox for infringement of third party rights or violation of applicable laws.

To the extent permitted by law, Mt. Gox will not be held liable for any damages, loss of profit, loss of revenue, loss of business, loss of opportunity, loss of data, indirect or consequential loss unless the loss suffered is caused by a breach of these Terms by Mt. Gox.

In the case of fraud, Mt. Gox will report all necessary information, including names, addresses and all other requested information, to the relevant authorities dealing with fraud and breaches of the law. Members recognize that their account may be frozen at any time at the request of any competent authority investigating a fraud or any other illegal activity.

TERMINATION

Members acknowledge and agree that their Account may be suspended until they provide Mt. Gox with documents evidencing their identity and/or any other information that Mt. Gox deems necessary to secure the Accounts, the Transactions and/or the Platform.

Additionally, we may, in appropriate circumstances and at our discretion, suspend or terminate Accounts of Members for any reason, including without limitation: (1) attempts to gain unauthorized access to the Site or another Member’s account or providing assistance to others' attempting to do so, (2) overcoming software security features limiting use of or protecting any content, (3) usage of the Platform to perform illegal activities such as money laundering, terrorism financing or other criminal activities, (4) violations of these Terms, (5) failure to pay or fraudulent payment for Transactions, (6) unexpected operational difficulties, or (7) requests by law enforcement or other government agencies.

We also reserve the right to cancel unconfirmed Accounts or Accounts that have been inactive for a period of 6 months or more, or to modify or discontinue our Site or Platform. Members agree that Mt. Gox will not be liable to them or to any third party for termination of their Account or access to the Site.


Basically if you use MtGox you agree that they can do to your account or/and money what ever the hell they want.


Title: Re: Spending and Receiving Stolen Coins.
Post by: BTC_Bear on May 21, 2012, 05:54:12 PM
From MtGox ToS:

Quote
Members represent and warrant that they are the legitimate owners and are allowed to use all monetary sums and Bitcoins deposited on their Account and that the Transactions being carried out do not infringe the rights of any third party or applicable laws. Members who are not consumers ("Business Members") will indemnify Mt. Gox for any and all damages suffered and all liability actions brought against Mt. Gox for infringement of third party rights or violation of applicable laws.

To the extent permitted by law, Mt. Gox will not be held liable for any damages, loss of profit, loss of revenue, loss of business, loss of opportunity, loss of data, indirect or consequential loss unless the loss suffered is caused by a breach of these Terms by Mt. Gox.

In the case of fraud, Mt. Gox will report all necessary information, including names, addresses and all other requested information, to the relevant authorities dealing with fraud and breaches of the law. Members recognize that their account may be frozen at any time at the request of any competent authority investigating a fraud or any other illegal activity.

TERMINATION

Members acknowledge and agree that their Account may be suspended until they provide Mt. Gox with documents evidencing their identity and/or any other information that Mt. Gox deems necessary to secure the Accounts, the Transactions and/or the Platform.

Additionally, we may, in appropriate circumstances and at our discretion, suspend or terminate Accounts of Members for any reason, including without limitation: (1) attempts to gain unauthorized access to the Site or another Member’s account or providing assistance to others' attempting to do so, (2) overcoming software security features limiting use of or protecting any content, (3) usage of the Platform to perform illegal activities such as money laundering, terrorism financing or other criminal activities, (4) violations of these Terms, (5) failure to pay or fraudulent payment for Transactions, (6) unexpected operational difficulties, or (7) requests by law enforcement or other government agencies.

We also reserve the right to cancel unconfirmed Accounts or Accounts that have been inactive for a period of 6 months or more, or to modify or discontinue our Site or Platform. Members agree that Mt. Gox will not be liable to them or to any third party for termination of their Account or access to the Site.


Basically if you use MtGox you agree that they can do to your account or/and money what ever the hell they want.

LOL, yea most TOS have a 'whatever' we decide clause.

You ever see the sign at a Valet parking place that they are not responsible for etc..., etc...?

IT'S a LIE.

You can say one thing, but the courts decide if it is actually what you intended.

Otherwise their would be no need of civil courts. You could just point to TOS and say didn't you read the sign.


Title: Re: Spending and Receiving Stolen Coins.
Post by: tysat on May 21, 2012, 06:13:15 PM
And that, Sir, is not slander, that is healthy skepticism and very public doubt concerning your integrity, and the veracity of this story.
No, everything you accuse me of therein is a lie. This degree of slander should really get you banned, IMO.

I wouldn't call it slander, more of a strong opinion.  You need to chill out.


Title: Re: Spending and Receiving Stolen Coins.
Post by: LoupGaroux on May 21, 2012, 08:26:43 PM
And that, Sir, is not slander, that is healthy skepticism and very public doubt concerning your integrity, and the veracity of this story.
No, everything you accuse me of therein is a lie. This degree of slander should really get you banned, IMO.

If you understood what "slander" is, instead of trying to use big words to express your indignation that somebody might actually question if the emperor is clothed or not, you would know that what I have stated is opinion, and a very public statement of a possible alternate background for what is going on in this circumstance. That is not, and never would be considered, slander. Your histrionics to the contrary, you have established a very significant body of work in this community, much of it laudable and to be commended, but tainted with dramatically poor impulse control. I will not divert this topic with a history of your embarrassing moments, but you are one of the very last people that should be casting any stones, your history is filthy with unethical behavior, diversion of others hashing power to serve your own agenda, and a diametric opposition to the spirit of open source when discussing evolution of the basis of this community.

And, you might want to check the TOS for this message forum before you begin to spout off about banning people who disagree with you, or dare to challenge your delusions of godhood. But then I guess "opinions" are just like assholes, everybody has one, and some are more full of crap than others.


Title: Re: Spending and Receiving Stolen Coins.
Post by: bulanula on May 24, 2012, 08:00:33 PM
And that, Sir, is not slander, that is healthy skepticism and very public doubt concerning your integrity, and the veracity of this story.
No, everything you accuse me of therein is a lie. This degree of slander should really get you banned, IMO.

If you understood what "slander" is, instead of trying to use big words to express your indignation that somebody might actually question if the emperor is clothed or not, you would know that what I have stated is opinion, and a very public statement of a possible alternate background for what is going on in this circumstance. That is not, and never would be considered, slander. Your histrionics to the contrary, you have established a very significant body of work in this community, much of it laudable and to be commended, but tainted with dramatically poor impulse control. I will not divert this topic with a history of your embarrassing moments, but you are one of the very last people that should be casting any stones, your history is filthy with unethical behavior, diversion of others hashing power to serve your own agenda, and a diametric opposition to the spirit of open source when discussing evolution of the basis of this community.

And, you might want to check the TOS for this message forum before you begin to spout off about banning people who disagree with you, or dare to challenge your delusions of godhood. But then I guess "opinions" are just like assholes, everybody has one, and some are more full of crap than others.

What do you expect from a religious nutjob ::)

He once said LTC is a plot to take BTC from the fools. What if BTC is a plot to take USD from the fools  :D

However, him killing CLC was a top job in my book and I respect him for killing that scam and BTC development.


Title: Re: Spending and Receiving Stolen Coins.
Post by: galambo on May 27, 2012, 03:35:40 PM
How about a system where each bitcoin is valued based on how much you personally trust each person (wallet) that has ever held it? If everybody did this, that would make us a lot more discerning about who we dealt with, wouldn't it?

I'd like to see a situation where Bernie Bitoff may steal all the bitcoins, but they would not buy even one pair of alpaca socks.

Additionally, just because we have an anonymous service, doesn't mean we should primarily use it anonymously. The best members of this community reveal exactly who they are. The power of an anonymity service is that at any moment you could "go dark." However operating in the dark is a lot like being in an underwater submarine versus one that has been surfaced. Everything you do becomes a little more difficult.


Title: Re: Spending and Receiving Stolen Coins.
Post by: DeathAndTaxes on May 27, 2012, 03:51:58 PM
How about a system where each bitcoin is valued based on how much you personally trust each person (wallet) that has ever held it? If everybody did this, that would make us a lot more discerning about who we dealt with, wouldn't it?

http://en.wikipedia.org/wiki/Fungibility

It would be the death of Bitcoin (or any currency).


Title: Re: Spending and Receiving Stolen Coins.
Post by: galambo on May 27, 2012, 04:10:26 PM
How about a system where each bitcoin is valued based on how much you personally trust each person (wallet) that has ever held it? If everybody did this, that would make us a lot more discerning about who we dealt with, wouldn't it?

http://en.wikipedia.org/wiki/Fungibility

It would be the death of Bitcoin (or any currency).

The currency would still be fungible for the set of all honest participants that only dealt with other honest people. :)


Title: Re: Spending and Receiving Stolen Coins.
Post by: westkybitcoins on May 27, 2012, 07:06:11 PM
How about a system where each bitcoin is valued based on how much you personally trust each person (wallet) that has ever held it? If everybody did this, that would make us a lot more discerning about who we dealt with, wouldn't it?

http://en.wikipedia.org/wiki/Fungibility

It would be the death of Bitcoin (or any currency).

The currency would still be fungible for the set of all honest participants that only dealt with other honest people. :)

No, it wouldn't (just think about it for a minute.)

That's the whole problem with these sorts of proposals.


Title: Re: Spending and Receiving Stolen Coins.
Post by: payb.tc on May 27, 2012, 10:46:42 PM
How about a system where each bitcoin is valued based on how much you personally trust each person (wallet) that has ever held it? If everybody did this, that would make us a lot more discerning about who we dealt with, wouldn't it?

http://en.wikipedia.org/wiki/Fungibility

It would be the death of Bitcoin (or any currency).

The currency would still be fungible for the set of all honest participants that only dealt with other honest people. :)

but there are honest crooks that are totally honest about their crookedness.