Tracking down stolen Bitcoins

[kooler1]

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?

[aplistir]

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...

[Coin-Keeper]

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.

[lionelho]

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.

[btcton]

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.

[carlfebz2]

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?

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.

[Xynerise]

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

[gabbie2010]

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?

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.

[armandoz]

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.

[Dvach]

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.

[cr1776]

its very hard to track down. perhaps this is one of the down side of Bitcoin

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.

[suzanne5223]

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.

[kooler1]

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?

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.

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.

[Skyborn]

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?

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.

[Oceat]

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?

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.

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.

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.

[JonesMark]

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?

[cryptoboiloi]

its very hard to track down. perhaps this is one of the down side of Bitcoin

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.

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.

[kooler1]

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?

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.

[spotlessgases]

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.

[Alexcross1075]

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