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Author Topic: [2018-03-20] Some of Bitcoin’s Earliest Adopters Find it Difficult to ‘Cash Out’  (Read 76 times)
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March 20, 2018, 08:30:43 AM
 #1

The price of BTC had increased in value significantly over the years, reaching $19,600 at its highest peak – and the exchange rate rests at $8,500 today. This is a stark contrast to just over a year ago when the digital currency’s value was under $1,000 per coin. Since the fiat value has increased so much it has made some early investors very rich. Moreover, there’s one group of early adopters that no one likes to talk about — darknet market vendors.

Wealthy Darknet Vendors Have Issues ‘Cashing Out’

Whether people like to talk about it or not, darknet markets (DNM) exist, and some people believe vices are not crimes. Some well-known bitcoiners have made millions gathering the currency in the early days but there are also anonymous millionaires that people will never know. DNM operators and vendors are among bitcoin’s earliest adopters since the inception of the first modern DNM the Silk Road launched in 2011. Estimates detail that the Silk Road took in $30-45 million annually with 146,946 buyers in 2013 and 3,877 vendors. When the Silk Road collapsed in October of 2013 many of those vendors moved on to newer DNMs and many of them still exist today.

According to a report by Vice author David Gilbert, lots of DNM vendors have obtained massive quantities of bitcoins by selling their wares and deeds online but cashing them out into fiat isn’t so easy. Gilbert details that many of the super-rich vendors have even contacted Swiss banks trying to exit into fiat in a quiet manner. Some have even offered bank employees 10 percent to get them “out of the situation.” Further, some DNM vendors from marketplaces like the Wall Street Market, the Point market, and others detail how they get their bitcoin’s back into the fiat system.

Modus Operandi

One method is mixing the coins and selling them locally to someone who is willing to pay cash for the cryptocurrency. Another procedure is purchasing prepaid cards with the BTC that offer credits and gift redemptions to a wide range of stores. A funny technique is using the payment service Western Union as one vendor sends his coins to platforms that “automatically transfer bitcoin to Western Union accounts.” Lastly, however, if a person decides to exchange their cryptos for fiat, the trick is to do it slowly, as one vendor remarks the process can be “slow and tedious.” The report goes on to quote another vendor who explains that roughly only 20 percent of these people have come up with “innovative ways of cashing out — 80 percent have no idea how to do it.”

Put Yourself Through School

DNM vendors have been making a lot of money for quite some time as news.Bitcoin.com reported back in 2016 the day-to-day affairs of everyday darknet merchants. One guy ran a one-man operation making $200-300 thousand USD per year and operations security (Opsec) was his top priority. Another DNM merchant made $150K annually and put himself through grad school selling LSD, DMT, ketamine, cocaine, and MDMA. The DNM merchant detailed that many vendors used their funds for schooling at universities so they could one day go ‘legitimate.’

It’s safe to say DNM vendors are some of the earliest adopters but many of them have to use rather unique methods of utilizing the funds. Additionally, these types of individuals and groups were some of the first people to give bitcoin its value proposition and utility as DNM vendors are quite literally crypto’s first merchants — and they still are very loyal. However, the evolution of blockchain surveillance companies has become a threat to DNM vendors and many of them may have to try different techniques to avoid the law.

https://news.bitcoin.com/some-of-bitcoins-earliest-adopters-find-it-difficult-to-cash-out/

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March 20, 2018, 11:55:50 AM
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Dirty money are always dirty money,even if they are crypto-money. Grin
Most of those darknet market vendors believed that btc is 100% anonymous.Now,they will have to face the truth and pay the price.Those people create a bad reputation for bitcoin and I hope that some day,the authorities will catch most of them and confiscate all their bitcoins.
I`m sure that the darknet markets will be the main reason for a worldwide crypto ban.We have to support the government officials ,in their struggle against drug dealers and scammers,who accept btc payments.

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March 20, 2018, 01:34:42 PM
 #3

This is normal because these early adopters have SURELY earn HUGE bucks in Bitcoin alone. With this fast-increasing value as compared to traditional fiat currencies, these investors would lose all opportunity they see when they finally opt out in Bitcoin investments. When you know you are earning well out of something and so suddenly, circumstances change because of the inevitable like government laws, rules and regulations, you would of course be feeling so anxious about having to let go of something that have enabled you to earn a good living.
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March 20, 2018, 07:06:44 PM
 #4

This is the problem with unaccounted money: if the source is tainted, then the returns are also tainted. The primary reason for the increase in wealth of these darknet vendors is the increase in price of bitcoin. When realized, this is legitimate capital gains. But because the source cannot be explained, these vendors cannot convert their money through overground channels.


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March 20, 2018, 07:25:06 PM
 #5

Exchanges as Yobit serve as cleaning point. If anyone is using that exchange, and withdraws Bitcoin or any other top tier altcoin, at least accept the fact that you may withdraw tainted coins. In the same way that applied to BTC-E as well, and likely to a few more exchanges. People deposit their 'clean' coins, where these coins end up in the reserve of the exchange operators, and when the time is there for people to withdraw their coins again, they'll be sent the tainted coins. I am sure that the deep web markets that have been infiltrated by autorities, provide links to people in this market that can be easily traced and raided, even while they themselves have never been involved in any illegal practices. It's just the withdrawal from whatever shitcoin exchange that brought them in that position.

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March 21, 2018, 01:01:07 AM
 #6

Exchanges as Yobit serve as cleaning point. If anyone is using that exchange, and withdraws Bitcoin or any other top tier altcoin, at least accept the fact that you may withdraw tainted coins. In the same way that applied to BTC-E as well, and likely to a few more exchanges.

I am not exactly sure how credible the sources were of the articles I read, but the main point was that BTC-E has been used as a temporary 'stash house' to launder coins originating from the MtGox theft. If that's true, and your statement that certain exchanges do function as 'cleaning point' is true, then I too may have been withdrawing these MtGox coins, and even still have some of them in my cold wallets. It may not be entirely relevant, but just like Yobit is, there are more of these shady exchanges somehow all having Russian connections. It's something I noticed and for that reason for me personally, can't really be seen as coincidence anymore. It might be a whole network of exchanges being maintained by the same group of people....
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March 21, 2018, 01:31:28 AM
 #7

With difficulty comes opportunity. I reckon setting up a mixing service might still be profitable hehehe.

There are also other ways to launder your bitcoins, like trade them for Monero and then using websites like https://xmr.to/ or https://localmonero.co/ to convert them back again to bitcoins if that is what you really want.

But if I was a darknet vendor, I would protect my privacy by holding them all in Monero and start using that to sell drugs. Cashing out might still not be easy but the layer of protection it gives is worth it for a drug dealer.

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March 21, 2018, 12:45:58 PM
 #8

Interesting article would merit, if i could  Grin

I find it hard to believe that 80% of these vendors have no idea how to cash out, they were intelligent and ambitious and tech-driven enough to earn this money and they cant find a way to get it out? Does not seem legit.

I believe that it is slow regards the vast amounts that they have but it can be done.

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March 21, 2018, 03:09:31 PM
 #9

Interesting article would merit, if i could  Grin

I find it hard to believe that 80% of these vendors have no idea how to cash out, they were intelligent and ambitious and tech-driven enough to earn this money and they cant find a way to get it out? Does not seem legit.

I believe that it is slow regards the vast amounts that they have but it can be done.

They are probably just trying to be cautious because the authorities are on the look out for any suspicious activities - and cashing out huge amounts of money is very suspicious or alarming. The name of bitcoin is tainted with the dirty bussiness of the dark web. Even with the many ways to cash out anonymously, it’s still very dangerous because the authorities may still be on the lookout for darkweb users and they surely have tons of btc to cash out now that the price has gone up.
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