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Author Topic: MtGox: The ultimate bitcoin mixer/laundry?  (Read 3361 times)
mb300sd
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August 05, 2011, 08:07:37 AM
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I've seen a couple separate bitcoin mixer services, but aren't we missing the ultimate one? I'm pretty sure MtGox dosen't send you back the same bitcoins you deposit when you withdraw, so can't one obtain untraceable coins by simply make an anonymous account, depositing and withdrawing the coins? (in randomized amounts of course) It certainly has far more volume than any of the mixer services out there.

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Fjordbit
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August 05, 2011, 08:19:33 AM
 #2

I've seen a couple separate bitcoin mixer services, but aren't we missing the ultimate one? I'm pretty sure MtGox dosen't send you back the same bitcoins you deposit when you withdraw, so can't one obtain untraceable coins by simply make an anonymous account, depositing and withdrawing the coins? (in randomized amounts of course) It certainly has far more volume than any of the mixer services out there.

There's no guarantee that MtGox doesn't keep a record of where the bitcoins came from and where they went to, and in fact it is in their best interest to keep these records.

So, if I were to steal 100,000 btc from you, and then deposit into mt gox, and then withdraw it to another account, police could probably still get that the coins went into account x and then they went to bitcoin address y. If I then paid for something to be delivered to my home with bitcoin address y, they could contact that seller and find out where I live.

Presumably a mixer would not keep these records.
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August 05, 2011, 08:23:31 AM
 #3

I've seen a couple separate bitcoin mixer services, but aren't we missing the ultimate one? I'm pretty sure MtGox dosen't send you back the same bitcoins you deposit when you withdraw, so can't one obtain untraceable coins by simply make an anonymous account, depositing and withdrawing the coins? (in randomized amounts of course) It certainly has far more volume than any of the mixer services out there.

You might get back different coins but it's similar to depositing and then withdrawing cash through your bank - the record of your deposits and withdrawals is still going to exist even if you withdraw different amounts to different accounts.

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
Ekaros
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August 05, 2011, 08:25:41 AM
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I've seen a couple separate bitcoin mixer services, but aren't we missing the ultimate one? I'm pretty sure MtGox dosen't send you back the same bitcoins you deposit when you withdraw, so can't one obtain untraceable coins by simply make an anonymous account, depositing and withdrawing the coins? (in randomized amounts of course) It certainly has far more volume than any of the mixer services out there.

There's no guarantee that MtGox doesn't keep a record of where the bitcoins came from and where they went to, and in fact it is in their best interest to keep these records.

So, if I were to steal 100,000 btc from you, and then deposit into mt gox, and then withdraw it to another account, police could probably still get that the coins went into account x and then they went to bitcoin address y. If I then paid for something to be delivered to my home with bitcoin address y, they could contact that seller and find out where I live.

Presumably a mixer would not keep these records.

Why they shouldn't keep records? They should atleast know:
1. From where the coins/money came.
2. Where the coins/money went.
Both connected to account.
For other purpouses also the trades which happened on the account...

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August 05, 2011, 09:12:31 AM
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Why they shouldn't keep records?

It might be a regulatory requirement to keep every info imaginable to hand it to the authorities if a judge orders them so. If they fail to disclose the info they might be forced to close operations in that country.

So as a user i expect them to keep every info about me they can. (Balances/Btc in /out, names, bank accounts..) This is something i can live with.

I just hope they secure the info properly  f.ex. when doing financial audits ... Undecided
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August 05, 2011, 09:19:05 AM
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This reminds me of some movie I saw where some fat kid puts a jellybean up his nose then puts it back in the bag then shakes it up so that no one else will ask for his jellybeans.


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August 05, 2011, 11:22:31 AM
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You may sell Bitcoins on TradeHill, transfer USD, and buy Bitcoins on MtGox. Laundered.

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CD-RW
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August 05, 2011, 04:46:30 PM
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This reminds me of some movie I saw where some fat kid puts a jellybean up his nose then puts it back in the bag then shakes it up so that no one else will ask for his jellybeans.


But with bitcoins they could see who made what transfer! Cheesy
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August 05, 2011, 05:17:42 PM
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This reminds me of some movie I saw where some fat kid puts a jellybean up his nose then puts it back in the bag then shakes it up so that no one else will ask for his jellybeans.


But with bitcoins they could see who made what transfer that a transfer was made. Cheesy

Fixed =)
indio007
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August 05, 2011, 05:24:40 PM
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Anyone that can't successfully launder bitcoins has a seriously lack of imagination.

It's already hard enough to prove who was using any particular computer at any particular time without an eyewitness or confession.
cypherdoc
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August 05, 2011, 05:27:23 PM
 #11

I've seen a couple separate bitcoin mixer services, but aren't we missing the ultimate one? I'm pretty sure MtGox dosen't send you back the same bitcoins you deposit when you withdraw, so can't one obtain untraceable coins by simply make an anonymous account, depositing and withdrawing the coins? (in randomized amounts of course) It certainly has far more volume than any of the mixer services out there.

There's no guarantee that MtGox doesn't keep a record of where the bitcoins came from and where they went to, and in fact it is in their best interest to keep these records.

So, if I were to steal 100,000 btc from you, and then deposit into mt gox, and then withdraw it to another account, police could probably still get that the coins went into account x and then they went to bitcoin address y. If I then paid for something to be delivered to my home with bitcoin address y, they could contact that seller and find out where I live.

Presumably a mixer would not keep these records.

how would they know the sellers identity?
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August 05, 2011, 05:42:15 PM
 #12

buy name coins with bitcoins.. turn around and buy bitcoins with your namecoins... tumbled

mooo for rent
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August 06, 2011, 02:33:44 AM
 #13

It used to be that MyBitcoin was the best way to launder your coins, since if they weren't replying to user's support requests, they sure as heck wouldn't reply to law enforcement.

Jack of Diamonds
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August 06, 2011, 03:08:17 AM
 #14

A mixer is like a public proxy. It's a flawed idea as long as records are kept.
Records will reveal the true IP address, records will reveal who the bitcoins originate from.

To really be anonymous, you need to operate a mixer on the same principle as the TOR network (or access it via Tor)
This is incredibly difficult and lenghty with bitcoins because obfuscation requires the coins to be verified by the network 6 times after every transfer. With zero priority this can take over an hour. A packet on the TOR network can go through multiple nodes in a second.

Another problem is pattern analysis, the blockchain contains every single transaction in existence. You can't erase the record in any way & even if you split transactions to different sizes, rotate them through multiple accounts, they can be ultimately traced.
The coins can be *always* linked back to you unless you deal without an exchange (like selling or buying on Silk Road).

When you attempt cashing out via an exchange you make yourself vulnerable. Exchanges keep records on the coins you send in and cash out. This is how careless e-gold scammers were caught years ago.
The only way to be truly anonymous is by cashing out via person-to-person transfers by cash-in-mail (P.O. Box, poste restante) or in a physical location.

(short reading: If you want true anonymity, don't use an exchanger that keeps logs on you)

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ctoon6
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August 06, 2011, 04:11:26 AM
 #15

actually

1. use tor
2. bit laundry on tor hidden service
3. everyone sends coins to the laundry
4. laundry sends back 99% of the coins, keeps 1% for fee
5. profit

you only have to trust that the laundry does not keep logs, and does not go out of their way to catch criminals.

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August 06, 2011, 04:27:10 AM
 #16

actually

1. use tor
2. bit laundry on tor hidden service
3. everyone sends coins to the laundry
4. laundry sends back 99% of the coins, keeps 1% for fee
5. profit

you only have to trust that the laundry does not keep logs, and does not go out of their way to catch criminals.
You also have to make sure that the funds aren't sent back to you in a predictable manner, either.

ctoon6
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August 06, 2011, 04:32:09 AM
 #17

actually

1. use tor
2. bit laundry on tor hidden service
3. everyone sends coins to the laundry
4. laundry sends back 99% of the coins, keeps 1% for fee
5. profit

you only have to trust that the laundry does not keep logs, and does not go out of their way to catch criminals.
You also have to make sure that the funds aren't sent back to you in a predictable manner, either.

All they need to do is give everyone the same public key to send the coins to, and tell the laundry service what public key to send them back to. this would obviously be a brand new key.

there could also be different levels of security that cost more. level 1 would just dump many people coins in the same address and send them back once enough have been collected. level 2 could collect a bunch together and send them into an exchange for a day or so and get them back. level 3 could send them to and from many services. obviously every time this is done it gets more costly. again, all records would have to be erased after each process.

Sukrim
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August 06, 2011, 03:29:51 PM
 #18

All you need is:

1 "pool address" to collect BTC (weekly or until a treshhold is reached).
A fixed (big) number of random fresh new adresses (like 100 or so).

Once "the day" is here or the treshhold has been reached, create a sendmany transaction that sends either 100, 50, 10, 5, 1 or 0.5 BTC to each address (everything below 0.5 BTC is kept), all addresses can be used but don't have to be used.
The system could try to output an interesting pattern (like using as many transactions as possible or using as few as possible, or using as many 10 BTC transactions as possible...).

Also you might want a helper program, that keeps the BTC being resent to this service for a few rounds (always generating new keys).
In fact this would even be good for the operator, as the system gets better and better, the higher the money is in the pot each time, so he might not even charge fees for this (just look at the payout adresses from the last round(s) and don't charge anything for BTC coming from there)

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