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Author Topic: What if you bought some of those stolen Mt Gox Bitcoins?  (Read 8852 times)
Edward50
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February 28, 2014, 11:42:50 PM
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Sorry if this was discussed, but in USA if you buy stolen property and you are caught with it you have to return it to the original owner at your loss.

Now, lets say someone did steal the Mt Gox. Bitcoins, and then you bought some of them unknowingly.

If they could trace back through the blockchain that those bitcoins were indeed stolen Mt. Gox. coins, wouldn't they be able to take them back from you?




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February 28, 2014, 11:45:24 PM
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How?  BTC transactions are irreversible.

Edward50
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February 28, 2014, 11:47:07 PM
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How?  BTC transactions are irreversible.

Not really if law enforcement gets involved and you have to go to court. Technically you can be sued if you can convince a jury.

Not really a good thing to be honest if this did happen.

Empty your mind, be formless, shapeless — like water. Now you put water in a cup, it becomes the cup; You put water into a bottle it becomes the bottle; You put it in a teapot it becomes the teapot. Now water can flow or it can crash. Be water, my friend.
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March 01, 2014, 12:02:20 AM
 #4

Sorry if this was discussed, but in USA if you buy stolen property and you are caught with it you have to return it to the original owner at your loss.

Now, lets say someone did steal the Mt Gox. Bitcoins, and then you bought some of them unknowingly.

If they could trace back through the blockchain that those bitcoins were indeed stolen Mt. Gox. coins, wouldn't they be able to take them back from you?

I doubt that this would happen.  The Bitcoins would not have the same address.  They are not the same Bitcoins.

Maybe Bitcoins obtained straight from a stolen source are one thing, but Bitcoins that have transferred MANY times with differing amounts over a year?  What basis would that be?  They do not do that with cash or currency. 

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March 01, 2014, 12:24:24 AM
 #5

Sorry if this was discussed, but in USA if you buy stolen property and you are caught with it you have to return it to the original owner at your loss.

Now, lets say someone did steal the Mt Gox. Bitcoins, and then you bought some of them unknowingly.

If they could trace back through the blockchain that those bitcoins were indeed stolen Mt. Gox. coins, wouldn't they be able to take them back from you?

I doubt that this would happen.  The Bitcoins would not have the same address.  They are not the same Bitcoins.

Maybe Bitcoins obtained straight from a stolen source are one thing, but Bitcoins that have transferred MANY times with differing amounts over a year?  What basis would that be?  They do not do that with cash or currency.  

Naive bullshit or intentionally misleading spin. The chain of ownership is recorded in the blockchain.

https://bitcointalk.org/index.php?topic=491181.msg5436510#msg5436510

https://bitcointalk.org/index.php?topic=491181.msg5415520#msg5415520

https://bitcointalk.org/index.php?topic=491181.0

For those who are rationalizing away the chain of ownership (I explained upthread) due to that the lack of physical nature to Bitcoin, you don't have any chance of winning that argument. If it wasn't owned, it wouldn't have value that can be exchanged. Even if we are trading fungible tokens in a pool, the tokens are still owned. Cripes, are you guys totally ingenuous or ignorant.

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March 01, 2014, 12:33:29 AM
 #6

Ok so you know the address of a stolen bitcoin, now tell me how you plan to identify the person who owns the address?

There is no anonymity in Bitcoin against powerful entities:

https://bitcointalk.org/index.php?topic=439357.msg5355485#msg5355485

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March 01, 2014, 01:48:40 AM
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Ok so you know the address of a stolen bitcoin, now tell me how you plan to identify the person who owns the address?
There is no anonymity in Bitcoin against powerful entities:

There might not be any anonymity,  but that still doesn't help you prove that a specified person owns the private key associated with a newly generated Bitcoin address,  whose only transaction so far was to receive some coins.

Unless the person shows you the private/public key; for all you know,  the Bitcoin address was a DUMMY address, and the coins are essentially destroyed --- since there is no known public/private key pair in existence  that would have the address that the coins were transferred to.

BTC: 1FbuJxZCeJUqrP7EpUkgMKWAmAA1M8gUBd
LTC: LbvomgbwKnqk47mWzALCDEoV8ydjxYYYpF
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March 01, 2014, 02:10:08 AM
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Ok so you know the address of a stolen bitcoin, now tell me how you plan to identify the person who owns the address?
There is no anonymity in Bitcoin against powerful entities:

There might not be any anonymity,  but that still doesn't help you prove that a specified person owns the private key associated with a newly generated Bitcoin address,  whose only transaction so far was to receive some coins.

Unless the person shows you the private/public key; for all you know,  the Bitcoin address was a DUMMY address, and the coins are essentially destroyed --- since there is no known public/private key pair in existence  that would have the address that the coins were transferred to.

Incorrect. You had to transmit your public key to the sender who sent you BTC.

Edit: actually the public key is hashed and not public until you spend. But unless it was sent encrypted to the sender, this could be intercepted. And frankly most of the time you are not obtaining coins from such a covert sender. When you buy on an exchange, the authorities can get this information.

Also once you spend your coins then your public key is revealed. If you can't spend your coins without revealing your identity, then what is your point?

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AnonyMint
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March 01, 2014, 03:15:06 AM
 #9

Ok so you know the address of a stolen bitcoin, now tell me how you plan to identify the person who owns the address?
There is no anonymity in Bitcoin against powerful entities:

There might not be any anonymity,  but that still doesn't help you prove that a specified person owns the private key associated with a newly generated Bitcoin address,  whose only transaction so far was to receive some coins.

Unless the person shows you the private/public key; for all you know,  the Bitcoin address was a DUMMY address, and the coins are essentially destroyed --- since there is no known public/private key pair in existence  that would have the address that the coins were transferred to.

Incorrect. You had to transmit your public key to the sender who sent you BTC.

Edit: actually the public key is hashed and not public until you spend. But unless it was sent encrypted to the sender, this could be intercepted. And frankly most of the time you are not obtaining coins from such a covert sender. When you buy on an exchange, the authorities can get this information.

Also once you spend your coins then your public key is revealed. If you can't spend your coins without revealing your identity, then what is your point?

Actually you are correct that I could display my public key in some way that doesn't connect it to my IP, e.g. at software download website, and the sender could send me coin and since the public key is hashed on the blockchain, no one would know I received it except for the sender and myself.

However, as I pointed out, as soon as you spend it, your public key is revealed.

And when you send you spend transaction, that is when your IP address can be correlated.

Also note my understanding is that a decentralized mixer such as CoinJoin would have to reveal your public key to all the parties since they all need to sign. And a centralized mixer would know your public key, so if that service was a honeypot, then it is revealed in that way.

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March 01, 2014, 05:08:39 AM
 #10

There is hundreds of years of case law that already settled this question.

In most jurisdictions (Switzerland being an exception) if you purchase stolen unique goods, such as a painting or a sculpture, even if you didn't know that it was stollen and you acted in good faith, the legal title for these goods remains with the original owner. 

This does not apply, however, to non-unique or fungible items like dollar bills or bitcoins.  If your restaurant receives payment in bills that were stolen from a bank robbery, then these bills remain your property provided you received them in good faith (i.e., you weren't in on some sort of money laundering operation).  This applies even if the serial numbers of the stolen bills are known.  If you think about it, a cash economy couldn't function any other way!   

Another note is that, even after a few transactions, you can't really refer to "this bitcoin" or "that bitcoin".   Let's say Alice unknowingly receives a stollen 1 BTC coin.  She then sends that 1 BTC to Bob using the Blockchain.info SharedCoin feature.  Shared coin merges, for example, ten 1 BTC outputs (all from different people) into 1 transaction, and then send those bitcoins out to, say, 10 different addresses.  There is no longer a blockchain record that shows that Alice's address sent 1 BTC to Bob's address.  Instead, Bob's bitcoin has 10% taint with the bitcoin that Alice sent.  Now, if Bob sends 5 mBTC from that coin to pay for a coffee, and then the merchant moves all customer payments for the week to a new address (and thus likely into a single, say, 5 BTC coin) this new coin shares 0.01% taint with the original stolen coin that Alice unknowingly received from MtGox.   

Pretty soon, the taint has diffused throughout the economy!

As an experiment: go to blockchain.info and look-up one of your bitcoin addresses and select the "taint analysis" option. I bet there is taint linking it to hundreds or thousands of other addresses.  There's a good chance that your address has 0.0023% taint of a coin used for something illegal.  Just like a few of the twenty-dollar bills that you'll use this year had at some point in the past been used to pay for marijuana.   

In conclusion:
- If you receive stollen coins in good faith, they become your legal property. 
- After several transactions, a 100% stollen coins get fuzzed-out across numerous coins, each sharing a small amount of taint with the original. 


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March 01, 2014, 09:08:03 AM
 #11

There is hundreds of years of case law that already settled this question.

In most jurisdictions (Switzerland being an exception) if you purchase stolen unique goods, such as a painting or a sculpture, even if you didn't know that it was stollen and you acted in good faith, the legal title for these goods remains with the original owner.  

This does not apply, however, to non-unique or fungible items like dollar bills or bitcoins.  If your restaurant receives payment in bills that were stolen from a bank robbery, then these bills remain your property provided you received them in good faith (i.e., you weren't in on some sort of money laundering operation).  This applies even if the serial numbers of the stolen bills are known.  If you think about it, a cash economy couldn't function any other way!  

Bullshit. Bitcoins are not legal tender.


https://bitcointalk.org/index.php?topic=491181.msg5416272#msg5416272

What makes you so certain that the nemo dat rule will be applied to bitcoin? Isn't it at least plausible for a court to treat it similar to legal tender or other negotiable instruments?

Why should the government give a competitive currency (that threatens the power of the government) all its power over legal tender?

Duh.

As well most governments have already ruled it is not legal tender and they have been issuing warnings about using the crypto-currencies.

As well it is quite clear from precedents, e.g. gold and silver are fungible money too yet they are treated as property by all national governments in the world today.


Another note is that, even after a few transactions, you can't really refer to "this bitcoin" or "that bitcoin".   Let's say Alice unknowingly receives a stollen 1 BTC coin.  She then sends that 1 BTC to Bob using the Blockchain.info SharedCoin feature.  Shared coin merges, for example, ten 1 BTC outputs (all from different people) into 1 transaction, and then send those bitcoins out to, say, 10 different addresses.  There is no longer a blockchain record that shows that Alice's address sent 1 BTC to Bob's address.  Instead, Bob's bitcoin has 10% taint with the bitcoin that Alice sent.  Now, if Bob sends 5 mBTC from that coin to pay for a coffee, and then the merchant moves all customer payments for the week to a new address (and thus likely into a single, say, 5 BTC coin) this new coin shares 0.01% taint with the original stolen coin that Alice unknowingly received from MtGox.  

Pretty soon, the taint has diffused throughout the economy!

Exactly! It spreads to everyone. And a coin can be stolen more than once, so the percentage of taint in the system is always increasing, and NEVER DECREASING!

As an experiment: go to blockchain.info and look-up one of your bitcoin addresses and select the "taint analysis" option. I bet there is taint linking it to hundreds or thousands of other addresses.  There's a good chance that your address has 0.0023% taint of a coin used for something illegal.  Just like a few of the twenty-dollar bills that you'll use this year had at some point in the past been used to pay for marijuana.    

And in fact tainted money can be confiscated!

http://www.nestmann.com/civil-forfeiture-of-cash-it-could-happen-to-you

In conclusion:
- If you receive stollen coins in good faith, they become your legal property.  
- After several transactions, a 100% stollen coins get fuzzed-out across numerous coins, each sharing a small amount of taint with the original.  

Logic fail!

Are you determined to live in Alice in Wonderland fantasies and be in denial about the potential risks.

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March 01, 2014, 09:25:38 AM
 #12

...


AnonyMint, in one sentence, is this your position?

Since taint tends to diffuse, spreading out to more and more coins over time, and since at least some coins were involved in a crime at some point in the past, AnonyMint claims that most bitcoins in circulation would become subject to confiscation.

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March 01, 2014, 09:35:14 AM
 #13

...


AnonyMint, in one sentence, is this your position?

Since taint tends to diffuse, spreading out to more and more coins over time, and since at least some coins were involved in a crime at some point in the past, AnonyMint claims that most bitcoins in circulation would become subject to confiscation.

Add that the 21 million (final total of) coins can be stolen over and over, thus the percentage of theft on the tainted coins is ALWAYS INCREASING AND NEVER DECREASING. At least not until coins start being confiscated and returned to their owners.

And over time the 21 million coins absolute limit is always decreasing too due to lost keys.

And not only theft. Also criminal activities using coins also makes them subject to confiscation.

http://www.nestmann.com/civil-forfeiture-of-cash-it-could-happen-to-you

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March 01, 2014, 10:04:51 AM
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WOW... the lack of common sense is truly a sight to behold!

Quite simply, this WOULDN'T happen with cash - so therefore wouldn't happen with Bitcoin

....I don't see the confusion
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March 01, 2014, 10:07:09 AM
 #15

The stolen coins would be sold all over the world and it would be very difficult to trace down that where have his coins gone. it's not possible to get the stolen coins back.
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March 01, 2014, 10:10:13 AM
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WOW... the lack of common sense is truly a sight to behold!

Quite simply, this WOULDN'T happen with cash - so therefore wouldn't happen with Bitcoin

....I don't see the confusion

Cash = legal tender.

Gold != legal tender

Gold can be confiscated if you buy it and it was stolen property.

Can't you read my prior post, or are you fucking blind?

Legal tender is given this protection, because the government provides consumer protection against theft, e.g. FDIC insurance, tracking down serial numbers on bills, chargebacks on credit cards, etc.. It is their racket, and so they give it is special status.

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March 01, 2014, 10:11:33 AM
 #17

The stolen coins would be sold all over the world and it would be very difficult to trace down that where have his coins gone. it's not possible to get the stolen coins back.

Technically ignorant people should STFU. The chain of ownership is in the blockchain. This has already been debated. Go read the links I provided to the other thread on this same topic.

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March 01, 2014, 10:20:59 AM
 #18

...


AnonyMint, in one sentence, is this your position?

Since taint tends to diffuse, spreading out to more and more coins over time, and since at least some coins were involved in a crime at some point in the past, AnonyMint claims that most bitcoins in circulation would become subject to confiscation.

Add that the 21 million (final total of) coins can be stolen over and over, thus the percentage of theft on the tainted coins is ALWAYS INCREASING AND NEVER DECREASING. At least not until coins start being confiscated and returned to their owners.

How would you propose they return coins to the victim of a theft if his coins are now distributed as taint across 24,000 other coins?  Say Sally has 1 BTC that has 0.002% taint of a coin that was stolen from Sam.  Would they correlate Sally's human identity with her 1 BTC wallet, find her somehow, and then ask for 0.002% x 1 BTC = 2000 Satoshi's back?  And then they would find the other 23,999 coins and do the same?  And what if Sally was also the victim of a theft at some prior point in time, but the Coin Rescuers hadn't found her coins yet.  She might be upset that you're taking some of her coins, when she was a victim herself.  Do you think you could add an appeal process so that victims waiting for their settlements could defer having a portion of their coins removed?

What would you propose they do if later it's found that this 2000 Satoshi restitution paid to Sam was actually tainted by 10% with a crime from many years ago that was just recently solved?  Would they than go to the Sam, to whom they just return 2000 Satoshis, and confiscate 200 Satoshi's to give to Joanne?

Are you imagining that they automate this in some way?  Are do you imagine that a significant portion of the population is involved with splitting a few pennies off of coins to provide restitution to victims?  You could really cut down on unemployment if you did this all manually.  And since you have people tracking other people down for 2000 Satoshi's  = 1 penny (due to diffused taint), and this process probably costs more than 1 penny, how would you propose we pay for this?  Maybe the Coin Rescuers could also control mining and most of the nodes, and then they can just issue as many bitcoins are necessary to pay their workers to rescue all the pieces of the stolen coins distributed as pennies across the economy.  So you've achieved near 100% employment and everybody can get their stolen coins back.  

And who are they by the way?  And do you think they are watching you through your webcam right now?

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March 01, 2014, 11:03:31 AM
 #19

hmmm the gox problem.

0) figure out the exact amount of missing coins and figure out where they went
1) verify which balance include part of the stolen ones
2) Contact persons in possession by finding  actual Identities without infringing on rights....for which said agency is opening it'self wide for a class privacy lawsuit
3) prove that they actually are in my possession
4) gain access to my wallet
5) try to break my password, 215 characters
6) separate stolen from legitimate inputs
7) figure out which gox customer exactly owned those particular coins
Cool manage to distribute each and every coin to its owner

quite frankly without trying to confuse each other with technical stuff....it's a non starter.

this all assumes i am in the U.S, now, in my country the U.S has no power, no say in legal matters and definitely not on illegitimate currency. So, what if 45% of the coins are in countries that do not care what Americans do? This exercise (theoretically) would only be useful if it were a national crypto currrecy, not one that is spread over the world, and certainly not in one whose tx are irreversible.
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March 01, 2014, 11:40:58 AM
 #20

Wait, I'll admit I'm late to this game, but it seems to me that a block chain can be corrected (superseded) after it is created.  Is there a point where that cannot happen?

It seems to me that a theft, if proven, could cause the chain to be reinstated without the theft.
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