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Author Topic: Binance's partnership with Chainanalysis to detect "Dirty" Coins..  (Read 199 times)
AdolfinWolf
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December 04, 2018, 07:11:50 PM
Last edit: December 04, 2018, 07:35:36 PM by AdolfinWolf
 #1

So i recently discovered that Binance partnered with https://www.chainalysis.com/ to detect transactions that could be coming from people whom launder money, fund terrorist organisations et al.

Does anyone know what the impact of this will be/has been (Has anyone been affected yet?)? Will coins send from a mixer to binance now require KYC (since they're untraceable = will probably get flagged??)?
Seems like the entire nature/reason of why crypto exists in the first place is silently being destroyed.  Undecided

I've never send coins from any mixer to binance, but i would be really reluctant to do so now, especially with unverified accounts...? The stuff that Polo/Bittrex pulled is still fresh in my mind.
This to me, seems like quite a big deal, but i have barely heard anything about this, or what it actually implies for the average user that's taking decent care of his privacy/trying to preserve anonimity...  Huh



(https://www.coindesk.com/crypto-exchange-binance-adds-compliance-tools-from-chainalysis)

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December 04, 2018, 07:28:58 PM
Merited by leowonderful (1), shield132 (1)
 #2

Seems like the entire nature of why crypto exists in the first place is silently being destroyed.  Undecided

It seems to me that a great portion of the people that have crypto or are interested in crypto don't care much about the ideals at it's core.
Look how many people are looking forward to more and more regulation, and adoption within the finance industry, just so the price will go up.

We think we can "mix" coins but do we really know if it works? How do we know that they, chainalysis, MI5, or the NSA are more advanced in their TX tracking abilities than mixers can obfuscate?

If companies are going to start considering all mixed coins to be dirty they are really going to screw a lot of people and likely themselves.
Am I supposed to ask to see the inputs of any transaction to be sent to me before I can accept it so I can trace the inputs to see if they are "dirty"? How am I supposed to know where my coins came from? That is far beyond my capabilities other than some taint analysis tools I have seen. 

If this becomes a problem maybe their would be a way for us as the crypto community to protest it by mixing ALL of our coins. If we ALL did it wouldn't it defeat their purpose?
Maybe we could start a holiday of sorts where one day a year we all mix our coins to give them a big FU.
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December 04, 2018, 07:35:58 PM
 #3

If I had any merit left, I'd give it to both of you.

You make good points. Unfortunately, the ethos of crypto will be diluted when large financial institutions start tightening the grip on KYC. They are using "funding terrorism" as a tactic to justify their continued control of each citizen's financial resources.  It's inevitable that we will soon have to document the chain of BTC from the pint they were minted, or most likely some arbitrary date. A new industry will pop up and chart the chain of ownership, which will give the "man" even more resolution on what we have, where we got it, and where we spend it. Bummer, yes, but that's the world we live in. Honestly, I don't like it, but understand that in the great scheme of things our citizenry probably needs it. (Make me nauseous to say that)

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December 04, 2018, 07:56:46 PM
 #4

I don't like it, but understand that in the great scheme of things our citizenry probably needs it. (Make me nauseous to say that)

Why?
Why would anyone "need" bitcoin at all if it lost its usefulness for its intended purpose? I just posted..

People don't "need" bitcoin to pay for dinners and houses, or to make a profit.

People "need" Bitcoin to resist tyranny and oppression as it is an unstoppable tool of liberty.

If they regulate BTC into some fiat-esque system where coins with untraceable history are worthless, they can blacklist your coins, to where they CAN stop you from using your coins as you wish, then what would be the "need" use case of BTC?

Need to castrate BTC so dumb money stops getting scammed, to stop scary "money laundering? I think not.
But sadly too many people would sign right up for it if they think they will be able to make a few bucks..

I think it will be interesting to see soon if they have any success blacklisting coins. I don't think they will succeed against obfuscation tactics but I don't think we know their true capabilities and don't think they will blow the cover off of their advanced tracing tactics for peanuts.
In the future I predict their will be another Snowden moment where we find out that they have been able to trace your transactions through common tactics for the last X years and it will just be another cat&mouse game with both sides trying to stay one step ahead of the other.
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December 04, 2018, 07:59:27 PM
 #5

Nah, people will be fine with using Bitcoin mixers, but it may be another story for the coins coming from address tagged tainted coins, or well know addresses. Now, what about if Binance is then forced to report to the proper authority, and what will be included as "dirty" coins.

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December 04, 2018, 10:12:22 PM
 #6


I've never send coins from any mixer to binance, but i would be really reluctant to do so now, especially with unverified accounts...? The stuff that Polo/Bittrex pulled is still fresh in my mind.

Big deal or not on some users but i agree that this stuff is the reason why Polo/Bittrex do able to fall into the rankings because of that KYC thingy but on the other hand
this do only applicable on some scenarios not totally imposing strict compliance. As long we do able to deposit non tainted coins i dont see a reason for us to be worried about on this matter.

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December 04, 2018, 10:25:55 PM
Merited by leowonderful (1), milewilda (1)
 #7

As long we do able to deposit non tainted coins i dont see a reason for us to be worried about on this matter.

99% of the people don't even know where their coins came from, so if their deposits get flagged to be undergoing some sort of internal investigation, it will catch them by surprise. Another thing is that they can also falsely flag your deposit, and then months later tell you that it's all fine.

I'm already at a point at which I'm worried that literally every deposit of mine can be frozen on platforms I'm not verified at (i.e. Bitmex), so I'm not far away from saying goodbye to platforms I'm not verified at, nor plan to be in the future. People like me will likely stop using these platforms, the rest of the delusional users will keep doing what they have been doing for ages, which is continue being a noob till you can't walk any further.

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December 04, 2018, 11:20:23 PM
 #8

I wouldn't worry about it because it's a very silly idea and the more they try, the harder it will become for them in future. Also if we see some statistics, as far as I remember once bitmixer owner said that there was 1 million coin mixed in a year by using his website, there were and still are popular mixers too, so what do they want to tell us? They won't accept 9 coin from 10? Theybar every illogical + we have monero if they haven't heared about that.

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December 04, 2018, 11:58:34 PM
 #9

I'd say verification and 'dirt' are two different things.

In this day and age not being verified in a place that offers it is leaving a time bomb in your knickers. You never know when they'll spring it on you. And places with no KYC will all buckle eventually and you'll never know when.

As for coins from a mixer, I will guess that there are mixers out there which are slack and will let slip something detectable. If it's detectable dodginess then you'll have some explaining to do. If it's properly mixed there's nothing to object to other than it being from a mixer and there are no mentions of that being a problem - yet.

Every single bitcoin in circulation will have traces of something nefarious. They'll be looking for overt monstrousness such as coins direct from hacks, or addresses posted in relation to crimes.

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December 04, 2018, 11:58:44 PM
 #10

Nah, people will be fine with using Bitcoin mixers
Initially, sure, but the whole point is that we don't know how advanced chainalysis is when it comes to linking taint.

They are very likely test using a wide variety of mixers, all to look for miniscule details allowing them to know how to recognize funds coming from a mixer. If they know that, they could force an exchange to put these funds on hold.

I of course hope they aren't far developed in that aspect, but won't rule it out either. They probably will safe their best tools for whales and ignore smaller fishes, because they don't gain anything by exposing their capabilities.

 
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December 05, 2018, 01:47:55 PM
 #11

Nah, people will be fine with using Bitcoin mixers
They are very likely test using a wide variety of mixers, all to look for miniscule details allowing them to know how to recognize funds coming from a mixer. If they know that, they could force an exchange to put these funds on hold.
I think it's quite easy to recognize which funds come from mixers. Especially with Chipmixer, where transactions go from adress A -> B,C,D,E in denominations of 0.001, 0.004, 0.032 etc. and then get claimed.


If they're not acting on transactions from mixers, then their entire cooperation is basically a farce, and really nothing more than just a windows-dressing measure... Anyone who would have slightly "dirty" coins would just simply use a mixer?

Every single bitcoin in circulation will have traces of something nefarious. They'll be looking for overt monstrousness such as coins direct from hacks, or addresses posted in relation to crimes.
Which will probably result in a lot of false positives. Anyone who knows that he received hacked funds/dirty coins will probably sweep them through a mixer, whereas people who think the coins are "Clean" won't...?

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December 05, 2018, 01:57:55 PM
 #12

Don't be surprised by this kind of news or information, this will be the common thing in Crypto, the main idea behind Cryptocurrency is dead already, Governments already won, I have said it before Bitcoin will be regulated and while this might be happy news from some, it is really bad news for people that have a true understanding of what really that means. Look around you, everything related to Crypto and blockchain is in the process to be regulated, this is not a new news anymore, there is even some DEX exchange switched to hyper exchange to be regulated.

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December 05, 2018, 02:02:20 PM
 #13

Don't be surprised by this kind of news or information, this will be the common thing in Crypto, the main idea behind Cryptocurrency is dead already, Governments already won, I have said it before Bitcoin will be regulated and while this might be happy news from some, it is really bad news for people that have a true understanding of what really that means.

Bitcoin can't be regulated. Many of the things surrounding it such as services that ease its usage and allow it to interact with other forms of money can be. That'll be enough for them for now.

The real challenge will be if it ever largely discards fiat and becomes a closed loop. Then they'll have a real task on their hands. At that point they may start trying to 'licence' miners and developers will need to come up with something a bit more nimble.

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December 05, 2018, 04:27:15 PM
 #14

Nah, people will be fine with using Bitcoin mixers
Initially, sure, but the whole point is that we don't know how advanced chainalysis is when it comes to linking taint.

They are very likely test using a wide variety of mixers, all to look for miniscule details allowing them to know how to recognize funds coming from a mixer. If they know that, they could force an exchange to put these funds on hold.

I of course hope they aren't far developed in that aspect, but won't rule it out either. They probably will safe their best tools for whales and ignore smaller fishes, because they don't gain anything by exposing their capabilities.

Yes, I don't deny this part. And who knows if an entity is also working on this domain with a more advanced tech for blockchain analysis.
But while I posted I was considering that BTC mixers will also improve with time and experience. It's a game like the cops and thieves. Sure some mixers won't even improve at all, making users at risk, but for a decent and reputable mixer, I am confident.

It's all about to be "proactive"

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December 05, 2018, 05:49:26 PM
 #15

Next service I can foresee from all this will be to pay for full chainalysis certified clean coins. Might even make it an industry standard to have your coins certifiably clean and then partner with miners to charge people premium for newly minted coins. I want them to try it because it wouldn't work either. They'd have to get the rest of the users to comply with their censorship amd deliberately attack Bitcoin fungibility.

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December 07, 2018, 12:12:05 AM
 #16

Next service I can foresee from all this will be to pay for full chainalysis certified clean coins. Might even make it an industry standard to have your coins certifiably clean and then partner with miners to charge people premium for newly minted coins. I want them to try it because it wouldn't work either. They'd have to get the rest of the users to comply with their censorship amd deliberately attack Bitcoin fungibility.

too much hassle, why not simply use coins that are fungible by design? XMR, XSPEC, Onion, so many possibilities

Truth is the new hatespeech.
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December 07, 2018, 12:32:56 AM
 #17

too much hassle, why not simply use coins that are fungible by design? XMR, XSPEC, Onion, so many possibilities

Because they're going to be driven out of exchanges that want to stay in business. That's already happening in Japan and South Korea. I expect it to spread elsewhere. They can lock down on exchanges. They can't do it to coins like that. That's probably enough for now.

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December 07, 2018, 10:30:06 AM
 #18

too much hassle, why not simply use coins that are fungible by design? XMR, XSPEC, Onion, so many possibilities

Because they're going to be driven out of exchanges that want to stay in business. That's already happening in Japan and South Korea. I expect it to spread elsewhere. They can lock down on exchanges. They can't do it to coins like that. That's probably enough for now.

Exactly. I actually like Monero (to be fair, don't know or use any other types in the same class) and yes, they serve the specific purpose that only now Bitcoin development is starting to focus on after "solving" the scalability "problem", but if you're happy just using them in their niche markets and don't need a currency that's accepted everywhere, that's fine.

But I still really would like to use Bitcoin, for everything I do.

Japan's effective prohibition on privacy coins (and that's what it is, you can argue it's just exchanges leaving them out to stay compliant but where else are merchants going to liquidate when even bisq Monero volumes are struggling?) could result in others copying, just as they did with Bitcoin. Then you're faced with the same problem.

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