[Blacklist] of unreliable, 'taint proclaiming' Bitcoin services / exchanges

[n0nce]

After many discussions in Announcing Wasabi Wallet 2.0 and elsewhere, I came to the conclusion that we need a community-curated summarized list of untrustworthy services that I call 'taint-proclaiming services'.

These services ignore one of Bitcoin's fundamental values of being fungible, usable and acceptable everywhere and anywhere. They each come up with their own arbitrary set of taint rules by which they allow themselves not only to deny your Bitcoins, but also to steal them from you and / or directly share your data with government agencies. Some people may not be aware of this, some may accept it for the convenience of the service in question, and others may prefer to stop using these services.

I'd like to encourage everyone who had such an experience or a reliable news article about something like this happening, to share it and I'll add it to the list.

|	Paxos Exchange	|	Rejects mixed funds	|	Source: https://news.bitcoin.com/another-crypto-exchange-discourages-the-use-of-bitcoin-mixing-services/	|
|	Binance Exchange	|	Rejects mixed funds (Wasabi)	|	Source: https://news.bitcoin.com/as-fatf-regulations-galvanize-crypto-mixing-applications-are-targeted/	|
|	Coinbase Exchange	|	Closes accounts that deposit mixed funds	|	[need source]	|
|	Wasabi 2.0 Mixer	|	Blacklists UTXOs by working with Chainalysis	|	Source: https://blog.wasabiwallet.io/zksnacks-blacklisting-update/	|
|	BestChange.com	|	Supports 'clean and dirty Bitcoins'	|	Source: https://bitcointalk.org/index.php?topic=3309245.msg60225919#msg60225919	|
|	Gemini Exchange	|	No funds from gambling; 'Attempts to conceal the origin are not allowed'	|	Source: https://bitcointalk.org/index.php?topic=5398316	|
|	Betcoin Casino	|	'Strict Anti-Coin Mixing Policy' ( 8.8 )	|	Source: https://www.betcoin.ag/support/betcoinag-terms-service	|
|	Playbetr Casino	|	'Strict Anti-Coin Mixing Policy' ( 8.13 )	|	Source: https://www.playbetr.com/terms	|
|	Openchange instant exchange	|	Mixed funds labeled as 'stolen'	|	Source: https://bitcointalk.org/index.php?topic=5404704	|
|	[banned mixer] Mixer	|	'Coins with dark history are never let in.'	|	Source: https://bitcointalk.org/index.php?topic=5458437.msg62501094#msg62501094	|

I remember there are many more such cases, but can't find web articles about them right now, so I'd appreciate any additions.

PSA: Keep in mind, any centralized exchange may at any point in time start closing and freezing accounts, rejecting UTXOs and sharing your information. This is merely a blacklist, not a whitelist; exchanges not on this list aren't guaranteed to be 'safe and reliable'.

If anyone is wondering: why is this even important?; make sure to read through this post and think it through.

[1] 'this is a severe threat to Bitcoin'
[2] 'Nobody would reject a dollar bill because it has previously been used in a crime'

I've seen several posts lately from people willing to treat Bitcoin as non-fungible because they believe some coins are "tainted".
I'd say this is a severe threat to Bitcoin, and I wouldn't be surprised if governments use this because they can't stop Bitcoin in any other way. If people believe Bitcoin is "tainted", they won't accept it anymore. "We" should really inform people not to fall for this.
Nobody would reject a dollar bill because it has previously been used in a crime, despite the fact that 85 to 90% contains traces of cocaine. Claiming Bitcoin isn't fungible is just plain stupid.

Here's a few examples:

Today netex24 exchanger sent me tainted btc.

What's that? Are you saying Bitcoin isn't fungible?

service which i wanted to top up blocked my account.

The solution is simple: don't use services that tell you your Bitcoin is different than another Bitcoin.

I don’t tell that i will return btc. We can trace it. We can mark it.

Bitcoin is fungible. Stop trying to convince people it's not, and stop using services that treat Bitcoin as if it's not fungible.

Lmao you have no glue what are you talking about. Please stop spam in my tread if you don’t know anything about chainanalys, thx

This site explains very well what it's all about:

Coin validation proposed to offer as a service to trace coins and try to give you a rating about how the history of the coin from your point of view and to offer that as a service to businesses. I think this could be quite dangerous because it goes back to that 17th century court case where now you could receive a coin that is perfectly valid at the time that you receive it, but a few weeks later a crime is uncovered and now your coin is tainted. So if this coin validation service is advicing many of the merchants where you would want to spend your coin at, it's tainted and now the merchant would refuse to accept your coin. That's a strange experience for you; you're holding a coin that you might have to sell at a discount to get rid of it. The aggregate effect of this might create a run on the bitcoin price. So it reopens this long-set legal principle that currency or currency units are all equal.

I can't stress enough how important this is!

[DaveF]

Gemini does not close accounts as far as I know because of 'taint'. They have closed accounts for many other reasons, some of which are semi-legit and others that are 100% BS and many of them arbitrary but I have never seen a reliable report about them closing for taint.

Fail any form of KYC --> Closed
Don't give them info they request --> Closed
Something changes in your life and you don't tell them --> Closed
Log in from a restricted location even with an account from another part of the world --> Closed
What looks to be moving money without a reason to their security even if you are not --> Closed
And so on.

Not defending them, but there are 1000s of the above type reports, no reports that I trust of 'they did not like my BTC'

-Dave

[dkbit98]

I remember there are many more such cases, but can't find web articles about them right now, so I'd appreciate any additions.

Any exchange that works with Chainalysis and similar companies can freeze customer accounts if their tracking software marks their addresses as ''tainted''.
You are missing Binance exchange from that list, and they are freezing accounts for sure for various reasons if they think something is suspicious.
I remember reading before how many Colombian users accounts got frozen, and others got flagged for risk management and anti-money laundering:
https://insidebitcoins.com/news/binance-sued-by-colombian-users-for-frozen-accounts
https://www.coindesk.com/tech/2021/05/12/so-many-locked-out-binance-users-say-their-accounts-have-been-frozen-for-months/

PS
Don't forget that fake dex exchanges (like Uniswap) can also freeze your funds.
Paxful P2P exchange is the first P2P exchange that works with Chainalysis, so you know what that means.

[o_e_l_e_o]

Don't give them info they request --> Closed

But what prompts them to request additional info? Some sort of blockchain analysis which flags up something you did as "suspicious".

What looks to be moving money without a reason to their security even if you are not --> Closed

Is this not based on blockchain analysis though? You did something with your coins that they didn't like? Is that not taint?


There was another similar thread about this just a few weeks ago here: Black List of crypto exchanges! (BANS and confiscation)
Although it was discussing exchanges sanctioning Russian users, I'll quote myself from that thread here, because it is very applicable:

Here is the list of exchanges which can ban you and confiscate your funds at any moment:

• All centralized exchanges

[PrimeNumber7]

Any centralized exchange is going to be accountable to the government where it operates. Western governments are going to expect exchanges to follow AML laws to prevent money laundering.

If you don’t like this, as oelio points out, your only real option is to not use a centralized exchange.

The information that those in the list in the OP are using is ultimately public information. Anyone can look at the same information and come to their own conclusions.

[DaveF]

Don't give them info they request --> Closed

But what prompts them to request additional info? Some sort of blockchain analysis which flags up something you did as "suspicious".

All hearsay but it seems to be as you go above certain levels of trading they want more KYC. But from what people are at least admitting to it seems to be based on amounts, not any particular coins. We can't know the truth of what Gemini is thinking or if what they are posting is true so......

Is this not based on blockchain analysis though? You did something with your coins that they didn't like? Is that not taint?

What I have seen several complaints about is people move fiat in and don't trade and then pull the fiat out. And then they close your account.
Once again, posted on the net so you can never know the true story about amounts and other things. But I can see that triggering something.

-Dave

[n0nce]

Gemini does not close accounts as far as I know because of 'taint'. They have closed accounts for many other reasons, some of which are semi-legit and others that are 100% BS and many of them arbitrary but I have never seen a reliable report about them closing for taint.

Alright, thanks for the feedback, I'll remove it for now, then!

I remember there are many more such cases, but can't find web articles about them right now, so I'd appreciate any additions.

Any exchange that works with Chainalysis and similar companies can freeze customer accounts if their tracking software marks their addresses as ''tainted''.

I understand that, but I'd like to compile a list of only 'verified' services / i.e. ones where there's a clear precedent.

Here is the list of exchanges which can ban you and confiscate your funds at any moment:

• All centralized exchanges

They can, sure. But I'd like to know and make visible to everyone which are either openly against fungibility / mixing and condone it officially or where many users have reported such issues in the past.

[bitmover]

Here is the list of exchanges which can ban you and confiscate your funds at any moment:

• All centralized exchanges

They can, sure. But I'd like to know and make visible to everyone which are either openly against fungibility / mixing and condone it officially or where many users have reported such issues in the past.

Even so, it's worth to mention any centralized exchange are likely reject certain address/coin.

At any time, for any reason, we may have a problem with any centralized exchange.

This is why we should always send our coins in batches to exchanges.
I have made some big sells in binance last years when we reached ath. I was afraid they could reflect my funds, so I send in 3-4 transactions. Only after the fiat withdrawal I made the next btc transaction.

No problems, and there were some mixed funds and some funds from casinos.

But I don't trust any exchange.

In Brazil, selling big amounts in p2p transfers may be a problem with tax authorities. It is not illegal, but  it is more likely that they will demand more information, which is quite uncomfortable

[n0nce]

Would this news qualified for your list? https://news.bitcoin.com/another-crypto-exchange-discourages-the-use-of-bitcoin-mixing-services/

Here is the list of exchanges which can ban you and confiscate your funds at any moment:

• All centralized exchanges

They can, sure. But I'd like to know and make visible to everyone which are either openly against fungibility / mixing and condone it officially or where many users have reported such issues in the past.

That was already included in OP!

Even so, it's worth to mention any centralized exchange are likely reject certain address/coin.

True, I'll add a disclaimer, thanks! That's the reason this is a 'blacklist', not a 'whitelist' (in that, anything not on the list isn't guaranteed to be safe).

In Brazil, selling big amounts in p2p transfers may be a problem with tax authorities. It is not illegal, but  it is more likely that they will demand more information, which is quite uncomfortable

Trading larger volumes is an interesting question indeed. We pondered about that a bit on a tangent in this topic [How to leave KYC for good] and I don't think there's a really '100% safe, but also tax compliant' solution yet.
I believe if someone were to open an exchange in a crypto-friendly country like Portugal or El Salvador, that exchange may not be pressured as much when it comes to AML and maybe even KYC; while still providing European / American official documents that you can use when doing your taxes.

[LoyceV]

I've seen several posts lately from people willing to treat Bitcoin as non-fungible because they believe some coins are "tainted".
I'd say this is a severe threat to Bitcoin, and I wouldn't be surprised if governments use this because they can't stop Bitcoin in any other way. If people believe Bitcoin is "tainted", they won't accept it anymore. "We" should really inform people not to fall for this.
Nobody would reject a dollar bill because it has previously been used in a crime, despite the fact that 85 to 90% contains traces of cocaine. Claiming Bitcoin isn't fungible is just plain stupid.

Here's a few examples:

Today netex24 exchanger sent me tainted btc.

What's that? Are you saying Bitcoin isn't fungible?

service which i wanted to top up blocked my account.

The solution is simple: don't use services that tell you your Bitcoin is different than another Bitcoin.

I don’t tell that i will return btc. We can trace it. We can mark it.

Bitcoin is fungible. Stop trying to convince people it's not, and stop using services that treat Bitcoin as if it's not fungible.

Lmao you have no glue what are you talking about. Please stop spam in my tread if you don’t know anything about chainanalys, thx

BestChange.com should be added to this list. Even though they're not an exchange, and even though I've used them, they seem to think not all Bitcoins are equal:

Don’t you think exchangers that do not follow AML should be excluded from your site? Or at least marked as untrustworthy.
Today netex24 exchanger sent me tainted btc. And obviously service which i wanted to top up blocked my account.
I checked transaction via AML bot:
 
Risk Score: 50% Medium risk transaction
Medium risk
Exchange ML Risk Veryhigh - 100%

@rokuen
Thank you for the signal, we will certainly investigate the matter to find out all the details and if necessary, will take measures to prevent this in the future. The exchanger you named is one of the largest on over-the-counter and such appeals are the matter of exception.

In any case, your situation requires our involvement. We will certainly get in touch with the service representatives to find out the technical details of your transaction and offer them to change the counterparty, if necessary, if they use some compromised custodial service to store bitcoin.

In line with this, I am interested to know if the BestChange company subscribes to the idea that there are clean and dirty Bitcoins. I mean, yes, there are probably a lot of crimes in which Bitcoins are involved as there are countless others which involve fiat, but do you think that Bitcoins involved in these crimes are tainted and are therefore dirty and shouldn't be accepted by different Bitcoin platforms?

This is not so much our moral position, but the forced adherence to generally accepted norms. Regardless of our or anyone else's opinion, AML purity for cryptocurrency transactions has become as important a property as it is for fiat currencies. Most crypto transactions end up in centralized custodial services that adhere to standard rules for the entire global market, in particular, the fifth AML directive of the European Union (5AMLD). Therefore, in a sense, the widespread introduction of AML made BTC an analogue of NFT of the ERC-1155 standard

This site explains very well what it's all about:

Coin validation proposed to offer as a service to trace coins and try to give you a rating about how the history of the coin from your point of view and to offer that as a service to businesses. I think this could be quite dangerous because it goes back to that 17th century court case where now you could receive a coin that is perfectly valid at the time that you receive it, but a few weeks later a crime is uncovered and now your coin is tainted. So if this coin validation service is advicing many of the merchants where you would want to spend your coin at, it's tainted and now the merchant would refuse to accept your coin. That's a strange experience for you; you're holding a coin that you might have to sell at a discount to get rid of it. The aggregate effect of this might create a run on the bitcoin price. So it reopens this long-set legal principle that currency or currency units are all equal.

I can't stress enough how important this is!

[n0nce]

I've seen several posts lately from people willing to treat Bitcoin as non-fungible because they believe some coins are "tainted".
I'd say this is a severe threat to Bitcoin, and I wouldn't be surprised if governments use this because they can't stop Bitcoin in any other way. If people believe Bitcoin is "tainted", they won't accept it anymore. "We" should really inform people not to fall for this.
Nobody would reject a dollar bill because it has previously been used in a crime, despite the fact that 85 to 90% contains traces of cocaine. Claiming Bitcoin isn't fungible is just plain stupid.


This site explains very well what it's all about:

Coin validation proposed to offer as a service to trace coins and try to give you a rating about how the history of the coin from your point of view and to offer that as a service to businesses. I think this could be quite dangerous because it goes back to that 17th century court case where now you could receive a coin that is perfectly valid at the time that you receive it, but a few weeks later a crime is uncovered and now your coin is tainted. So if this coin validation service is advicing many of the merchants where you would want to spend your coin at, it's tainted and now the merchant would refuse to accept your coin. That's a strange experience for you; you're holding a coin that you might have to sell at a discount to get rid of it. The aggregate effect of this might create a run on the bitcoin price. So it reopens this long-set legal principle that currency or currency units are all equal.

I can't stress enough how important this is!

Thanks for the quotes Loyce! Informing people is exactly what this thread is aimed at; though admittedly it's mostly focusing on keeping a list of the entities that are known / proven to try make people believe some coins are 'tainted'.

[hugeblack]

Does anyone know why they reject the “polluted” coins or on what legal basis they base their classification on these coins? In the end, the coins that come from the mixtures are not necessarily illegal or from illegal sources?

Does your service include sites that do not accept bitcoin from gambling, porn, drug promotion, etc.? Or are you talking about mixing/“polluted” coins specifically?

In the previous days, we started hearing the term green coins "those that have been mined from environmentally friendly sources" and which many platforms "such as Coinbase" may adopt for reasons related to the stock market.

[LoyceV]

Does your service include sites that do not accept bitcoin from gambling, porn, drug promotion, etc.? Or are you talking about mixing/“polluted” coins specifically?

I'd say it's about any reason to consider some Bitcoins more equal than others.

Note that this isn't about exchanges freezing funds owned by drug dealers, that's understandable. It's about freezing funds from the bar where the drug dealer bought his coffee.

[n0nce]

Does your service include sites that do not accept bitcoin from gambling, porn, drug promotion, etc.? Or are you talking about mixing/“polluted” coins specifically?

Yes, I'd absolutely add such sites that just arbitrarily reject certain 'coins'.
Anyone trying to come up with a definition of 'pollution' of BTC is actually attacking Bitcoin's fungibility and should be called out. That's what this thread is for.


An easy way to understand it is the comparison to 'dirty fiat' that LoyceV has brought up: nobody rejects a paper bill you got by winning at a casino or a lottery or one you got by selling drugs. Nobody inspects bank notes for illegal substances or checks the serial numbers.

Another point to consider would be that laws differ around the world. I may live in a state where growing and selling marijuana is legal, so selling it for BTC would be absolutely legal; however if I send the coins to someone in a different state or use the BTC to pay for coffee, and someone would somehow label it as 'drug money', it couldn't be spent anymore. Wouldn't that be pretty crazy?
If this seems far fetched, think about something else: booze. In most parts of the world, nobody would label me a criminal if I were to sell home-brewed beer. But there are places where alcohol is indeed illegal.

What I'm trying to say is: we can't restrict Bitcoin that was used for activity X because it is illegal in state Y. Bitcoin knows no states, borders or laws.

[OROBTC]

...

A very useful thread, thanks OP and other repliers.  These facts/policies/thoughts are important because they do indeed cast light on threats to BTC and the philosophy of privacy.  Very important.

*   *   *

*Gemini, my experiences only*

In January 2021 I finally joined Gemini.  I did the whole KYC thing, answered their questions, etc.  I did this because I wanted to sell some of the BTC I had acquired for MUCH cheaper, and so take some gains.  I sold a lot between January and October (2021).

When I applied to get into Gemini, I told them upfront that most of my coins were mixed and/or coinjoined.  I told them that I was not doing illegal things, but valued my privacy.  No drugs, no gambling.  US citizen.  I wanted to sell some BTC to take some gains.

They took me on.  I went on to sell a large percentage of my BTC at those wonderfully high prices in 2021.

Gemini had some questions about the way I was selling (some small amounts a couple of times a week for a few months), they thought I might be cashing out BTC from a business.  I told them no, I was selling that way because I wanted to CA$H IN some BTC and that I was not smart enough to sell at the All Time High, so I was selling over a period of relatively high prices (Jan - Oct 2021).  And Gemini was OK with that.  And as far as I am concerned, Gemini served me well (albeit with KYC and explanations).

[PrimeNumber7]

Does your service include sites that do not accept bitcoin from gambling, porn, drug promotion, etc.? Or are you talking about mixing/“polluted” coins specifically?

I'd say it's about any reason to consider some Bitcoins more equal than others.

Note that this isn't about exchanges freezing funds owned by drug dealers, that's understandable. It's about freezing funds from the bar where the drug dealer bought his coffee.

Do you have any evidence that this is happening? I don't think it would be difficult for a blockchain analysis company to see the difference between someone buying $100 worth of drinks at a bar, and a someone selling $100,000 worth of coin.

When you spend 1BTC, you are spending a very specific output of a previous transaction, or a very specific set of outputs from previous transaction(s). If you are spending that 1BTC, the transaction fee you will need to pay will depend on how many outputs you are spending.

[LoyceV]

Thanks for the quotes Loyce!

How about curses?

Except that I forgot to mention one thing: The 1 mBTC you’ll receive has a curse associated with it

As said, those opposed received some cursed coins

If this doesn't show how much BS the idea of "tainting" is, I don't know what does

Note that this isn't about exchanges freezing funds owned by drug dealers, that's understandable. It's about freezing funds from the bar where the drug dealer bought his coffee.

Do you have any evidence that this is happening?

No, it was a theoretical example.

I don't think it would be difficult for a blockchain analysis company to see the difference between someone buying $100 worth of drinks at a bar, and a someone selling $100,000 worth of coin.

The $100,000 might get more interest, but does that mean the "taint" disappears for small transactions? It sounds arbitrary.
And what if the miner gets a transaction fee from a drug dealer? Or if the drug dealers pays a very high fee to a friendly miner who gives him back fresly mined coins?

For who hasn't read it yet: ChipMixer explains it nicely:

Furious you go for coffee. Barista shows you printed QR code. You mindlessly pay 0.1 mBTC with your mobile wallet. Your blockchain privacy has been lowered. How?

Baristas deposit address is printed which means it has been used by every bitcoin-using customer. Everyone around seen you pay with Bitcoin to public address and they can check your transaction to know your public address and how much Bitcoin you have. Bob is not there but he also knows where and when you have been drinking. Your coffee-induced habit has been recorded on blockchain forever.

You go out to your favorite vegan store. You try to pay when owner checks something on their computer and visibly reddens. They start shouting about unfair practices and slavery of coffee plantations. You are banned and cannot come back. What happened?

Baristas public address is well known. Vegan store owner may check if somebody transacts with them. When you paid for coffee - they did not know. But your vegan transaction is linked to previous transaction making it impossible to hide. If you could mix your Bitcoins you would have avoided that.

So, we now have cursed Bitcoins. I bet church can sell blessed Bitcoins at a premium. And vegan Bitcoins. Meat Bitcoins. Coffee slave Bitcoins. Drug Bitcoins.
Or just Bitcoins. I'll go for that.

[n0nce]

Thanks for the quotes Loyce!

How about curses?

Except that I forgot to mention one thing: The 1 mBTC you’ll receive has a curse associated with it

As said, those opposed received some cursed coins

If this doesn't show how much BS the idea of "tainting" is, I don't know what does

LOL, Bitcoin has gone religious or what?

So, we now have cursed Bitcoins. I bet church can sell blessed Bitcoins at a premium. And vegan Bitcoins. Meat Bitcoins. Coffee slave Bitcoins. Drug Bitcoins.
Or just Bitcoins. I'll go for that.

I take a plain Bitcoin too!

[Poker Player]

|	Paxos Exchange	|	Rejects mixed funds	|	Source: https://news.bitcoin.com/another-crypto-exchange-discourages-the-use-of-bitcoin-mixing-services/	|
|	Binance Exchange	|	Rejects mixed funds (Wasabi)	|	Source: https://news.bitcoin.com/as-fatf-regulations-galvanize-crypto-mixing-applications-are-targeted/	|
|	Coinbase Exchange	|	Closes accounts that deposit mixed funds	|	[need source]	|
|	Wasabi 2.0 Mixer	|	Blacklists UTXOs by working with Chainalysis	|	Source: https://blog.wasabiwallet.io/zksnacks-blacklisting-update/	|
|	BestChange.com	|	Supports 'clean and dirty Bitcoins'	|	Source: https://bitcointalk.org/index.php?topic=3309245.msg60225919#msg60225919	|

This blacklist is very commendable.

Does anyone believe that over the years these companies will change their behavior? Because what I see is that the list of companies will get bigger and bigger. There will be more control, less privacy, more KYC/AML and more blacklist of supposedly tainted coins.

I already expressed a similar, rather pessimistic opinion in my thread: Goodbye, privacy, goodbye, it was nice while it lasted.

Convince me otherwise, please.

[n0nce]

This blacklist is very commendable.

Feel free to add any similar experiences you've had (maybe with funds coming from poker sites - as your name suggests) and I can add them to the OP! I know some exchanges and other services complain about funds from gambling sites, but don't know exactly which ones, so any feedback in this direction from a long-time forum member would definitely be appreciated.

Does anyone believe that over the years these companies will change their behavior? Because what I see is that the list of companies will get bigger and bigger. There will be more control, less privacy, more KYC/AML and more blacklist of supposedly tainted coins.

I personally don't think so (short-term), however if services realize that large amounts of users stop trusting them with their coins if they show such (unreliable / untrustworthy) behavior, they might stop considering going more strict with KYC/AML and blacklisting / 'taint definitions'. Long-term it might convince companies who already went 'down' the 'taint route' to do a U-turn; it's much harder to do though, since they'll have to somehow explain they you suddenly accept 'dirty criminal coins' that they previously deemed 'bad' and unacceptable.

I already expressed a similar, rather pessimistic opinion in my thread: Goodbye, privacy, goodbye, it was nice while it lasted.
Convince me otherwise, please.

It's a good thread; however as pointed out there, we still have alternatives, some of which are P2P and / or fully decentralized. I strongly believe we can educate people to stop conforming with outrageous, unreasonable rules that e.g. exchanges put in place and stop doing business with them. If enough people understand this (which is a pretty reasonable / logical thing - since good alternatives do exist), the centralized services will be forced to back-pedal if they don't want to go out of business.