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

[n0nce]

It's going to be hard honestly.

Yup, but without it, we will end up with two tiers of bitcoin. "Clean, government approved bitcoin", which are accepted anywhere and trade for a premium, and "tainted, government condemned bitcoin" which are refused by most businesses and users and are worth less. Yes, bitcoin itself will still be decentralized and censorship resistant, but if the only thing I can do with my "tainted" bitcoin is trade it back and forth for other "tainted" bitcoin with other "tainted" users, then it will have failed as a currency.

I guess then we would need to onboard businesses who are willing to get educated, understand that taint is nonsense and explicitly stand against it. Only with a business explicitly declaring in ToS (or wherever) Bitcoin as fungible am I willing to include it on a whitelist.

Yeah, fair points. It would just be nice to be able to get a bit of a feel for a new merchant I've never used before first, rather than having to make a small test purchase first to see if they are going to take issue with my coinjoined/mixed bitcoin. Although simply avoiding any merchant which uses BitPay already gets you a good chunk of the way there.

BitPay is censoring UTXOs? It's actually listed on https://bitcoin.org/en/wallets/desktop/, funnily - together with Wasabi wallet. Not a good look if it has similar problems.

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[o_e_l_e_o]

I guess then we would need to onboard businesses who are willing to get educated, understand that taint is nonsense and explicitly stand against it.

That's the thing - ignoring made up taint is the default position. All you have to do to ignore taint is set up bitcoin wallet and give your address to customers. Let's encourage more of that.

BitPay is censoring UTXOs?

BitPay does a whole lot of shady stuff, including demanding KYC not just from merchants who use it but also the customers who shop at those merchants via BitPay, and freezing any payments they don't like. I find that they are predominantly used by businesses who are quite happy to comply with taint nonsense, and so are quite happy for BitPay to demand KYC from all their customers and do all their dirty work for them.

Note there is a difference between the BitPay payment processor and the BitPay wallet, but given how utterly horrendous the former is I would never touch the latter (or indeed anything from the same company).

[n0nce]

I guess then we would need to onboard businesses who are willing to get educated, understand that taint is nonsense and explicitly stand against it.

That's the thing - ignoring made up taint is the default position. All you have to do to ignore taint is set up bitcoin wallet and give your address to customers. Let's encourage more of that.

Exactly; unfortunately there's no way to tell if a business is doing exactly that or if it's 'sometimes' blocking funds due to 'taint' (especially if it's rare).
As long as they don't position themselves explicitly, it's not possible to guarantee that they are 'benign', no matter how many anecdotal examples exist, where supposedly 'tainted' inputs were accepted.

BitPay is censoring UTXOs?

BitPay does a whole lot of shady stuff, including demanding KYC not just from merchants who use it but also the customers who shop at those merchants via BitPay, and freezing any payments they don't like. I find that they are predominantly used by businesses who are quite happy to comply with taint nonsense, and so are quite happy for BitPay to demand KYC from all their customers and do all their dirty work for them.

Note there is a difference between the BitPay payment processor and the BitPay wallet, but given how utterly horrendous the former is I would never touch the latter (or indeed anything from the same company).

[o_e_l_e_o]

As long as they don't position themselves explicitly, it's not possible to guarantee that they are 'benign', no matter how many anecdotal examples exist, where supposedly 'tainted' inputs were accepted.

Yeah, true. And even if they did position themselves explicitly as ignoring taint and respecting privacy, there is nothing stopping them from suddenly changing everything one day and instead becoming pro-taint, pro-surveillance, and pro-censorship. *cough* Wasabi *cough*

Although whenever I see a merchant or business using a self-hosted payment processor such as BTCPay, I immediately feel much more comfortable using them then I do with third party centralized payment processor.

[ABCbits]

Only with a business explicitly declaring in ToS (or wherever) Bitcoin as fungible am I willing to include it on a whitelist.

But i expect it'll difficult for most business owner to do that explicitly due to various regulation/law. I only expect anonymous group or service which focus on user privacy to do that.

Note there is a difference between the BitPay payment processor and the BitPay wallet, but given how utterly horrendous the former is I would never touch the latter (or indeed anything from the same company).

Take note BitPay wallet is open source[1], where few people automatically assume it has to be good/secure/trusted. But i'd like to let people know WalletScrunity failed to compile the wallet from source code[2]. Someone even offer USDT for people who can give detailed build guide under Windows[3].

[1] https://github.com/bitpay/wallet
[2] https://walletscrutiny.com/android/com.bitpay.wallet/
[3] https://github.com/bitpay/wallet/issues/12046

[n0nce]

Only with a business explicitly declaring in ToS (or wherever) Bitcoin as fungible am I willing to include it on a whitelist.

But i expect it'll difficult for most business owner to do that explicitly due to various regulation/law. I only expect anonymous group or service which focus on user privacy to do that.

That will definitely be a limitation. I can see how someone could use such a written commitment to Bitcoin fungibility as 'proof that the business endorses and facilitates money laundering' or something along these lines.

[bitmover]

Add FTX to that list.

FTX is asking information about Brazilian users who are using bitcoin mixers:

Google translated:

FTX demands explanations from users who use Bitcoin mixers
A Brazilian user and customer of the FTX exchange told Livecoins that in recent days he was surprised by an unusual charge from the exchange. Gaining fame as one of the largest cryptocurrency operations in the world, second only to Binance, this platform is one more operating in Brazil.

As the report told, the platform client was carrying out a negotiation to accept Bitcoin, and provided the brokerage address to receive the amount.

The person responsible for processing the transaction then chose to use a mixer to protect their identity and not reveal their BTC possession. This is a common practice among secure transactions, since as the blockchain is public, by revealing its address, the network user could expose its balance and he did not want that.

Upon receiving the transaction, however, the FTX customer's address ended up being placed on an alert list. The broker quickly contacted the user and demanded explanations about the origin of the money, stating that this is part of the compliance policy.
https://livecoins.com.br/corretora-cobra-explicacoes-de-usuarios-que-utilizam-mixers-de-bitcoin/

I couldn't find information about this incident by users from other countries. But we should keep an eye open.

[dkbit98]

FTX is asking information about Brazilian users who are using bitcoin mixers

This is the first time I hear something like this coming from FTX exchange and they probably started using similar detecting software like their friends and partners from Binance.
FTX recommendation I found in this article is very stupid, they are recommending we should know all our counterparties before making transactions, or transact only with regulated platforms with established compliance procedure.
So imagine I run a business selling stuff online and offline, I would have to kyc all my customers, and check all their transaction history  
They have to be crazy if they really suggesting stuff like this to their customers.

[n0nce]

Add FTX to that list.

FTX is asking information about Brazilian users who are using bitcoin mixers:
~snip~

Honestly, asking a user where they got their funds from is pretty shitty - in my opinion, it's none of anyone's business where I got my money from.
But I don't see a mention of taint or seizing of funds because of their supposed criminal history.

I think I said it before, but in my opinion it's a little bit different whether an exchange steals my coin because whoever I got it from, withdrew it from a gambling site or a mixing service -- or because I sent coins directly from mixer / gambling / ... to the exchange.
The former is a matter of taint and would get a service onto my blacklist; the latter is a matter of businesses choosing which other services they don't want to do business with.

For example, I could own a car dealership and choose to only accept cash or Bitcoin payments, because I don't want to do business with banks (by receiving money through bank transfers which obviously come through banks that I don't like to do business with as a Bitcoiner).
The distinction is that I don't discriminate against the users or whatever they did with their money in the past, but I discriminate against other businesses (in this case, banks). It will still have an unpleasant effect on the users of course.


That said, I am considering adding a second section for services who ask more questions than usual when your funds come from mixers, casinos, and generally discriminate coins by their supposed origin (e.g. other exchange's known address, gambling site's known payout address, ...).
This would be a broader set of 'unreliable, due to general UTXO discriminating, services' as opposed to this list of 'unreliable, due to taint proclaiming, services'.
Let me know what you guys think about that.

[bitmover]

Add FTX to that list.

FTX is asking information about Brazilian users who are using bitcoin mixers:
~snip~

Honestly, asking a user where they got their funds from is pretty shitty - in my opinion, it's none of anyone's business where I got my money from.
But I don't see a mention of taint or seizing of funds because of their supposed criminal history.

I think I said it before, but in my opinion it's a little bit different whether an exchange steals my coin because whoever I got it from, withdrew it from a gambling site or a mixing service -- or because I sent coins directly from mixer / gambling / ... to the exchange.
The former is a matter of taint and would get a service onto my blacklist; the latter is a matter of businesses choosing which other services they don't want to do business with.

What I find more weird is that a bank never asked me any kind of proof of where my money comes from.
At the most, I just write my annual income, without giving any proof (at least in all banks and brokers that I ever used)
...
But bitcoin exchanges are now asking for "proof of funds", paychecks

[n0nce]

What I find more weird is that a bank never asked me any kind of proof of where my money comes from.
At the most, I just write my annual income, without giving any proof (at least in all banks and brokers that I ever used)
...
But bitcoin exchanges are now asking for "proof of funds", paychecks

Through bank transfers, that's no wonder - because they can ask the other bank so they obviously know where it 'comes from', easily.
Try depositing a few thousand USD worth of cash, and you will most probably get a phone call. Especially if it's not common for you to deposit large sums.

For instance, if you open a restaurant and thus start depositing cash on a regular basis, they will call and ask once, and then most probably leave you alone. Banks don't even care a lot about taxes, they just want to make sure they're not accomplices in crimes.
Especially since in case of a problem, your spoken statement (e.g. that you got the cash from your new restaurant business) can be used in a legal system as proof that they did a reasonable effort to find out the funds' origins and to the best of their knowledge, you were running a legitimate business.

[bitmover]

What I find more weird is that a bank never asked me any kind of proof of where my money comes from.
At the most, I just write my annual income, without giving any proof (at least in all banks and brokers that I ever used)
...
But bitcoin exchanges are now asking for "proof of funds", paychecks

Through bank transfers, that's no wonder - because they can ask the other bank so they obviously know where it 'comes from', easily.
Try depositing a few thousand USD worth of cash, and you will most probably get a phone call. Especially if it's not common for you to deposit large sums.

For instance, if you open a restaurant and thus start depositing cash on a regular basis, they will call and ask once, and then most probably leave you alone. Banks don't even care a lot about taxes, they just want to make sure they're not accomplices in crimes.
Especially since in case of a problem, your spoken statement (e.g. that you got the cash from your new restaurant business) can be used in a legal system as proof that they did a reasonable effort to find out the funds' origins and to the best of their knowledge, you were running a legitimate business.

A few years ago I sold a physical property and received some money in my bank account. I received no phone call. Nobody asked for my paychecks or where did that money from the property came from. All my explanations were made to the IRS, as the law demands.

I believe exchanges are being more invasive than the traditional banking system. Probably the lack of regulation may be allowing abuses from the exchanges over users and from the authorities over the exchanges.

[n0nce]

A few years ago I sold a physical property and received some money in my bank account. I received no phone call. Nobody asked for my paychecks or where did that money from the property came from. All my explanations were made to the IRS, as the law demands.

I believe exchanges are being more invasive than the traditional banking system. Probably the lack of regulation may be allowing abuses from the exchanges over users and from the authorities over the exchanges.

They are, but that's because Bitcoin is more like physical cash than like a bank transfer. In your example, you 'received money in your bank account' (bank transfer). If you were to sell a car for $20k in cash and deposit the amount, you would get questions, the same way an exchange questions you when depositing 1BTC.

I'm not trying to defend exchanges (see this thread); just saying that banks aren't really any better or worse - the two are almost synonymous. Some larger exchanges, in fact, are already banks and some banks offer Bitcoin or crypto exchange services. So the lines get very very blurry.

[dkbit98]

That said, I am considering adding a second section for services who ask more questions than usual when your funds come from mixers, casinos, and generally discriminate coins by their supposed origin (e.g. other exchange's known address, gambling site's known payout address, ...).
This would be a broader set of 'unreliable, due to general UTXO discriminating, services' as opposed to this list of 'unreliable, due to taint proclaiming, services'.
Let me know what you guys think about that.

I think new topic will only create more confusion.
Instead of creating new topic I would suggest expanding this topic and create separate part that is dealing only with additional questions coming from services.
More than often you will find that one exchange could be doing both, asking questions about history of your coins and freezing accounts for alleged ''tainted'' coins.

What I find more weird is that a bank never asked me any kind of proof of where my money comes from.
At the most, I just write my annual income, without giving any proof (at least in all banks and brokers that I ever used)

It's not really that different, except the fact that you never controlled any fiat money, unless you hold it as cash in your hand.
They already have full history of digital numbers on screen sent by other banks, but receiving larger amount of money would certainly trigger their red alert.

For instance, if you open a restaurant and thus start depositing cash on a regular basis, they will call and ask once, and then most probably leave you alone.

Bankers will never leave you alone because they are always trying to sell you new credit line, so you can have more and more debt, until whole economic debt explodes by design.

A few years ago I sold a physical property and received some money in my bank account. I received no phone call. Nobody asked for my paychecks or where did that money from the property came from. All my explanations were made to the IRS, as the law demands.

Maybe that is still possible in your country, but it's almost impossible to happen in Europe and western world.
Even if you don't receive call from bank, you will certainly receive calls or visit from tax authority andf other government parasites.
In many countries they are even reducing number of things and limit amount of money you can use to buy something with cash.

[n0nce]

I think new topic will only create more confusion.

That's why I said second section. Would still be part of the original post in this thread.

More than often you will find that one exchange could be doing both, asking questions about history of your coins and freezing accounts for alleged ''tainted'' coins.

In that case, it would probably just be listed in the current list, though. It would become a subset of the new, more broader list - hence no need to list things twice.

A few years ago I sold a physical property and received some money in my bank account. I received no phone call. Nobody asked for my paychecks or where did that money from the property came from. All my explanations were made to the IRS, as the law demands.

Maybe that is still possible in your country, but it's almost impossible to happen in Europe and western world.
Even if you don't receive call from bank, you will certainly receive calls or visit from tax authority andf other government parasites.
In many countries they are even reducing number of things and limit amount of money you can use to buy something with cash.

I've sold a lot of stuff online and got paid through bank transfer, in the past. Mostly consumer electronics-type stuff, so no very high value of course.

The one limit I know of is a 10,000€ limit above which it gets tricky paying in cash. Businesses accepting such amounts need to get and keep a proof of origin from you.

Actually, EU is even trying to ban payments above 10,000€ in cash.

McGuinness said: “We respect that citizens like cash and we don’t want to get rid of it. We are talking about an upper limit of €10,000. Carrying so much money around in your pockets is really difficult. Most people don’t.” 

Some member states currently have ceilings on cash payments, ranging from €500 in Greece to €15,000 in Poland.

[NeuroticFish]

Actually, EU is even trying to ban payments above 10,000€ in cash.

In my country this is actually happening. For at least 6-7 years already. Whatever you want to buy and it's expensive, it has to be done through bank (hence with KYC).
If you want to buy a new car, worth for example €15k, you will not even be allowed to pay the €10k in cash, maybe some 10-15% of the price, and they will tell you nicely, but firmly, that the rest must be transferred through bank.

[dkbit98]

Actually, EU is even trying to ban payments above 10,000€ in cash.

I can confirm that in Greece you can't buy almost anything with cash (except maybe ice cream, popcorns, donuts, etc...),
and few days ago Israel just reduced cash payments to 6,000 Shekels (equivalent to $1,760) for business transactions and 15,000 Shekels ($4,400) in personal transactions.
If you combine this with digital ID wallets they started introducing in Greece, you can see direction all this is going, and they justify if with security, safety and money laundering.
They want to remove cash and remove all privacy and custody of money from people, but this is where Bitcoin could play important role.

Sources:
https://econintersect.com/israel-restricts-cash-payments-to-boost-digital-payments
https://www.nfcw.com/2022/07/29/378338/greece-rolls-out-digital-id-cards-and-driving-licences/

[BlackHatCoiner]

I can confirm that in Greece you can't buy almost anything with cash (except maybe ice cream, popcorns, donuts, etc...)

As a Greek citizen, I can tell you that I'm forbidden to make any transaction that involves more than 1,500 EUR in cash. For example, a smart TV, an upgraded PC build, a second-hand motorcycle. Obviously, I'm money laundering in all three cases. 

If you combine this with digital ID wallets they started introducing in Greece, you can see direction all this is going, and they justify if with security, safety and money laundering.

Bingo. Gov.gr Wallet isn't really a wallet at the moment, it's just an app that contains your identity and driver license, but it won't take long before our representatives have the brilliant idea to enforce their euro-shitcoin across millions of devices with just an update.

They want to remove cash and remove all privacy and custody of money from people, but this is where Bitcoin could play important role.

I'm afraid it'll have to. There's no other emergency exit. It's either bitcoin or complete bureaucratic dictatorship.

[n0nce]

Actually, EU is even trying to ban payments above 10,000€ in cash.

In my country this is actually happening. For at least 6-7 years already. Whatever you want to buy and it's expensive, it has to be done through bank (hence with KYC).
If you want to buy a new car, worth for example €15k, you will not even be allowed to pay the €10k in cash, maybe some 10-15% of the price, and they will tell you nicely, but firmly, that the rest must be transferred through bank.

Wow, that's getting scary to be honest. It's probably getting worse over time. As I said, from my experience, anything under or including 10.000€ was fine without any documents. At the dealership. I know of people who sold / bought cars for larger amounts P2P in cash, though.

~snip~
They want to remove cash and remove all privacy and custody of money from people, but this is where Bitcoin could play important role.

Totally! I hope people see and take this opportunity better sooner than later.
Just taking the opportunity to highlight my current 'personal text': Ubi concordia, ibi victoria. I'm not sure governments really want to fight against a population in which every single citizen understands what was taken away from them by limiting (or potentially banning) physical cash.

They want to remove cash and remove all privacy and custody of money from people, but this is where Bitcoin could play important role.

I'm afraid it'll have to. There's no other emergency exit. It's either bitcoin or complete bureaucratic dictatorship.

Call me optimistic, but I want to believe that without Bitcoin, people would resort to foreign cash like USD and / or barter + gold coins? I'm probably totally off on this one, though.

[BlackHatCoiner]

Call me optimistic, but I want to believe that without Bitcoin, people would resort to foreign cash like USD and / or barter + gold coins? I'm probably totally off on this one, though.

There's no chance this ever happens, because:

• There will be a non-(yet)-hyperinflated currency they can use. It'll just not work exactly like cash.
• Physical cash (EUR etc.) will be discouraged to use, because usage of the e-euro will be incentivized by the conformists who'll adopt it. (And then probably by the entire world)