Tainted coins

[D ltr]

But the best way to "wash" tainted coins is mining in the end. They rent machines and mine. I think the undertaking as a whole thing (mining pool) would be illegal in this case.

In the real world you have to know your business partners. And I hope it is the same in the virtual world.

Or did not we care?

wait, I'm confused by the meaning of tainted coins and have to be washed with mined?
how does this mean
if you mean coins obtained from the proceeds of crime and in the form of btc are tainted (dirty) money then what about fiat money obtained from selling illegal drugs?
basically the crypto market does not know what tainted money is because no one knows who we are transacting with because it is anonymous every trader let alone
The market has buy-sell support so that no matter what people sell, there are always people who respond

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[Bialke]

Nearly 50.000 BTC (former "tainted coins") were trasfered to Coinbase in the last days. 100.000 BTC (former "tainted coins") will follow in the next days. The "tainted coins" were confiscated coins by the US governement, and are going cheap in the market now!

[hd49728]

Nearly 50.000 BTC (former "tainted coins") were trasfered to Coinbase in the last days. 100.000 BTC (former "tainted coins") will follow in the next days. The "tainted coins" were confiscated coins by the US governement, and are going cheap in the market now!

Please where are sources of those tainted transactions that are big with 50.000 and 100.000 BTC.

If I have tainted bitcoins from criminal activities, I am not stupid to do money laundering on a centralized platform like Coinbase. So the story seems to be untrue.

If I do this, I would be smarter to move smaller amount of BTC than move them all in two big transactions like you shared. I would prefer to gradually make money laundering than do it all at once and face with risk that all of my coins will be seized by a centralized exchange.

[Bialke]

Please where are sources of those tainted transactions that are big with 50.000 and 100.000 BTC.

One source for one part: https://thedefiant.io/us-gov-moves-1b-seized-btc

Another source for the other part (german): https://www.btc-echo.de/schlagzeilen/mt-gox-insolvente-bitcoin-boerse-verschiebt-rueckzahlung-160739/

The timestamp was early March 2023.

The first source is about 40.000 BTC (seized through the US governement) transfered for selling to Coinbase.

The second source is about the payback of the frozen/seized Mt.Gox Bitcoins.

[MusaMohamed]

Despite of very biggest cases, tainted coins will no longer be tainted after they have many layers of transactions from initial tainted addresses and wallets to other wallets.

Bitcoin Q&A: Blacklists, Taint, and Wallet Finger-printing.

This video is from Andreas Antonopoulos, the author of Mastering Bitcoin book, a most successful book about Bitcoin. He explained very detailed about tainted coins and how exchanges blacklist such coins. Usually exchanges don't use too complicated tools and check very deep in blockchain history to find tainted coins.

[pgbit]

One possible solution to this problem is to use a third-party service that can verify the origin of a Bitcoin transaction. These services will flag any transaction that has been involved in illegal activities so that users can avoid it.

[BenCodie]

Tainted coins are an agenda pushed by companies like chainanalysis to make some coins to be perceived as more valuable than others. A great contradiction of the theory was recently told when the German police sold seized "criminal"/"tainted" coins and now claim that they are completely clean because it came from them.

The people can stand up to this agenda and make all coins equal again by using non-custodial services, decentralized/p2p exchanges and avoiding any service that uses these companies and their services.

There is no such thing as tainted coins. This isn't endorsement to accept coins from shady places, but if you aren't a criminal then you shouldn't be treated like one if your coins came from somewhere shady a long way down the chain.

[Z-tight]

One possible solution to this problem is to use a third-party service that can verify the origin of a Bitcoin transaction. These services will flag any transaction that has been involved in illegal activities so that users can avoid it.

Do you mean using third party services like Binance to hold your BTC because you are worried about 'tainted coins', sorry, but i will pass that one, the risk that comes with using third party services to hold your BTC is far greater than the worry about 'tainted coins'. How many times have we read charges against third party services for knowingly helping money launderers and fraudsters to hide the source of their money, they only declare the ones they want to and act legitimate when the radar of the authorities is on them, so do not believe that these services are saints in the network that help keep the network safe, it may even be the opposite.

If you use BTC and you are not a criminal, neither are you a money launderer, you don't have to worry about tainted coins, the correct thing for the authorities to do is to flag the initial address than first received the stolen money, and from there begin their investigation. If they don't and the funds keep changing hands and gets to you, i don't think you can be prosecuted for that.

[Darker45]

This is all founded upon a subjective presupposition. This is based on mere opinion. In the first place, why is this standard applied to Bitcoin when it is not even applied to fiat? Is a soiled 1 dollar bill lower in value than a newly printed 1 dollar bill? Does a crumpled or creased 10 dollar bill have lower value than a smooth one? The answer is no.

Scientists and chemical analysts actually found out in a number of studies and surveys that more than 90% of US bills are contaminated with cocaine.^[1][2][3] Do these 90% contaminated bills have lower value than those cleaner ones? Of course, not! So why should Bitcoin be treated any differently?

In terms of Bitcoin used in criminal activities and transactions, they should be confiscated the way US dollars used in illegal transactions are confiscated. And then they will go back into circulation carrying the same purchasing power.
 
[1] https://en.wikipedia.org/wiki/Contaminated_currency#:~:text=%22It's%20virtually%20impossible%20for%20cocaine,was%20confirmed%20by%20Ronald%20K.
[2] https://www.nationalgeographic.com/science/article/cocaine-on-money-drug-found-on-90-of-us-bills
[3] https://www.acs.org/pressroom/newsreleases/2009/august/new-study-up-to-90-percent-of-us-paper-money-contains-traces-of-cocaine.html

[FahriZah]

Bitcoin Never Tainted coin Because All Of The Coins Of Mothers Coin Is Bitcoin.But So Many Tainted Alts Coin Are Available In Crypto Currency Market Still Now So Many Scam Coin Available So Be-Careful And Always Beware Scam/Tainted Coins And Always Try To Find Out Very STRONG Project With Best Coins.

[Jason Brendon]

Despite of very biggest cases, tainted coins will no longer be tainted after they have many layers of transactions from initial tainted addresses and wallets to other wallets.

I wish it was true. But I don't agree with it. I think once tainted, always tainted.. Otherwise, thing would have been much easier. People could then just self-send all the time and laundering until it's no more tainted.

[kryptqnick]

I've never encountered an issue of tainted coins personally, and I don't know if there really is a problem of such coins being confiscated or frozen when people are merely recipients of such coins and have no involvement in the criminal acts. I've heard stories of the FBI seizing accounts and then selling bitcoins, but in those cases the money was clearly taken from criminals. Also, I believe it's sold in a form of an auction, so it's not necessarily undervalued. Moreover, once sold by the FBI, I'm sure these coins are cleared of any suspicion and are successfully back in business as clean coins.  So maybe there isn't much of an issue here.

[MusaMohamed]

I've never encountered an issue of tainted coins personally, and I don't know if there really is a problem of such coins being confiscated or frozen when people are merely recipients of such coins and have no involvement in the criminal acts.

If you use mixers and have mixed coins from outputs, you should use those coins with a separating account for those coins. If you get troubles with exchange, it won't be mixed with your clean coins. You will reduce risk of losing all coins just because of Mixing or Coinjoin transactions.

I've heard stories of the FBI seizing accounts and then selling bitcoins, but in those cases the money was clearly taken from criminals. Also, I believe it's sold in a form of an auction, so it's not necessarily undervalued. Moreover, once sold by the FBI, I'm sure these coins are cleared of any suspicion and are successfully back in business as clean coins.  So maybe there isn't much of an issue here.

Did you imply about the coins from SilkRoad seize years ago which were auctioned long time ago too?

U.S. seizes over $1 billion in bitcoin tied to 'Silk Road'
US government prepares to auction $17m of seized Silk Road bitcoins
The Final Silk Road Bitcoin Auction Has Occurred

After auctions, seized coins (that were tainted too) will be circulated on the market again. They would no longer be tainted after getting covered more deeply on the blockchain.

[Despairo]

Despite of very biggest cases, tainted coins will no longer be tainted after they have many layers of transactions from initial tainted addresses and wallets to other wallets.

I wish it was true. But I don't agree with it. I think once tainted, always tainted.. Otherwise, thing would have been much easier. People could then just self-send all the time and laundering until it's no more tainted.

Sending a coin from mixer to wallet and other wallet is called as conceal, this still tagged as high illicit money because you're trying to hide something.

Sending your coin from one wallet to another wallet for many times doesn't solve anything because it's really easy to track it, they will know the original source of your coin.

If you have trade P2P with someone and you're suspected using money laundering, you can explain to the banks about it, your case will be solved.

But if you're the one who's using mixer, it's better if you never link your coin with banks in order to cashout your money.

[witcher_sense]

I wish it was true. But I don't agree with it. I think once tainted, always tainted.. Otherwise, thing would have been much easier. People could then just self-send all the time and laundering until it's no more tainted.

Actually, Bitcoin is designed in such a way that the mere sending of transactions makes it a little bit "cleaner" (use quotation marks to emphasize that the "taint" thing doesn't really exist: it is just a made-up term used to control people's minds and actions), which you can verify just by learning how the mining process works under the hood. When you are sending a transaction (even to yourself), you implicitly specify the amount of money you want to pay to see your transaction confirmed. This implicit amount equals the total of outputs substructed from the total of inputs. Yes, it is called a transaction fee. Fees have no inputs, and no outputs, the are completely anonymous and, therefore, clean by definition. By actively making transactions in the bitcoin network, people constantly "launder" part of the total supply and eventually will make the taint coins narrative obsolete.

[bittraffic]

It's just them trying to make BTC tainted. Whether 1BTC is tainted or not, it's still 1BTC.
So yes it's a big loss for Y that got it legally and then just taken away from him. X didn't know. But if he just knew that the coins are tainted he could have used a mixer to fix them.

Once the FBI sold the coins, will they still be considered tainted?  Because it seems to be like they are also violating that rule.

[Mttewndew]

It's a tough situation, but perhaps Bitcoin could implement some kind of tracking system to prevent tainted coins from being used in transactions. This could help protect both buyers and sellers

[dr.hopkins]

I guess the lesson here is to always do your due diligence before accepting Bitcoin as payment. You wouldn't want to unknowingly get mixed up with any dirty coins.

[Jason Brendon]

I guess the lesson here is to always do your due diligence before accepting Bitcoin as payment. You wouldn't want to unknowingly get mixed up with any dirty coins.

No, if btc wants to be day-to-day money, this has to be obvious and easy to solve. It's not some investment where you do research. Do you do your due diligence before taking your salary?

[borovichok]

I've never encountered an issue of tainted coins personally, and I don't know if there really is a problem of such coins being confiscated or frozen when people are merely recipients of such coins and have no involvement in the criminal acts. I've heard stories of the FBI seizing accounts and then selling bitcoins, but in those cases the money was clearly taken from criminals. Also, I believe it's sold in a form of an auction, so it's not necessarily undervalued. Moreover, once sold by the FBI, I'm sure these coins are cleared of any suspicion and are successfully back in business as clean coins.  So maybe there isn't much of an issue here.

Scammers exist in the market, people who only exist to accuse others while complicating and jeopardizing the entire trade system. I've seen a lot of examples when traders' accounts get frozen because they've left a trail of fraudulent activity, and this primarily happens in P2P trading. For instance, purchasing large quantities of bitcoin from a pathological liar and getting adequate account punishment. Being involved with tainted coins is equivalent to engaging in illegal activity on the market, putting your personal accounts and cash at stake, and triggering a seizure order should things go completely wrong.