Bitstamp's stolen BTC on the move

[onemorebtc]

i hate tainting to.
it just kills bitcoins fungibility...

but the reality is that some coins are already tainted and are not accepted by eg coindesk.

just use monero if you dont like that fact

[sgbett]

wtf you guys.  I can't believe you're talking about blacklisting these coins, as if that would be a good thing. No.

That would be one giant leap toward the traditional banking cartel. When you receive payment for something, do you want to have to check to see if any of those bits you got were from these stolen coins (or the thousands of others)? Were they within a couple transactions of these coins? Comb the entire transaction history to make sure they are not blacklisted somewhere? That sounds like a huge burden. Are you going to pay to have someone else do that for you? Those are the only 2 choices.

You want every coin to have special rules attached to it? Oh, this coin can't go to Bitstamp, and that one can't go to XXXX. That makes some coins worth more than others, and it means you're taking a risk every time you buy coins which you can't verify the history of. Fungibility is one of the key properties of bitcoin that make it better than the alternatives. You should not throw it away to maybe make this one guy's life more difficult.

Yeah, it sucks that these coins were stolen, and it's looking like the person who perpetrated the act may in fact be a bad guy. But it's time to shift the paradigm folks. These coins were stolen because it was possible to steal them. Bitstamp made that possible. Traditional money services have high fees to cover this shit, and bitcoin has low fees because it's secure, and you don't need to cover this shit if you're transacting properly. If you do something dumb, it's on you, we're not charging the consumers for the mistakes and inefficiencies of the money transmitters anymore. That's the point of bitcoin.

Bitstamp is in the process of rewriting their entire system from the ground up, to prevent this sort of thing happening again. Can you imagine Visa doing this after the Target hack? No, they keep doing the same thing, because you guys keep paying for their losses. There's no point in them changing anything. Bitstamp had suck ass security, a hacker fined them 5 million dollars for it. Their security (supposedly) will improve as a result. Gox died as a result, and we'd all have been better off if it happened way sooner than it did. Incompetence is not an option in this space, unless you have a shit ton of money to burn.

quite agree. its great the coins can be tracked, and this can probably help in tracing and capturing and bring to justice the perpetrators. traditional law enforcement should enforce the law.

in the meantime bitcoin should just carry on being bitcoin and not be concerned about who owns what coins and whether one coin is any less valid than any other.

[s1lverbox]

I agree about marking coins. Maybe they stole it but now coins changed owner and let it be. No one have right to point finger where the cois should go or who should or shouldn't own it. If we start burning coins shady coins or block them or marking them we might as well turn the lights of ans come back to fiat.

Maybe i see this wrong but this 19k of coins is nice bug bounty for who ever found way to get in to the system.


Little geek shit: 500 euro notes have RFID chips bonded to track notes.

[bigtimespaghetti]

I don't believe that marking coins is a good idea, just interesting to think about since most people crave reassurance and security.

that RFID chip stuff is crazy.

[B.A.S.]

It's rather ironic the desire for decentralized, anonymous activity, but as soon as the masked thieves come out to play, it's a witch hunt to find out who did it.

[pitham1]

Let's hope they will dump in btc-e  and all my bids  get filled. Or maybe bitstamp, have orders there too. 

I doubt they will sell the coins on the same exchange they stole them from.   

This does present an interesting point though- for example would an exchange have claim to the stolen funds after some time has passed and the coin has (legitimately) changed hands many times after the thief dumped them. I suppose not, as that could destroy confidence.

Are we moving closer to white/grey/black market coins?

They shouldn't.
If they do and try seize coins, it will be a lengthy legal process before it gets settled.

[Wary]

...
Bitstamp is in the process of rewriting their entire system from the ground up, to prevent this sort of thing happening again.
...

AFAIK, they are doing something more modest: rebuilding the system. I.e. installing and configuring all their software on their new server. That's why they are going to complete the task in a day or two. Rewriting the whole system would have taken several months. Although it may be a good thing to do  

[dinofelis]

wtf you guys.  I can't believe you're talking about blacklisting these coins, as if that would be a good thing. No.

That would be one giant leap toward the traditional banking cartel. When you receive payment for something, do you want to have to check to see if any of those bits you got were from these stolen coins (or the thousands of others)? Were they within a couple transactions of these coins? Comb the entire transaction history to make sure they are not blacklisted somewhere? That sounds like a huge burden. Are you going to pay to have someone else do that for you? Those are the only 2 choices.

You want every coin to have special rules attached to it? Oh, this coin can't go to Bitstamp, and that one can't go to XXXX. That makes some coins worth more than others, and it means you're taking a risk every time you buy coins which you can't verify the history of. Fungibility is one of the key properties of bitcoin that make it better than the alternatives. You should not throw it away to maybe make this one guy's life more difficult.

Yeah, it sucks that these coins were stolen, and it's looking like the person who perpetrated the act may in fact be a bad guy. But it's time to shift the paradigm folks. These coins were stolen because it was possible to steal them. Bitstamp made that possible. Traditional money services have high fees to cover this shit, and bitcoin has low fees because it's secure, and you don't need to cover this shit if you're transacting properly. If you do something dumb, it's on you, we're not charging the consumers for the mistakes and inefficiencies of the money transmitters anymore. That's the point of bitcoin.

Bitstamp is in the process of rewriting their entire system from the ground up, to prevent this sort of thing happening again. Can you imagine Visa doing this after the Target hack? No, they keep doing the same thing, because you guys keep paying for their losses. There's no point in them changing anything. Bitstamp had suck ass security, a hacker fined them 5 million dollars for it. Their security (supposedly) will improve as a result. Gox died as a result, and we'd all have been better off if it happened way sooner than it did. Incompetence is not an option in this space, unless you have a shit ton of money to burn.

I agree with you that tainting "shouldn't be done".  But in fact we see here a major bug in the bitcoin system: the PSEUDO anonymity.  In a system based upon trustlessness, which is the FUNDAMENTAL axiom of bitcoin, namely that nobody has to trust anybody, the very fact that tainting is a physical possibility and hence that fungibility *doesn't really exist* (which comes down to the pseudo in pseudo anonymity), and that one should impose a rule that one should trust others not to blacklist coins, is a fundamental problem.

Even gold is more fungible than bitcoin then: you can melt gold and (unless for very special markers such as radioactive tracers) nobody can distinguish this gold from that gold.

I think that "mixing" like with Darkcoin (although that system is far from perfect too, as it requires trust to the mixing nodes) should somehow be implemented in bitcoin if that is still possible.

[freedomno1]

This will be interesting. If these coins go to an exchange (that accepts them), well that's obviously not good for their rep.

Large amounts have moved before to different places
Kind of amusing this time that an exchange is the one whose coins are going to be sold instead of it being some other site having an exchange sell their coins after getting hacked.
Sure some will be local bits but makes you curious where they will end up in the end after splitting it mixing it etc.

If I were the hacker, I wouldn't try to sell the tumbled coins on an exchange (with KYC) for quite some time, too risky.
Instead, I would send them to multiple altcoin exchanges (that have no KYC) and pump up some less traceable alts.
Another possibility is to sell some of the tumbled BTC to fences on localbitcoins.

Would consider doing that as well if I were the hacker but also some other things, mix sell pump etc.
Anyways before someone else brings up blacklisting (Fungibility is important we can't discriminate the coins stolen yet each coin is the same as another coin like my dollar is the same as your dollar.)

Bitstamp is in the process of rewriting their entire system from the ground up, to prevent this sort of thing happening again. Can you imagine Visa doing this after the Target hack? No, they keep doing the same thing, because you guys keep paying for their losses. There's no point in them changing anything. Bitstamp had suck ass security, a hacker fined them 5 million dollars for it. Their security (supposedly) will improve as a result. Gox died as a result, and we'd all have been better off if it happened way sooner than it did. Incompetence is not an option in this space, unless you have a shit ton of money to burn.

True that

As a sidethought the main lesson from these hacks is that we have a hodgepodge of security measures that are used to protect peoples Bitcoins however because their is no uniform standard or means of securing encryption what we end up with is a variety of services with different levels of security related to Bitcoin assets and until we are able to set a uniform standard of safety and encryption that separates a services bank from its operating site any new service will have a varied level of precaution and security that we have to hope is secure enough to secure assets.

Best way around that is to develop value inside the blockchain itself (DAC's)
Next gen really does have some additional bonuses but for now guess we have to rely on centralized exchange risk.

[piramida]

I think that "mixing" like with Darkcoin (although that system is far from perfect too, as it requires trust to the mixing nodes) should somehow be implemented in bitcoin if that is still possible.

No it should not, bitcoin is perfectly fine as it is. Protip: You could always buy darkcoins, mix there, then move back into BTC.

[Mervyn_Pumpkinhead]

I doubt that these coins are sold any time soon, and I think that this 18k is just a small drop in the ocean.

There are a lot bigger problems out there then 18k lost bitstamp coins. MtGox lost 550k coins and no one has absolutely any idea on the whereabouts of these coins. Plus there have been many other thefts or scams of bitcoin, that are also probably still out there and the owners are slowly taking profit (https://bitcointalk.org/index.php?topic=83794.0).

In all probability, if you are buying bitcoins, then at least a large part of that money goes to the pockets of scammers, hackers and former SR drug dealers.

[srgkrgkj]

found a good article on it so far http://www.btcfeed.net/news/bitstamp/

[CoinCidental]

i dont think a chinese exchange would have any qualms about accepting a load of stolen coins
if there was a profit involved

and good luck taking them to court if they ever did but its more likley the coins will be sold off
a little at a time and there will ne punishment for the hacker as usual ............

[dinofelis]

No it should not, bitcoin is perfectly fine as it is. Protip: You could always buy darkcoins, mix there, then move back into BTC.

The point is that if the protocol allows for coins not to be fungible (that is, to taint certain coins), and the axiom is trustlessness, then one cannot ask for a "gentleman's agreement" not to consider coins tainted.  If fungible coins are demanded, it should be imposed by the protocol, and not rest upon the trust in an agreement.  Otherwise, there's no point in having a cryptocurrency at all.

[dnaleor]

I think that "mixing" like with Darkcoin (although that system is far from perfect too, as it requires trust to the mixing nodes) should somehow be implemented in bitcoin if that is still possible.

or just use the "off the shelf privacy" that Monero offers

[celebreze32]

If I were the hacker, I wouldn't try to sell the tumbled coins on an exchange (with KYC) for quite some time, too risky.
Instead, I would send them to multiple altcoin exchanges (that have no KYC) and pump up some less traceable alts.
Another possibility is to sell some of the tumbled BTC to fences on localbitcoins.

I suspect some huge pumps of totally shit coins last year were due to someone laundering stolen bitcoins. Maybe we have a new incoming shit coin pump.

[Q7]

And currently left with only 89 btc to keep as a memorabilia. And I wonder if all those will be emptied out by tomorrow. Any who are the persons buying all the coins? I wonder.

[coinableS]

If these coins get marked or tainted or blacklisted or whatever I'm 100% out of BTC. I will have lost faith in the protocol and design of what it is supposed to be. Why don't we start blacklisting all coins that have been invloved in illegal gambling as well? Who knows where this would stop, every last coin will be tainted.

[Asrael999]

wtf you guys.  I can't believe you're talking about blacklisting these coins, as if that would be a good thing. No.

That would be one giant leap toward the traditional banking cartel. When you receive payment for something, do you want to have to check to see if any of those bits you got were from these stolen coins (or the thousands of others)? Were they within a couple transactions of these coins? Comb the entire transaction history to make sure they are not blacklisted somewhere? That sounds like a huge burden. Are you going to pay to have someone else do that for you? Those are the only 2 choices.

You want every coin to have special rules attached to it? Oh, this coin can't go to Bitstamp, and that one can't go to XXXX. That makes some coins worth more than others, and it means you're taking a risk every time you buy coins which you can't verify the history of. Fungibility is one of the key properties of bitcoin that make it better than the alternatives. You should not throw it away to maybe make this one guy's life more difficult.

Yeah, it sucks that these coins were stolen, and it's looking like the person who perpetrated the act may in fact be a bad guy. But it's time to shift the paradigm folks. These coins were stolen because it was possible to steal them. Bitstamp made that possible. Traditional money services have high fees to cover this shit, and bitcoin has low fees because it's secure, and you don't need to cover this shit if you're transacting properly. If you do something dumb, it's on you, we're not charging the consumers for the mistakes and inefficiencies of the money transmitters anymore. That's the point of bitcoin.

Bitstamp is in the process of rewriting their entire system from the ground up, to prevent this sort of thing happening again. Can you imagine Visa doing this after the Target hack? No, they keep doing the same thing, because you guys keep paying for their losses. There's no point in them changing anything. Bitstamp had suck ass security, a hacker fined them 5 million dollars for it. Their security (supposedly) will improve as a result. Gox died as a result, and we'd all have been better off if it happened way sooner than it did. Incompetence is not an option in this space, unless you have a shit ton of money to burn.

quite agree. its great the coins can be tracked, and this can probably help in tracing and capturing and bring to justice the perpetrators. traditional law enforcement should enforce the law.

in the meantime bitcoin should just carry on being bitcoin and not be concerned about who owns what coins and whether one coin is any less valid than any other.

In the real (non virtual) world receiving stolen goods is a crime whether you know the goods are stolen or not, (the goods in question can be banknotes) - if bitcoin can be classified as goods and if the coins can be traced back through the blockchain to the point where they were stolen then they could quite legally be subject to seizure and returned to their original owner in the UK. To avoid this happening to unsuspecting individuals they would need to be temporarily marked until such time until they were received by the original owner when such mark could be removed.

[B.A.S.]

In the real (non virtual) world receiving stolen goods is a crime whether you know the goods are stolen or not, (the goods in question can be banknotes) - if bitcoin can be classified as goods and if the coins can be traced back through the blockchain to the point where they were stolen then they could quite legally be subject to seizure and returned to their original owner in the UK. To avoid this happening to unsuspecting individuals they would need to be temporarily marked until such time until they were received by the original owner when such mark could be removed.

That is quite interesting, specifically when in comparison to the US. Here, possession/receiving stolen goods is a burden of proof placed on the state before any charges can be brought against the receiver who unknowingly received the stolen goods.

Of course, the unaware citizen must truly be unaware (able to defense his position if called upon in court), but the mere possession of stolen property (given it truly is) is not technically illegal if the one who possesses it did not know.