Silk Road forums

Discussion => Security => Topic started by: cacoethes on May 03, 2012, 09:09 pm

Title: The final step in the block chain?
Post by: cacoethes on May 03, 2012, 09:09 pm
This topic http://dkn255hz262ypmii.onion/index.php?topic=21446.0 has got me wondering...

What is the realistic limit a vendor can acheive on Silk Road, or more to the point, a vendor selling illegal products?

At some point, all those bitcoins have to be converted into some form of currency that's accepted everywhere, whether it be USD or IQD., and there are't that many legitimate exchanges one can use.  Eventually, it must be converted into some sort of declared income, and taxed.

Or laundered in some manner I haven't even considered.  It's an aspect of bitcoin I'd really like to know more about.
Title: Re: The final step in the block chain?
Post by: genghar on May 03, 2012, 10:19 pm
Are you a cop?  You know you have to tell me if I ask.
Title: Re: The final step in the block chain?
Post by: pine on May 03, 2012, 11:21 pm
All that stuff is secret sauce. ;-)

Edit: But to be more helpful, the answer is that there is bitcoin laundering, and then there is RL laundering. It's an entire field of expertise. There isn't really a ten step program that captures it all.

Some generic titbits of interest:

Ignoring legalities, the only real limit on how much money you can make is the size of the entire bitcoin economy, to be exact the no. of people willing to exchange regular currencies for bitcoins. As I said before, the Silk Road has a perfect relationship between supply and demand. All buyers want bitcoins and all sellers want regular currencies, it is matched exactly. For the SR vendor exchanges serve as a conduit of convenience and liquidity, but that's far more important for buyers than sellers.

One of the beautiful facets of Bitcoin, is that you can potentially make it so that it's impossible to seize as proceeds from crime, that might sound strange at first, because most people imagine if LE had your private key then they'd have your money, but again that's an entire topic in of itself.

The strength of the Bitcoin's anonymity lies exclusively in the fact there is no identity associated with them, unless you go and put your name on them by doing something foolish like paying with a credit card and sending the bitcoins directly to your SR wallet and SR gets compromised. Any breakage in the identity chain, means there is no longer a direct chain of evidence, only probabilities. These probabilities get increasing worse the more transactions that occur with that bitcoin if you cannot be shown to have control over those transactions. That is the rationale behind mixes. If you then pop that bitcoin back to an old address, you spent that time and money for nothing.

Converting bitcoin to real currency without raising red flags is easy. Turning bitcoin into cash is also relatively easy. There might be caveats, but conceptually this will always be easy to do. Getting the real currency back into the bank... Now that's more of a challenge. There's an infinite number of ways to do it and it is entirely outside of this economy's domain. Simply use a search engine for money laundering. I recommend using regressive planning.

P.S. This is where the smart vendor is most likely to get caught, hence the secret sauce.
Title: Re: The final step in the block chain?
Post by: cacoethes on May 04, 2012, 01:16 am
Are you a cop?  You know you have to tell me if I ask.

I am indeed, lol.  It's amazing how quickly you spotted me!  Hey wait a minute, are you really Mister Dank?  Eeee?  TBBSecurity?  Those guys have the most amazing intuition...  In spite of my envy, I'm trying so hard to not hate.


All that stuff is secret sauce. ;-)

Awww, Pine, c'mon.  I'm not asking for details into trade secrets, or anything like that.  I'm just kind of curious as to what it takes to turn a serious chunk of coin into a legitimate asset when the source of the coin itself is not legit.  A completely fictitious example would suffice.

Cash is cash...  But what can be purchased with BTC?
Title: Re: The final step in the block chain?
Post by: Limetless on May 04, 2012, 01:22 am
I'm not asking for details into trade secrets, or anything like that.  I'm just kind of curious as to what it takes to turn a serious chunk of coin into a legitimate asset when the source of the coin itself is not legit.  A completely fictitious example would suffice.

You can't give examples without giving away how it's done properly.
Title: Re: The final step in the block chain?
Post by: cacoethes on May 04, 2012, 02:25 am
I'm not asking for details into trade secrets, or anything like that.  I'm just kind of curious as to what it takes to turn a serious chunk of coin into a legitimate asset when the source of the coin itself is not legit.  A completely fictitious example would suffice.

You can't give examples without giving away how it's done properly.

Sigh.  Shipping and packaging can be discussed without revealing specifics, didn't figure this would be any different.  I still think it would be an interesting discussion.  I respect the desire to protect one's livelihood, however.

Any non-vendors with some novel ideas?
Title: Re: The final step in the block chain?
Post by: echo_ on May 04, 2012, 02:33 am
Coin is coin. You can buy gold, silver, federal currency, and any physical object on the Road with it to trade IRL underground.
Title: Re: The final step in the block chain?
Post by: cacoethes on May 04, 2012, 02:50 am
Buy/exchange for valuable commodities...  I was thinking along those lines, but I never really looked at the buying power of btc beyond Silk Road.  I should have just researched this myself instead of asking in a forum where people actually do have to protect their trade secrets.

Sorry, guys and gals.  I can UTFSE as well as anyone.
Title: Re: The final step in the block chain?
Post by: kmfkewm on May 04, 2012, 05:39 am
Step One: Use a mix so the coins can't be tied to any specific drug deal by the time you cash them out

Step Two: Use anonymous ATM cards to cash them out so you don't need to explain the $100,000's that just landed in your bank account. I am pretty sure some of the cards can cash out $1,000 a day so get 100 of them and you could technically cash out 100k in a day :P, one vendor I know has like 8 of them all anonymous so thats ~$56,000 a week in cash out potential with none of it tied to a IRL identity other than the fake / stolen ones used to obtain the cards.

Another option is mix + cash out to western union and pick up with a fake ID

Another option is mix + cash out to another E-currency like pecunix or LR, lots of exchangers for those will cash out to WU for you plus it adds another layer of obfuscation. I still have yet to hear of anyone who uses pecunix + offshore exchangers being traced via a financial trail , it isn't bulletproof by any means but it is still a lot better than paypal, the pigs will need to get records from pecunix + records from the exchanger and that usually involves two different international jurisdictions. Pick the exchangers wire up with a fake ID and it makes it all the harder, now it takes three international jurisdictions and they will end up at a dead end with nothing but CCTV footage if they are lucky.
 
There are two distinct goals, the first is to avoid being traced via a financial trail. Correctly implemented and heavily used mixes do an excellent job of achieving this, better than anything else, especially blind mixes. The second goal is to avoid having unaccounted for money showing up under your name, and risking money laundering charges by being tied to a mix. This can be achieved in a few ways, anonymous ATM cards, anonymous / fake ID wire pick ups , layering traditional E-currency accounts / exchangers in between your bank account and the mix (less secure than the other options but better than nothing, also only good for hiding that you used a mixing service not from hiding that you obtained money) etc. 

Doing either of these things is good and some of them actually help achieve both goals (for example, cashing out with an anonymous ATM will help avoid you being traced through financial trails and it also hides that you obtained money, even if you don't use a mix or anything else), but using both sorts of technique together means you are golden.

What you don't want to be doing is cashing in via a bank account under your own name, using your real IP address at the exchanger, and then sending the bitcoins right to a vendor without mixing them. You also don't want to be taking your coins from SR and then with your real IP address making a deal with an exchanger to get money in your real bank account for them. Doing that is hardly better than using Paypal, although as long as you bounce Bitcoins around a few accounts that are not linked on the network layer you should obtain plausible deniability in an evidence context, but that does fuck all at preventing intelligence from indicating your involvement.
Title: Re: The final step in the block chain?
Post by: cacoethes on May 04, 2012, 02:44 pm
Thank you, kmfkewm. +1!

Not only was that information helpful in and of itself, but it gave me some ideas to research further.
Title: Re: The final step in the block chain?
Post by: genghar on May 04, 2012, 04:20 pm
Are you a cop?  You know you have to tell me if I ask.

I am indeed, lol.  It's amazing how quickly you spotted me!  Hey wait a minute, are you really Mister Dank?  Eeee?  TBBSecurity?  Those guys have the most amazing intuition...  In spite of my envy, I'm trying so hard to not hate.

I love that troll!  Most entertaining part of the forum.
Title: Re: The final step in the block chain?
Post by: Limetless on May 04, 2012, 04:25 pm
Step One: Use a mix so the coins can't be tied to any specific drug deal by the time you cash them out

Step Two: Use anonymous ATM cards to cash them out so you don't need to explain the $100,000's that just landed in your bank account. I am pretty sure some of the cards can cash out $1,000 a day so get 100 of them and you could technically cash out 100k in a day :P, one vendor I know has like 8 of them all anonymous so thats ~$56,000 a week in cash out potential with none of it tied to a IRL identity other than the fake / stolen ones used to obtain the cards.

Another option is mix + cash out to western union and pick up with a fake ID

Another option is mix + cash out to another E-currency like pecunix or LR, lots of exchangers for those will cash out to WU for you plus it adds another layer of obfuscation. I still have yet to hear of anyone who uses pecunix + offshore exchangers being traced via a financial trail , it isn't bulletproof by any means but it is still a lot better than paypal, the pigs will need to get records from pecunix + records from the exchanger and that usually involves two different international jurisdictions. Pick the exchangers wire up with a fake ID and it makes it all the harder, now it takes three international jurisdictions and they will end up at a dead end with nothing but CCTV footage if they are lucky.
 
There are two distinct goals, the first is to avoid being traced via a financial trail. Correctly implemented and heavily used mixes do an excellent job of achieving this, better than anything else, especially blind mixes. The second goal is to avoid having unaccounted for money showing up under your name, and risking money laundering charges by being tied to a mix. This can be achieved in a few ways, anonymous ATM cards, anonymous / fake ID wire pick ups , layering traditional E-currency accounts / exchangers in between your bank account and the mix (less secure than the other options but better than nothing, also only good for hiding that you used a mixing service not from hiding that you obtained money) etc. 

Doing either of these things is good and some of them actually help achieve both goals (for example, cashing out with an anonymous ATM will help avoid you being traced through financial trails and it also hides that you obtained money, even if you don't use a mix or anything else), but using both sorts of technique together means you are golden.

What you don't want to be doing is cashing in via a bank account under your own name, using your real IP address at the exchanger, and then sending the bitcoins right to a vendor without mixing them. You also don't want to be taking your coins from SR and then with your real IP address making a deal with an exchanger to get money in your real bank account for them. Doing that is hardly better than using Paypal, although as long as you bounce Bitcoins around a few accounts that are not linked on the network layer you should obtain plausible deniability in an evidence context, but that does fuck all at preventing intelligence from indicating your involvement.

Putting anything into Western Union is suicide because at some point you have to pick it up. Doesn't mean shit if you use a false name because if LE become alerted to you they can pick up your face on cameras. Anonymous debit cards are the same because the vast majority of ATMs have cameras in them so again, there is your face.

If you want to cash out large amounts you need to get a bit more creative than this I'm afraid. If you really want to do it you should never have to physically touch the money or touch something that you have to withdraw the money out on. And fuck me sideways you should NEVER keep your money in the country you live in.

Not trying to rain on your parade here by the way Kmfkewm, your methods above WOULD work for a while but are just too insecure to do large transactions repeatedly over a long period. You need to think outside the box a bit more to do this.

Also you have failed to achieve the fundamental goal, you haven't actually washed any money yet. All you have done is done a few hard-to-trace transfers. What happens if the pigs kick in the door and you have great wedges of cash lying around that you can't explain? You can't tell them you won the lottery or had a good night down the betting shop.
Title: Re: The final step in the block chain?
Post by: jazzanova on May 04, 2012, 04:56 pm
@ Limetless and kmfkewm.
Very interesting stuff. Laundering your cash IRL is a real bitch, unless your a "proper organized criminal". I've got a few mates who have struggled with this over time. Changes things all of a sudden from selling some drugs, to selling some drugs and also starting some sort of front company. These front companies can often upset local economies by being able to provide services  and goods at uncompetable prices.
Become a furniture dealer, buy cheap shit from charity shops, "refurbish it" and then sell it cash to someone. This can be done from a rented storage container, no need to buy/ rent a shop. You will pay tax, but that seems pretty hard to avoid if you want it in your account and clean.
Sorry for veering a bit OT there ::)..

Jazzanova
Title: Re: The final step in the block chain?
Post by: Limetless on May 04, 2012, 05:12 pm
@ Limetless and kmfkewm.
Very interesting stuff. Laundering your cash IRL is a real bitch, unless your a "proper organized criminal". I've got a few mates who have struggled with this over time. Changes things all of a sudden from selling some drugs, to selling some drugs and also starting some sort of front company. These front companies can often upset local economies by being able to provide services  and goods at uncompetable prices.
Become a furniture dealer, buy cheap shit from charity shops, "refurbish it" and then sell it cash to someone. This can be done from a rented storage container, no need to buy/ rent a shop. You will pay tax, but that seems pretty hard to avoid if you want it in your account and clean.
Sorry for veering a bit OT there ::)..

Jazzanova

Lol paying tax is optional as well, you just have to know how it's done. If you are an IRL crim then laundering funds is much harder than on here. I work both online and IRL so my structure is developed to be able to absorb both.

Also the furniture thing is see-through, shit like that is what expert witnesses are for that can give opinions to prosecutors whether the business is ACTUALLY trading legitimately. Again you have to think outside the box a bit more. :)
Title: Re: The final step in the block chain?
Post by: vlad1m1r on May 04, 2012, 07:02 pm
@ Limetless and kmfkewm.
Very interesting stuff. Laundering your cash IRL is a real bitch, unless your a "proper organized criminal". I've got a few mates who have struggled with this over time. Changes things all of a sudden from selling some drugs, to selling some drugs and also starting some sort of front company. These front companies can often upset local economies by being able to provide services  and goods at uncompetable prices.
Become a furniture dealer, buy cheap shit from charity shops, "refurbish it" and then sell it cash to someone. This can be done from a rented storage container, no need to buy/ rent a shop. You will pay tax, but that seems pretty hard to avoid if you want it in your account and clean.
Sorry for veering a bit OT there ::)..

Jazzanova

Lol paying tax is optional as well, you just have to know how it's done. If you are an IRL crim then laundering funds is much harder than on here. I work both online and IRL so my structure is developed to be able to absorb both.

Also the furniture thing is see-through, shit like that is what expert witnesses are for that can give opinions to prosecutors whether the business is ACTUALLY trading legitimately. Again you have to think outside the box a bit more. :)

As LImetless says, I'm afraid this would have little chance of succeeding as the auditors would quickly discover that despite prevailing conditions, the shop would be ticking over at a nice regular profit and they might also ask awkward questions about the start up capital for the business.

It would be unfair to people like Lim to mention any of the methods used in great detail, especially as I employ them to launder clients' BTC to invest in Hedge Funds where I work but suffice it to say that there are indeed ways to salt away large sums with minimal questions asked - fortunately not every jurisdiction has such onerous KYC requirements as the US & UK.

V.
Title: Re: The final step in the block chain?
Post by: Limetless on May 04, 2012, 07:13 pm
@ Limetless and kmfkewm.
Very interesting stuff. Laundering your cash IRL is a real bitch, unless your a "proper organized criminal". I've got a few mates who have struggled with this over time. Changes things all of a sudden from selling some drugs, to selling some drugs and also starting some sort of front company. These front companies can often upset local economies by being able to provide services  and goods at uncompetable prices.
Become a furniture dealer, buy cheap shit from charity shops, "refurbish it" and then sell it cash to someone. This can be done from a rented storage container, no need to buy/ rent a shop. You will pay tax, but that seems pretty hard to avoid if you want it in your account and clean.
Sorry for veering a bit OT there ::)..

Jazzanova

Lol paying tax is optional as well, you just have to know how it's done. If you are an IRL crim then laundering funds is much harder than on here. I work both online and IRL so my structure is developed to be able to absorb both.

Also the furniture thing is see-through, shit like that is what expert witnesses are for that can give opinions to prosecutors whether the business is ACTUALLY trading legitimately. Again you have to think outside the box a bit more. :)

As LImetless says, I'm afraid this would have little chance of succeeding as the auditors would quickly discover that despite prevailing conditions, the shop would be ticking over at a nice regular profit and they might also ask awkward questions about the start up capital for the business.

It would be unfair to people like Lim to mention any of the methods used in great detail, especially as I employ them to launder clients' BTC to invest in Hedge Funds where I work but suffice it to say that there are indeed ways to salt away large sums with minimal questions asked - fortunately not every jurisdiction has such onerous KYC requirements as the US & UK.

V.

Haha I think you and I are on the same page Vlad1m1r. It's nice to see someone who knows how to get shit done! ;)
Title: Re: The final step in the block chain?
Post by: vlad1m1r on May 04, 2012, 07:25 pm
@ Limetless and kmfkewm.
Very interesting stuff. Laundering your cash IRL is a real bitch, unless your a "proper organized criminal". I've got a few mates who have struggled with this over time. Changes things all of a sudden from selling some drugs, to selling some drugs and also starting some sort of front company. These front companies can often upset local economies by being able to provide services  and goods at uncompetable prices.
Become a furniture dealer, buy cheap shit from charity shops, "refurbish it" and then sell it cash to someone. This can be done from a rented storage container, no need to buy/ rent a shop. You will pay tax, but that seems pretty hard to avoid if you want it in your account and clean.
Sorry for veering a bit OT there ::)..

Jazzanova

Lol paying tax is optional as well, you just have to know how it's done. If you are an IRL crim then laundering funds is much harder than on here. I work both online and IRL so my structure is developed to be able to absorb both.

Also the furniture thing is see-through, shit like that is what expert witnesses are for that can give opinions to prosecutors whether the business is ACTUALLY trading legitimately. Again you have to think outside the box a bit more. :)

As LImetless says, I'm afraid this would have little chance of succeeding as the auditors would quickly discover that despite prevailing conditions, the shop would be ticking over at a nice regular profit and they might also ask awkward questions about the start up capital for the business.

It would be unfair to people like Lim to mention any of the methods used in great detail, especially as I employ them to launder clients' BTC to invest in Hedge Funds where I work but suffice it to say that there are indeed ways to salt away large sums with minimal questions asked - fortunately not every jurisdiction has such onerous KYC requirements as the US & UK.

V.

Haha I think you and I are on the same page Vlad1m1r. It's nice to see someone who knows how to get shit done! ;)

Karma to you mate!

V.
Title: Re: The final step in the block chain?
Post by: Limetless on May 04, 2012, 07:36 pm
Cheers mate. ;)

Title: Re: The final step in the block chain?
Post by: cacoethes on May 05, 2012, 12:05 am
Makes me happy I'm only a buyer.  It's quite enough for me to worry about obtaining and spending btc anonymously...  Converting large sums of them into legitimate assets is something I'm perfectly happy to leave to the more motivated among you.  My interest is based on idle curiosity, and the desire to understand the bitcoin economy as a whole...

As long as I can spend them here on the things I enjoy, I'm perfectly happy with my day job. :)
Title: Re: The final step in the block chain?
Post by: kmfkewm on May 05, 2012, 09:09 am
Step One: Use a mix so the coins can't be tied to any specific drug deal by the time you cash them out

Step Two: Use anonymous ATM cards to cash them out so you don't need to explain the $100,000's that just landed in your bank account. I am pretty sure some of the cards can cash out $1,000 a day so get 100 of them and you could technically cash out 100k in a day :P, one vendor I know has like 8 of them all anonymous so thats ~$56,000 a week in cash out potential with none of it tied to a IRL identity other than the fake / stolen ones used to obtain the cards.

Another option is mix + cash out to western union and pick up with a fake ID

Another option is mix + cash out to another E-currency like pecunix or LR, lots of exchangers for those will cash out to WU for you plus it adds another layer of obfuscation. I still have yet to hear of anyone who uses pecunix + offshore exchangers being traced via a financial trail , it isn't bulletproof by any means but it is still a lot better than paypal, the pigs will need to get records from pecunix + records from the exchanger and that usually involves two different international jurisdictions. Pick the exchangers wire up with a fake ID and it makes it all the harder, now it takes three international jurisdictions and they will end up at a dead end with nothing but CCTV footage if they are lucky.
 
There are two distinct goals, the first is to avoid being traced via a financial trail. Correctly implemented and heavily used mixes do an excellent job of achieving this, better than anything else, especially blind mixes. The second goal is to avoid having unaccounted for money showing up under your name, and risking money laundering charges by being tied to a mix. This can be achieved in a few ways, anonymous ATM cards, anonymous / fake ID wire pick ups , layering traditional E-currency accounts / exchangers in between your bank account and the mix (less secure than the other options but better than nothing, also only good for hiding that you used a mixing service not from hiding that you obtained money) etc. 

Doing either of these things is good and some of them actually help achieve both goals (for example, cashing out with an anonymous ATM will help avoid you being traced through financial trails and it also hides that you obtained money, even if you don't use a mix or anything else), but using both sorts of technique together means you are golden.

What you don't want to be doing is cashing in via a bank account under your own name, using your real IP address at the exchanger, and then sending the bitcoins right to a vendor without mixing them. You also don't want to be taking your coins from SR and then with your real IP address making a deal with an exchanger to get money in your real bank account for them. Doing that is hardly better than using Paypal, although as long as you bounce Bitcoins around a few accounts that are not linked on the network layer you should obtain plausible deniability in an evidence context, but that does fuck all at preventing intelligence from indicating your involvement.

Putting anything into Western Union is suicide because at some point you have to pick it up. Doesn't mean shit if you use a false name because if LE become alerted to you they can pick up your face on cameras. Anonymous debit cards are the same because the vast majority of ATMs have cameras in them so again, there is your face.

If you want to cash out large amounts you need to get a bit more creative than this I'm afraid. If you really want to do it you should never have to physically touch the money or touch something that you have to withdraw the money out on. And fuck me sideways you should NEVER keep your money in the country you live in.

Not trying to rain on your parade here by the way Kmfkewm, your methods above WOULD work for a while but are just too insecure to do large transactions repeatedly over a long period. You need to think outside the box a bit more to do this.

Also you have failed to achieve the fundamental goal, you haven't actually washed any money yet. All you have done is done a few hard-to-trace transfers. What happens if the pigs kick in the door and you have great wedges of cash lying around that you can't explain? You can't tell them you won the lottery or had a good night down the betting shop.

Well they have worked for many years for some pretty major vendors so I think that says something. Never touching the money, never touching anything that cashes out the money, that is hardly practical for most people if it is even possible to do and spend money at the same time. The goal is for it to be anonymized by the time you pick it up, and then you pick it up with these methods simply to avoid having it tied to your name, so theoretically law enforcement never gets to the camera and you avoid ever giving them a reason to pull footage of the cash out. There are ways to cash out at ATM without being identifiable though, although some are fairly sketchy in themselves like wearing masks. People get away with robbing people at gun point in front of ATMs though, so its not a stretch to think you can get away with disguising your face for a short period of time while you cash out your own money at one, and again law enforcement are theoretically never going to make it back to the cash out point to pull footage anyway. Western union is much harder to adequately disguise yourself at, but how long these places keep video for varies if you find a place with a 24 hour loop you will be hoping that law enforcement can't get to it before the footage is overwritten or that they never get to it anyway, knowing how long the loop is for is tricky though and these days it isn't expensive to keep months worth of video footage.

I think you are confusing the reason to cash out with an ATM or fake ID wire though, it isn't necessarily to make it harder for you to be traced (although it certainly is beneficial here as well) but rather to make it so there is not a record of you having the money, or you using a mixing service. By the time you cash out it should already be either virtually impossible for LE to follow the financial trial from their dealings with you to your cash out point (as is the case with proper mixes), or at least very difficult (as is the case with multi international jurisdiction layering). But even if it is impossible for them to follow the money from them sending it to you cashing it out, you don't want to suddenly have unaccounted for deposits of thousands of dollars showing up under your name, and you don't want to be tied to a mixing service either if you can help it. That is where the anonymous ATM cards and fake ID for wire pick ups come into play, although they both do also aid in untraceability.

There are two types of money laundering, the first type aims to make transactions untraceable, so law enforcement can not trace their money back to you. The second type aims to disguise illicit profits and licit profits. It can be seen as a multi step process really, since both compliment each other. Mixes make the money untraceable, cashing out with ATM card or WU with fake information takes care of part of the second goal of disguising illicit profits as licit. You can spend quite a bit of cash fairly secretly and never risk being identified as living outside of your means, buying fancy cars and expensive houses and such are a different story though. I know a few techniques for disguising illicit funds as licit, but this is an area where I think it is more important to not discuss the techniques publicly (versus making transactions untraceable to you from LE perspective, and not drawing attention to yourself by suddenly having ten thousand dollars deposited to your bank account straight from bitcoin-money-laundering.org). You will likely need to have a legitimate front business to pull this off for large amounts, is the most that I will say on the matter. And again, you don't need to legitimize all of your money, if you spend a hundred bucks eating at a fancy restaurant there is no need to spend clean money that you paid taxes on.

Some people employ bums or kids to do cash out for them and then they get the cash handed to them in a location that isn't under surveillance, then pay them like a hundred bucks for their trouble (assuming they hit the maximum limit on a bunch of anonymous debit cards or something, to make it affordable). This risks being robbed, but they have tricks to make this unlikely as well. This has always seemed too exploitative for my tastes though.
Title: Re: The final step in the block chain?
Post by: Limetless on May 05, 2012, 11:27 am
Step One: Use a mix so the coins can't be tied to any specific drug deal by the time you cash them out

Step Two: Use anonymous ATM cards to cash them out so you don't need to explain the $100,000's that just landed in your bank account. I am pretty sure some of the cards can cash out $1,000 a day so get 100 of them and you could technically cash out 100k in a day :P, one vendor I know has like 8 of them all anonymous so thats ~$56,000 a week in cash out potential with none of it tied to a IRL identity other than the fake / stolen ones used to obtain the cards.

Another option is mix + cash out to western union and pick up with a fake ID

Another option is mix + cash out to another E-currency like pecunix or LR, lots of exchangers for those will cash out to WU for you plus it adds another layer of obfuscation. I still have yet to hear of anyone who uses pecunix + offshore exchangers being traced via a financial trail , it isn't bulletproof by any means but it is still a lot better than paypal, the pigs will need to get records from pecunix + records from the exchanger and that usually involves two different international jurisdictions. Pick the exchangers wire up with a fake ID and it makes it all the harder, now it takes three international jurisdictions and they will end up at a dead end with nothing but CCTV footage if they are lucky.
 
There are two distinct goals, the first is to avoid being traced via a financial trail. Correctly implemented and heavily used mixes do an excellent job of achieving this, better than anything else, especially blind mixes. The second goal is to avoid having unaccounted for money showing up under your name, and risking money laundering charges by being tied to a mix. This can be achieved in a few ways, anonymous ATM cards, anonymous / fake ID wire pick ups , layering traditional E-currency accounts / exchangers in between your bank account and the mix (less secure than the other options but better than nothing, also only good for hiding that you used a mixing service not from hiding that you obtained money) etc. 

Doing either of these things is good and some of them actually help achieve both goals (for example, cashing out with an anonymous ATM will help avoid you being traced through financial trails and it also hides that you obtained money, even if you don't use a mix or anything else), but using both sorts of technique together means you are golden.

What you don't want to be doing is cashing in via a bank account under your own name, using your real IP address at the exchanger, and then sending the bitcoins right to a vendor without mixing them. You also don't want to be taking your coins from SR and then with your real IP address making a deal with an exchanger to get money in your real bank account for them. Doing that is hardly better than using Paypal, although as long as you bounce Bitcoins around a few accounts that are not linked on the network layer you should obtain plausible deniability in an evidence context, but that does fuck all at preventing intelligence from indicating your involvement.

Putting anything into Western Union is suicide because at some point you have to pick it up. Doesn't mean shit if you use a false name because if LE become alerted to you they can pick up your face on cameras. Anonymous debit cards are the same because the vast majority of ATMs have cameras in them so again, there is your face.

If you want to cash out large amounts you need to get a bit more creative than this I'm afraid. If you really want to do it you should never have to physically touch the money or touch something that you have to withdraw the money out on. And fuck me sideways you should NEVER keep your money in the country you live in.

Not trying to rain on your parade here by the way Kmfkewm, your methods above WOULD work for a while but are just too insecure to do large transactions repeatedly over a long period. You need to think outside the box a bit more to do this.

Also you have failed to achieve the fundamental goal, you haven't actually washed any money yet. All you have done is done a few hard-to-trace transfers. What happens if the pigs kick in the door and you have great wedges of cash lying around that you can't explain? You can't tell them you won the lottery or had a good night down the betting shop.

Well they have worked for many years for some pretty major vendors so I think that says something. Never touching the money, never touching anything that cashes out the money, that is hardly practical for most people if it is even possible to do and spend money at the same time. The goal is for it to be anonymized by the time you pick it up, and then you pick it up with these methods simply to avoid having it tied to your name, so theoretically law enforcement never gets to the camera and you avoid ever giving them a reason to pull footage of the cash out. There are ways to cash out at ATM without being identifiable though, although some are fairly sketchy in themselves like wearing masks. People get away with robbing people at gun point in front of ATMs though, so its not a stretch to think you can get away with disguising your face for a short period of time while you cash out your own money at one, and again law enforcement are theoretically never going to make it back to the cash out point to pull footage anyway. Western union is much harder to adequately disguise yourself at, but how long these places keep video for varies if you find a place with a 24 hour loop you will be hoping that law enforcement can't get to it before the footage is overwritten or that they never get to it anyway, knowing how long the loop is for is tricky though and these days it isn't expensive to keep months worth of video footage.

I think you are confusing the reason to cash out with an ATM or fake ID wire though, it isn't necessarily to make it harder for you to be traced (although it certainly is beneficial here as well) but rather to make it so there is not a record of you having the money, or you using a mixing service. By the time you cash out it should already be either virtually impossible for LE to follow the financial trial from their dealings with you to your cash out point (as is the case with proper mixes), or at least very difficult (as is the case with multi international jurisdiction layering). But even if it is impossible for them to follow the money from them sending it to you cashing it out, you don't want to suddenly have unaccounted for deposits of thousands of dollars showing up under your name, and you don't want to be tied to a mixing service either if you can help it. That is where the anonymous ATM cards and fake ID for wire pick ups come into play, although they both do also aid in untraceability.

There are two types of money laundering, the first type aims to make transactions untraceable, so law enforcement can not trace their money back to you. The second type aims to disguise illicit profits and licit profits. It can be seen as a multi step process really, since both compliment each other. Mixes make the money untraceable, cashing out with ATM card or WU with fake information takes care of part of the second goal of disguising illicit profits as licit. You can spend quite a bit of cash fairly secretly and never risk being identified as living outside of your means, buying fancy cars and expensive houses and such are a different story though. I know a few techniques for disguising illicit funds as licit, but this is an area where I think it is more important to not discuss the techniques publicly (versus making transactions untraceable to you from LE perspective, and not drawing attention to yourself by suddenly having ten thousand dollars deposited to your bank account straight from bitcoin-money-laundering.org). You will likely need to have a legitimate front business to pull this off for large amounts, is the most that I will say on the matter. And again, you don't need to legitimize all of your money, if you spend a hundred bucks eating at a fancy restaurant there is no need to spend clean money that you paid taxes on.

Some people employ bums or kids to do cash out for them and then they get the cash handed to them in a location that isn't under surveillance, then pay them like a hundred bucks for their trouble (assuming they hit the maximum limit on a bunch of anonymous debit cards or something, to make it affordable). This risks being robbed, but they have tricks to make this unlikely as well. This has always seemed too exploitative for my tastes though.

No offense here but you don't need to try and school me on what I know inside out mate especially when it comes to ML. I trained as an accountant and have done corporate structuring IRL so I do know my shit. And I really don't care if it has worked for other people, doesn't mean it's the most secure and by that logic you are basically saying that nothing can ever be bettered? What kind of silly standing point is that? It's ridiculous.

And also cashing out at WU or a cash machine doesn't wash money at all because you can't account for where it originated from. That's all there is to it. With my system you create accountability that properly washes funds and takes them out of the system and makes it exempt from audit. Nothing that you have suggested actually achieves this.

Also hiring kids and bums? Are you kidding me?
Title: Re: The final step in the block chain?
Post by: vlad1m1r on May 05, 2012, 12:01 pm
Step One: Use a mix so the coins can't be tied to any specific drug deal by the time you cash them out

Step Two: Use anonymous ATM cards to cash them out so you don't need to explain the $100,000's that just landed in your bank account. I am pretty sure some of the cards can cash out $1,000 a day so get 100 of them and you could technically cash out 100k in a day :P, one vendor I know has like 8 of them all anonymous so thats ~$56,000 a week in cash out potential with none of it tied to a IRL identity other than the fake / stolen ones used to obtain the cards.

Another option is mix + cash out to western union and pick up with a fake ID

Another option is mix + cash out to another E-currency like pecunix or LR, lots of exchangers for those will cash out to WU for you plus it adds another layer of obfuscation. I still have yet to hear of anyone who uses pecunix + offshore exchangers being traced via a financial trail , it isn't bulletproof by any means but it is still a lot better than paypal, the pigs will need to get records from pecunix + records from the exchanger and that usually involves two different international jurisdictions. Pick the exchangers wire up with a fake ID and it makes it all the harder, now it takes three international jurisdictions and they will end up at a dead end with nothing but CCTV footage if they are lucky.
 
There are two distinct goals, the first is to avoid being traced via a financial trail. Correctly implemented and heavily used mixes do an excellent job of achieving this, better than anything else, especially blind mixes. The second goal is to avoid having unaccounted for money showing up under your name, and risking money laundering charges by being tied to a mix. This can be achieved in a few ways, anonymous ATM cards, anonymous / fake ID wire pick ups , layering traditional E-currency accounts / exchangers in between your bank account and the mix (less secure than the other options but better than nothing, also only good for hiding that you used a mixing service not from hiding that you obtained money) etc. 

Doing either of these things is good and some of them actually help achieve both goals (for example, cashing out with an anonymous ATM will help avoid you being traced through financial trails and it also hides that you obtained money, even if you don't use a mix or anything else), but using both sorts of technique together means you are golden.

What you don't want to be doing is cashing in via a bank account under your own name, using your real IP address at the exchanger, and then sending the bitcoins right to a vendor without mixing them. You also don't want to be taking your coins from SR and then with your real IP address making a deal with an exchanger to get money in your real bank account for them. Doing that is hardly better than using Paypal, although as long as you bounce Bitcoins around a few accounts that are not linked on the network layer you should obtain plausible deniability in an evidence context, but that does fuck all at preventing intelligence from indicating your involvement.

Putting anything into Western Union is suicide because at some point you have to pick it up. Doesn't mean shit if you use a false name because if LE become alerted to you they can pick up your face on cameras. Anonymous debit cards are the same because the vast majority of ATMs have cameras in them so again, there is your face.

If you want to cash out large amounts you need to get a bit more creative than this I'm afraid. If you really want to do it you should never have to physically touch the money or touch something that you have to withdraw the money out on. And fuck me sideways you should NEVER keep your money in the country you live in.

Not trying to rain on your parade here by the way Kmfkewm, your methods above WOULD work for a while but are just too insecure to do large transactions repeatedly over a long period. You need to think outside the box a bit more to do this.

Also you have failed to achieve the fundamental goal, you haven't actually washed any money yet. All you have done is done a few hard-to-trace transfers. What happens if the pigs kick in the door and you have great wedges of cash lying around that you can't explain? You can't tell them you won the lottery or had a good night down the betting shop.

Well they have worked for many years for some pretty major vendors so I think that says something. Never touching the money, never touching anything that cashes out the money, that is hardly practical for most people if it is even possible to do and spend money at the same time. The goal is for it to be anonymized by the time you pick it up, and then you pick it up with these methods simply to avoid having it tied to your name, so theoretically law enforcement never gets to the camera and you avoid ever giving them a reason to pull footage of the cash out. There are ways to cash out at ATM without being identifiable though, although some are fairly sketchy in themselves like wearing masks. People get away with robbing people at gun point in front of ATMs though, so its not a stretch to think you can get away with disguising your face for a short period of time while you cash out your own money at one, and again law enforcement are theoretically never going to make it back to the cash out point to pull footage anyway. Western union is much harder to adequately disguise yourself at, but how long these places keep video for varies if you find a place with a 24 hour loop you will be hoping that law enforcement can't get to it before the footage is overwritten or that they never get to it anyway, knowing how long the loop is for is tricky though and these days it isn't expensive to keep months worth of video footage.

I think you are confusing the reason to cash out with an ATM or fake ID wire though, it isn't necessarily to make it harder for you to be traced (although it certainly is beneficial here as well) but rather to make it so there is not a record of you having the money, or you using a mixing service. By the time you cash out it should already be either virtually impossible for LE to follow the financial trial from their dealings with you to your cash out point (as is the case with proper mixes), or at least very difficult (as is the case with multi international jurisdiction layering). But even if it is impossible for them to follow the money from them sending it to you cashing it out, you don't want to suddenly have unaccounted for deposits of thousands of dollars showing up under your name, and you don't want to be tied to a mixing service either if you can help it. That is where the anonymous ATM cards and fake ID for wire pick ups come into play, although they both do also aid in untraceability.

There are two types of money laundering, the first type aims to make transactions untraceable, so law enforcement can not trace their money back to you. The second type aims to disguise illicit profits and licit profits. It can be seen as a multi step process really, since both compliment each other. Mixes make the money untraceable, cashing out with ATM card or WU with fake information takes care of part of the second goal of disguising illicit profits as licit. You can spend quite a bit of cash fairly secretly and never risk being identified as living outside of your means, buying fancy cars and expensive houses and such are a different story though. I know a few techniques for disguising illicit funds as licit, but this is an area where I think it is more important to not discuss the techniques publicly (versus making transactions untraceable to you from LE perspective, and not drawing attention to yourself by suddenly having ten thousand dollars deposited to your bank account straight from bitcoin-money-laundering.org). You will likely need to have a legitimate front business to pull this off for large amounts, is the most that I will say on the matter. And again, you don't need to legitimize all of your money, if you spend a hundred bucks eating at a fancy restaurant there is no need to spend clean money that you paid taxes on.

Some people employ bums or kids to do cash out for them and then they get the cash handed to them in a location that isn't under surveillance, then pay them like a hundred bucks for their trouble (assuming they hit the maximum limit on a bunch of anonymous debit cards or something, to make it affordable). This risks being robbed, but they have tricks to make this unlikely as well. This has always seemed too exploitative for my tastes though.

No offense here but you don't need to try and school me on what I know inside out mate especially when it comes to ML. I trained as an accountant and have done corporate structuring IRL so I do know my shit. And I really don't care if it has worked for other people, doesn't mean it's the most secure and by that logic you are basically saying that nothing can ever be bettered? What kind of silly standing point is that? It's ridiculous.

And also cashing out at WU or a cash machine doesn't wash money at all because you can't account for where it originated from. That's all there is to it. With my system you create accountability that properly washes funds and takes them out of the system and makes it exempt from audit. Nothing that you have suggested actually achieves this.

Also hiring kids and bums? Are you kidding me?

As much as I welcome everyone's thoughts I have to say Lim has it right - I've worked before with the Financial Services Commission here in the UK (particularly the Isle of Man) and I can tell you that there's no way in which a cash machine can legitimise your funds - of course it can make them easier to conceal but ATM card providers still have to abide by the same compliance methods as any bank so loading £20,000 across three cards can still raise red flags - indeed they're well aware of this loophole and without going into details they are not overly concerned about it for exactly the reasons Lim has said - being caught with several ATM cards in your house with a combined value of twice your annual income on paper is just as incriminating as finding a big pile of cash in your basement.

As kmfkewm says, for smaller amounts this isn't overly important as you can simply use cash for your living expenses and leave your legitimate salary in your bank account (I use this method to pay my rent for instance by depositing cash from various schemes I have on SR) and leaving my whiter than white income untouched.

For larger amounts as Lim says this doesn't amount to money laundering in any sense of the word - indeed in the nature of things laundered money cannot be concealed as it needs to seem legitimate.

Certain businesses lend themselves better than others to be a legitimate front for money laundering but once again I don't really want to discuss my flavour of the month in public - of course anyone who is interested in investing and receiving laundered funds in the UK is welcome to send me a message but please note I only am accepting smaller sums at this stage - any of the major players out there, do speak to Lim - I also work in finance and it's very clear to me he knows his stuff.

V.







Title: Re: The final step in the block chain?
Post by: Limetless on May 05, 2012, 12:46 pm
As I said before Vlad, it's nice to see someone who sees the light in the darkness.
Title: Re: The final step in the block chain?
Post by: kmfkewm on May 05, 2012, 12:49 pm
Where did I ever say that ATM legitimizes your funds? You guys obviously both work in finance because your minds are stuck thinking on one extremely specific model, that's probably an artifact of your line of work. If you think ATM cash outs are only good for small amounts of money you are crazy, cash out teams have taken out millions of dollars in a half an hour before

http://www.dailytech.com/Cyberthieves+Steal+9M+in+Worldwide+ATM+Heist/article14147.htm

Quote
An FBI official told WNYW that a number of unidentified “cashers” – low-level pawns in the overall scheme – hit 130 different ATMs around the world within a 30-minute period, withdrawing roughly $9 million.

not the best example because for one almost all of the cash out people were identified from ATM cameras (they didn't wear disguises) , and for two they had hackers who kept resetting the card limits allowing them to keep cashing out more. But if you have ten cards with a $1,000 a day limit nothing at all is stopping you from cashing out $70,000 in a week, that isn't really small change. And I never said that cashing out at an ATM makes the money legitimized I said it makes it so it doesn't leave a record under your name, versus say cashing it out to your bank account. And using a mix or layering international exchangers makes it so LE will have a hell of a time ever even knowing that they want to pull CCTV footage from your cash out location in the first place, something else that cash out crew didn't have going for them since FBI knew every ATM they withdrew funds from and when.

You are thinking in terms of a very specific type of money laundering and it is making it so you can not see other types, in reality money laundering is a process, you are fixating on one aspect of this process.

And yes people pay bums and kids to do cash out all the time
Title: Re: The final step in the block chain?
Post by: Limetless on May 05, 2012, 01:05 pm
Where did I ever say that ATM legitimizes your funds? You guys obviously both work in finance because your minds are stuck thinking on one extremely specific model, that's probably an artifact of your line of work. If you think ATM cash outs are only good for small amounts of money you are crazy, cash out teams have taken out millions of dollars in a half an hour before

http://www.dailytech.com/Cyberthieves+Steal+9M+in+Worldwide+ATM+Heist/article14147.htm

Quote
An FBI official told WNYW that a number of unidentified “cashers” – low-level pawns in the overall scheme – hit 130 different ATMs around the world within a 30-minute period, withdrawing roughly $9 million.

not the best example because for one almost all of the cash out people were identified from ATM cameras (they didn't wear disguises) , and for two they had hackers who kept resetting the card limits allowing them to keep cashing out more. But if you have ten cards with a $1,000 a day limit nothing at all is stopping you from cashing out $70,000 in a week, that isn't really small change. And I never said that cashing out at an ATM makes the money legitimized I said it makes it so it doesn't leave a record under your name, versus say cashing it out to your bank account. And using a mix or layering international exchangers makes it so LE will have a hell of a time ever even knowing that they want to pull CCTV footage from your cash out location in the first place, something else that cash out crew didn't have going for them since FBI knew every ATM they withdrew funds from and when.

You are thinking in terms of a very specific type of money laundering and it is making it so you can not see other types, in reality money laundering is a process, you are fixating on one aspect of this process.

And yes people pay bums and kids to do cash out all the time

No offense but reading what you are saying is just frustrating me because you are pontificating about something you quite clearly don't fully understand. The bottom line is, what you are suggesting with the ATM method is NOT money laundering, it just a method of facilitating receiving black cash. If you just sat down and listened to what you are being told instead of trying to arguing the toss to not look wrong you might get somewhere.

Just because you have cash and receive it through an ATM and have it in your hand does NOT make it laundered in any way. You are just receiving black and unaccounted for cash. Laundering money IS process yes, well done, correct. But you have to do a lot more than just snag it out of a few ATM and the method after that is HIGHLY dependent on the type of business you are in and the quantities of money you are looking to wash and then re-integrate into a financial system. And no, you are wrong, neither myself or Vlad (it would seem) are focusing on one aspect of this process but what we are saying is that your method of receiving funds is the simple-mans method. I've been doing this for a long time mate and as I said I have worked in accounting/corp structuring and do it freelance now so I really don't need to be schooled by you on a Saturday morning.

I'm not sure if you realize this but the methods you suggest are the ones that get caught out most often which is why that article and others like it are so common. If you do it intelligently, you don't. And there is absolutely no way I would ever use what you have suggested to cash out BTC because one, I like to be able to use the exchanges at will and 2, I don't like the look of prison that much and don't intend to go there.

And yes I know they do, my point is it's a shit way to go about business.
Title: Re: The final step in the block chain?
Post by: kmfkewm on May 05, 2012, 01:30 pm
Really can you show me a link to anyone who has been busted after layering money through multiple e-currency accounts / exchangers or better yet mixes and then cashing out with an anonymous ATM? No you can show me examples of carders who used stolen and exploited cards to drain ATMs, where LE knew to look at CCTV footage and they didn't use any disguise at all. How are you going to get caught when the trail goes absolutely dead at a blind mix? The money taken out of a blind mix can not be tied to who put it in, the money Alice takes out of the mix could have been put in my Bob or Carol or any of the thousand other people who used the mix, and if its a blind mix that will have a cryptographic proof showing that even the mix operator can not link finances in and out. That breaks the link between the coins out of the mix and the path they took prior to the mix, law enforcement can send Alice marked coins and when they get to the mix they have a thousand different potential suspects who all have an equal probability of being Alice.  Alice is well protected from ever being identified as the person LE sent dirty money to (via a financial trace) at this point, her only risk is that she could be identified as using a mix which is suspect in itself. But lo and behold Alice cashed the bitcoins out to another sort of E-currency based offshore, then sold them to an exchanger in Russia for a money wire that she picked up with a fake ID, or to an ATM card she obtained with totally fraudulent documents with no links to her and cashed out at a random ATM with a mask on (not that she needs to wear a mask considering LE will never follow the trail to her cash out point, and the only reason she is using a fake identity to cash out is so she doesn't have a fifty thousand dollar deposit from no where show up in her bank account, I know people who were raided by the IRS because of how many money wires they were sending with their real ID, if they used a bunch of fake IDs to send the payments they would have never been flagged and it would mean fuck all that they were on CCTV because LE never would have known to look for them, unless you are paranoid about facial recognition algorithms and hella advanced surveillance at these places, which I guess is not something to discount entirely from possibility). LE  has no chance in hell of following their marked money to Alice because of the mix and there is no way that Alice is going to be identified as using a mixing service because she layered the finances she got out from the mix through e-currency companies / cashed them out with an ATM card with no ties to her.

Now Alice is left with a chunk of unaccounted for cash and you get to do all of your specialty on it to integrate it back into the economy and make it so Alice can pay taxes on it and make it blend in perfectly with her legitimate income, but its bullshit to claim the process mentioned above is not money laundering just because it doesn't specify integration techniques.
Title: Re: The final step in the block chain?
Post by: kmfkewm on May 05, 2012, 01:59 pm
good reading, "money laundering using new payment methods"

http://www.fatf-gafi.org/media/fatf/documents/reports/ML%20using%20New%20Payment%20Methods.pdf

Quote
Internet payment services are increasingly interconnected with different new and
traditional payment services. Funds can now be moved to or from a variety of payment methods,
ranging from cash, money remittance businesses (e.g., Western Union), NPMs, bank wire transfers, and
credit cards. Furthermore, some IPS providers have started to issue prepaid cards to their customers,
thus granting them access to cash withdrawal through the worldwide ATM networks.

amazingly this report on money laundering is talking about many of the same things I am
Title: Re: The final step in the block chain?
Post by: Limetless on May 05, 2012, 02:09 pm
Yeah lol...those being the ones that are picked up on the most are the ones that get reported on the most. Common-ass-methods. ML is an ever changing thing and rolls as governments implement new laws to try and combat it. Being good is staying ahead of said laws. Who the fuck wants to use methods that are already known? I wouldn't.

Anyway as I have said I am not being taken to school on a Saturday about something I have done for over 5 years professionally by someone who just knows a bit of theory from forums and internet articles. Just isn't going to happen I'm afraid.

Title: Re: The final step in the block chain?
Post by: kmfkewm on May 05, 2012, 02:21 pm
Okay enjoy your security by obscurity
Title: Re: The final step in the block chain?
Post by: kmfkewm on May 05, 2012, 02:34 pm
http://www.innopay.com/content/changing-dynamics-financial-crime-digital-era

Hm this article differentiates by saying that 'criminal money transfer' is the act of Bob anonymously transferring anonymous Alice finances, and 'money laundering' is the act of anonymous Alice making it seem like her anonymously obtained finances come from a legitimate business venture. I would personally call that entire process money laundering though. 

Quote
In general, we can distinguish between three types of financial crime:

    Terrorism financing: obfuscating the source of the money used by terrorist organizations (money in, point A)
    Criminal money transfer: transferring money from point A to B (within the system), preferably untraceably
    Money laundering: obfuscating the destination of the money laundered by criminal organizations (money out, point B)


Also from this article:

Quote
It can be a daunting task for governments to monitor financial crime. The current anti-crime measures are based on the traditional bank networks. However, with the increasing digitalization the money transfers are increasingly harder to follow. Therefore, it remains important to focus on the end points. No matter what, money will always have to enter and exit the system to be of use to the criminal.

This article probably does the best at summing up some of the points I made, though

http://osaka.law.miami.edu/~froomkin/seminar/papers/bortner.htm

Quote
Obviously, transferring hard currency to ecash and then spending the ecash is an appealing opportunity to potential launderers'. What if the ecash is then transferred back to a regular hard currency account? This may seem a foolish act as the entire purpose is to reap the benefits of anonymous ecash. However, presently, there are no opportunities to purchase automobiles or real property by the exclusive use of anonymous ecash. Thus, the desire to convert private and untraceable ecash into a more functional means of purchasing is understandable.

Whether a regular, non-Internet currency account already exists or must be created to deposit the transferred ecash into may be irrelevant. Filing a CTR would be a legal necessity if the transfer amount is over the $10,000 reporting limit, as the transfer will deposit hard currency in a tangible, institutionalized, and regulated bank account. A transfer from completely anonymous ecash to hard currency might alert law enforcement as to the existence of the ecash account. While this alone would not track down laundered money, it might put a suspicious agent on notice.

AKA E-currency to anonymize the money but then cash out to multiple fake IDs or anonymous ATM cards to avoid having so much unaccounted for money suddenly appear in accounts / transfers tied to your name that you get raided anyway. Making the anonymous cash you have obtained appear to have a legitimate source is a different problem, a different part of the process.

Anyway use whatever techniques you want, but the ones I mentioned are not noob and you wont be able to show me a single report of someone who used them properly being arrested via financial intelligence because it hasn't happened yet. The people who are being busted via financial intelligence are using ONLY western union transfers + fake ID pick up, like a ton of people in the carder scene do. Or they are using Paypal, like TFM. Or they are using fraudulently obtained mainstream reloadable cards and cashing out at ATM with non anonymized loads, like a lot of small time drug vendors use. or they are using CIM money mule networks to fake ID mail boxes, like TFM and a lot of other busted groups have done. Also, even these cases are giving headaches to LE enough that people using these techniques are still usually being busted in ways not related to financial transfer. Actually, I can't even think of a case of someone who used a fraudulently obtained reloadable card being busted via financial intelligence off the top of my head anyway.