Silk Road forums
Discussion => Security => Topic started by: random0 on July 26, 2012, 12:24 pm
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Please weigh in if you can.
Financial:
LE might have a surplus of "confiscated" BTC they got from busted or turned over hackers/scammers/carders/dealers
It's easy to set up an exchange service. They just need a small time criminal who's familiar with financial services (or scamming) and BTC, turn him around, he's can to do all the work, accepting cash in the mail, writing reports.
It's fairly legal and easy to sell BTC while they can remain in the core of SR, staying in close contact with multiple buyers and vendors through exchanges and "financial services" like money laundering. Easier to push BTC than coke.
Exploring the system:
They pour some water at a given point of the system and just watch where it flows.
It's almost certain that BTCs sold on SR will eventually go through a vendor here, even if it's tumbled, so the exact vendor cannot be known, but it's a vendor for sure.
If the coins are not mixed properly BTC can be traced, transactions mapped, multiple vendor's BTC adresses can be harvested this way and connections can be studied.
BTC buyers are not completely anonymous even if they buy with cash in the mail.
A buyer gives out at least:
- the city or the post office where he sent the cash from
- the amount of money he spends on SR
- the frequency he buys BTC (along with how long does it take to spend his coins until he buys again.)
- buyer's account name
- BTC address es
All these are connected. Statistics can be made, bigger buyers filtered, traced, mapped.
Anything else?
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BTC buyers are not completely anonymous even if they buy with cash in the mail.
A buyer gives out at least:
- the city or the post office where he sent the cash from
- the amount of money he spends on SR
- the frequency he buys BTC (along with how long does it take to spend his coins until he buys again.)
- buyer's account name
- BTC address es
All these are connected. Statistics can be made, bigger buyers filtered, traced, mapped.
Anything else?
I'm not sure this is particularly viable.
Even I don't know the real identity of my customers who buy BTC for cash in the mail. The man who receives the envelopes shreds them (although seeing a postmark saying "Waterloo" or similar would tell you next to nothing anyway).
Also the amount of purchases a buyer has made on SR is information that is available to any vendor. Indeed this is information many buyers post publicly anyway so really don't see how it could compromise their identity. It's still a far cry from counting the number of Bitcoins a person has bought using to linking it to a sale on SR.
If anyone is feeling particularly paranoid about giving out their account name/wallet address I suggest you create a new account on SR just to receive your coins and then withdraw them to your main account; they will be automatically "tumbled" to throw off this kind of tracing.
Having said this I do address this issue in my FAQ and my question is, "Why would they do this?" For far less trouble they could simply use existing legislation to force an already established Bitcoin exchange which accepts payment by bank transfer only (Intersango anyone?) to hand over their records?
The safety of my service hinges on the fact that a buyer's identity isn't known to me, so by extension it can't even be known by LEO. This is the way it should be in my opinion!
V.
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Forcing an exchanger like Intersango to hand over logs will only yield random people who bought BTC and the random things they have bought.
Coins sold for SR users will be most likely spent on drugs, and the coins will lead to SR vendors.
Selling BTC solely for SR users is still a good way to harvest mass amounts of vendors addresses, just by tracing the coins, while they exploring the sytem, establishing trust etc.
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Forcing an exchanger like Intersango to hand over logs will only yield random people who bought BTC and the random things they have bought.
Coins sold for SR users will be most likely spent on drugs, and the coins will lead to SR vendors.
Selling BTC solely for SR users is still a good way to harvest mass amounts of vendors addresses, just by tracing the coins, while they exploring the sytem, establishing trust etc.
Tinfoil hat time! Surely all a vendor has to do is to create a new SR account from which to contact the BTC trader and there'd be no way to link the postal address at which they receive the cash to a particular seller's id? I know this because this is the system I have in place - I know that several of my clients selling me Bitcoins are major vendors on here; I might also assume they're based in the same country where they receive the cash (although this is an assumption) but what good would it do me if I were a cop? Buying and selling Bitcoins is still perfectly legal and it still tells me absolutely nothing about who my clients are- indeed I encourage them to have money sent to an address not connected with any illicit activities, do you see the problem?
As for examining SR's logs only revealing people who have bought Bitcoins, I am sure you're not naive enough to think that the majority of buyers are doing so to invest on the stock exchange and buy T-shirts? :-D
V.
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There's no point for LE in selling bitcoins. You only get intel buying bitcoins and cashing somebody out who has a lot of them, advertises here, and is most likely also a drugs vendor. You want somebody with a lot of coins on here and want to send them a traceable payment method for enough money they can't refuse. Even if it's mail order cash, just sit outside the PO box and follow them to see who they give the marked money to. Since cops can just phone up any local detectives, they can offer to meet in person and exchange for cash anywhere in the world. Find me one vendor that won't say no to a guy with $10,000+ cash and a phony 'vouched' SR buyers account with a lot of history.
Even if they send their g/f or associate that person will crack and become informant right after they arrest them for money laundering. Doesn't matter they are 100% BS charges the good cop bad cop routine worked on Sabu in less than 5mins turning him informant.
If I were a cop, to do this I'd first order from the vendor and find out what city/area he lives in. Then I'd make posts here looking for large qty of coins in that area for cash trade. Mail them marked money or meet up, then follow the trader and surveil them. If they're later dumping shipments into boxes like Ene then ruh-roh, busted. If they're from here, then ask them for drugs when you meet them and do the bitcoin trade. After successful trade I guarantee the guy will sell you drugs too. Ruh-Roh.
Personally I would just use this site to buy/sell products and not anything to do with cashing out my SR profits. Would do all financial trading off it in the legitimate areas (lol legit) like IRC, trading in person on other forums, anywhere but here. I would set up a real legal trading company and cash out to people so I could create a legit business out of it, and a reason for having so many coins. I'd prob set up a European entity to cash out my bitcoins to Europeans if I were an American or vice-versa. The more layers of plausible deniability and legitimacy the better.