Anyone using Bitcoin for illicit purposes is just not very smart

in LeoFinance •  2 months ago  (edited)

Regulators hope criminals will use Bitcoin to commit crimes because they will get caught

There are still those that say bitcoin is only used by criminals and for nefarious activities.

Well, I'm here to tell you if they are (they aren't) they are going to be caught sooner or later.

Lets go down that rabbit hole for a moment...

Lets say some drug dealers or human traffickers want to do business in bitcoin.

That's fine and all if they never want to go to fiat.

If they ever want to go from bitcoin to fiat currency, that is where trouble is going to arise.

The vast majority of exchanges are requiring KYC at this point, and the ones that aren't, well they still flag large "suspicious" orders.

This was all revealed by someone who has worked for exchanges and had to work directly with governments, more on that an be seen here:

https://hive.blog/hive-167922/@jrcornel/think-you-re-anonymous-in-crypto-think-again

Basically, the gist of it is that governments and regulators know a heck of a lot more about who owns what in crypto than most believed.

In some instances the "flag threshold" was as low as $5k... you think drug dealers and human traffickers are going to be able to do much crypto to fiat or fiat to crypto with $5k transactions setting of alarms on reports being filed?

Not only that, but lets say they decide to keep everything in crypto, they got the fiat into it a long time ago and have since been going business mostly in crypto, that isn't really possible, but we can pretend for now...

The way bitcoin and most crypto's work is that there is a trail of transactions that are visible to everyone, including regulators. If at any point during that trail one entity is known via an exchange address or something else, they can go back through all the transactions and possibly gain info on the other parties involved.

image.png

(Source: https://www.sciencemag.org/news/2016/03/why-criminals-cant-hide-behind-bitcoin)

So, not only do they have to be extra careful, they have to be extra careful about anyone they are doing business with...

Oh and btw, this ledger of transactions doesn't disappear after a while, it's there forever.

Why do you think so many people are still freaking out that bought drugs from Silk Road years and years ago but have yet to see any issues from it? There still could be...

Cash works much much better for these types of things.

Which is also probably why we will see cash phased out over the coming years.

When they first looked at bitcoin back in 2012 they realized they don't want to ban it since it is actually easier to catch criminals using bitcoin than it would be criminals using cash.

So, the next time someone tells you criminals are the only ones using bitcoin, tell em that they won't be for long as they will likely get caught.

Plus there are reports talking about something like 1% of all BTC transactions are involved in some sort of illicit activity...

https://cointelegraph.com/news/515-million-in-bitcoin-spent-on-illicit-activity-this-year-representing-1-of-total-btc-activity

Hardly sounds like only criminals are using it...

Stay informed my friends.

-Doc

Posted Using LeoFinance

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When they say that BTC is only good for terrorists and criminals, do you think this is to convince them to move to BTC so that it's easier to track them?

Posted Using LeoFinance

No, this is the standard smear campaign of central banks and the establishment in general. When you want to spread negative propaganda about something, you say it is used by criminals. Drug dealers, pedophiles, thieves... the story is the same for many many many other technologies that threatened to disrupt the established elite. These are the playbook lies you spread about a technology that threatens your business.

Yep, exactly. Plus many repeating this narrative don't know any better. They don't know how bitcoin works or understand it. They just heard someone somewhere say it was only used by drug dealers and criminals so they repeat it and believe it...

No, not really. I think it's because they are uneducated with how exactly bitcoin and the like work. At one time bitcoin was used mostly by criminals, but that was almost a decade ago...

Right, but what we have to understand are the details of such operations. Drug dealers get caught because they aren't careful enough. Possession is 9/10ths of the law. If the DEA raids your operation they need to find the private keys of the wallets you're using or they have no hard evidence (other than the drugs they find).

These wallets are also a honeypot for corrupt police because they know this money is easy to steal. It's not like locking cash up in an evidence locker. One picture of a private key and you could steal that money anytime anywhere in the world.

It takes years to shut down a Silk Road operation, and the only way to do it is to get DEA spy agents planted inside the network. It's actually pretty crazy. Especially considering these drug runners are a lot more transparent than most (using Bitcoin and sending product through the mail).

Honestly I think a lot of these guys that get caught do so because they keep escalating and scaling up, thinking nothing is going to go wrong because it hasn't yet. I'm sure there are plenty of criminals who play it smart and have avoided detection this whole time. We only see the ones that get caught as they are paraded in front of us and made an example of to scare the population away from following in their footsteps.

Good points. And yes regarding the corrupt officers, I read something the other day about an officer getting fired over stealing something like $700k worth of crypto in one of their busts...

They don't necessarily need the private keys, they combine the keys and known wallet address with the IP address and they have a pretty strong case against someone...

  ·  2 months ago (edited)

Right well, if you're connecting IP addresses with known identities that's just not very smart :D

How hard can it be to hack a random WIFI when millions of dollars is on the line? How hard can it be to get internet access without revealing your own identity? What about VPNs and IP spoofing? Bouncing signals all over the world and making their job way harder? Bitcoin transaction can be airgrapped through QR codes, created with sound, and even broadcast with emoticons or radio waves.

The ability to decentralize ownership and identity is pretty easy if you know what you're doing. A lot of criminals are lazy, ignorant, or greedy.

Mafia organizations that scale big enough have agents within law enforcement. We're made to think that these "kingpins" are being taken out by law enforcement. Ross Ulbricht was no mafia kingpin, he was just a programmer libertarian dork that believed in free market. If he had been willing to go all the way and full-on create a mafia organization he would not be in jail right now.

As soon as Silk Road gets taken out it immediately get rebooted under new leadership. How does no one come to the obvious conclusion that these people they are arresting are not at the top of the pyramid?