Tumbling
Isn't sending Bitcoins to a tumbler just as suspicious as sending them to a DNM? Doesn't using a tumbler just add another potential point of failure?
Posted Dec 5, 2014, 6:50 AM UTC
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Bitcoin tumblers are generally safe and do what they advertise, but I wouldn't even bother with them unless you're irrationally paranoid. Every marketplace already has their own built-in tumbler, so even sending funds directly from a bitcoin exchange site to a darknet marketplace will be nearly impossible to trace. The fact that I honestly can't think of a single case where someone has been caught by LE because of their bitcoin trail is proof of how difficult it is to do, so I seriously doubt anyone would use this method to target an average buyer looking to score a small amount of drugs. This would take a lot of time and effort by law enforcement and would be reserved for investigating high-profile vendors.
The very act of receiving drugs sent through the mail from an anonymous vendor is by far the most risky step. This is how you and 99.99% of people would get caught. Assuming you use PGP encryption and follow basic security procedures, someone tracking your bitcoin purchases should be the least of your concerns.
That being said, it's probably not a bad idea to send your purchased coins from a site like Coinbase to your personal bitcoin address before moving it to a marketplace, which is what I do.
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I know all this, but how is something like bitcoinfog any safer than sending coins directly to a market?
If LE can theoretically follow a bitcoin trail to a market how is a tumbler any different?
It would be just as bad to be sending your coins to a money laundering service as it would be sending them to a marketplace wouldn't it?
And using a tumbler adds an extra step where there could be a honeypot or a scam.
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Bitcoins are not illegal, and it's not illegal to tumble them. Darknet markets are illegal, hence the 'honeypot' label. Scam? Most definitely. Some tumbling services have and do scam, bitcoinfog is one of them. As u/saystheleon says, if you're at all suspicious, don't bother tumbling, but if you bought your coins with a debit/credit card or PayPal linked to your real identity, you are easier to trace if LE decided to.
Correct me if I'm wrong but the tumbling service mixes all your coins up with other coins and spits the total same amount out over split transactions so your coins theoretically came from multiple places. I think it's something like that.
At this time when OPSEC is even more important (after Operation Onymous) why would you skip on any step to remain anonymous?
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Bitcoins are not illegal, and it's not illegal to tumble them.
But according to Judge Katherine Forrest you can be charged with laundering bitcoins.
the tumbling service mixes all your coins up with other coins and spits the total same amount out over split transactions so your coins theoretically came from multiple places.
But it doesn't hide that you sent coins to the tumbler.
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Bitcoins are not illegal, and it's not illegal to tumble them. Darknet markets are illegal, hence the 'honeypot' label.
I think that a tumbler would make a very good honey pot, LE operating a tumbler would be the best way to trace illegal bitcoin transactions.
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I guess I didn't really understand the scope of your question and answered it from an average buyer's perspective. The debate over whether bitcoins = money and tumbling = money laundering is opening up a whole new can of warms that I'm not sure has a definitive answer yet.
Assuming bitcoin tumbling isn't illegal though, even if a tumbler turned out to be a honeypot, LE would still have to follow a person's bitcoin on the blockchain from the original purchase to a darknet marketplace order, a very difficult if not impossible task unless the marketplace was also a honeypot. Tumblers are just another layer of protection that if done right, would theoretically lead LE to a dead end.
But yeah, there's a level of trust you have to have in a tumbler in order to use them, much like any other step in placing an order. What they promise is certainly enticing, although its unclear how effective they really are.
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Saying LE operates or has compromised tumblers is not that much of a stretch, markets getting seized neither, and there you have your full chain of coin movement.
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That makes me really sketched out about Agora.
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Not sure I'm disagreeing with you here... I just said that tumblers are another layer of security that yes, could potentially be exploited.
But like I said before, this is really all irrelevant. People often seem to fixate on minor OPSEC issues instead of looking at the big picture, i.e., you're getting drugs mailed to you from strangers. Making sure your vendor is competent and uses good stealth is infinitely more important than obscuring your bitcoin trail.
Case in point: the original Silk Road effectively operated as a honeypot for months. Over half of users at the time didn't encrypt their personal info, meaning the DEA had at a minimum, tens of thousands of user names and addresses at their disposal. What did they do with this info? Absolutely nothing, save for a few vendor and admin arrests.
So if they didn't even bother to pursue people too lazy to use PGP encryption, they sure as hell didn't bother following anyone's bitcoin trail. It's a complete non-issue. Sure, I won't send my coins directly to a marketplace, but that's because it only takes 5 extra minutes to do.
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Just because nobody has yet been busted for not mixing coins, doesn't mean the FBI won't do it in the future.
Only very stupid people think that the law is stupid. The Feds just haven't gotten around to learning how to follow the blockchain.
When you see what people like u/impost_r can casually do, you'd be mad to not mix somehow.
EDIT: It is a doctrine of war not to assume the enemy will not come, but rather to rely on one's readiness to meet him; not to presume that he will not attack, but rather to make one's self invincible. - Sun Tzu, The Art of War.
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But markets mix coins as well, the question is does using a tumbler make you any safer? It could only mean the difference between getting charged with money laundering or drug trafficking.
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OK but if the Feds seize a market they will know which addresses belong to that market and which addresses deposited and withdrew from the market.
For a tumbler to work it has the be separate from the market.
FWIW I think tumblers in their current form are not good. You'd be better off mixing by depositing/withdrawing from exchanges, using gambling sites or coinjoin. Or trading your bitcoins through a service that doesn't keep records (like cash face-to-face)
Remember all the records on the blockchain are forever. If a vendor cashes out his drug money and retires, does he want to be looking over his shoulder for years to come? It's possible blockchain analysis made 10 years later could end up busting him. Same thing for large-scale buyers who resell on the street. Small time users probably not much.
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OK but my thinking was if Feds could prove that you sent coins to a tumbler you could be charged with money laundering. I don't think it would be any more difficult to prove that you sent coins to bitcoinfog than to agora.
So they wouldn't have to join the dots between the tumbler and the market, either will do. So sending coins to a tumbler independently could be just as risky as sending them to a market. Tumblers can't work if you can get in trouble for using them. So by using a tumbler all you're doing is adding another potential point of failure with no real benefit (plus extra potential for scams, honeypots etc.
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Money laundering does not mean mixing/using a tumbler. Money laundering is like the opposite of tax evasion; Making dirty money appear clean so that you can pay tax on it and spend it on legit things, like fast cars and mansions.
If the Feds ask why you bought btc on coinbase and sent it to a mixer, say you don't want anyone to know you were buying sex toys on amazon.
Privacy is not a crime. There are tons of reasons to desire privacy that are not related to drug dealing.
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You may see it like that but LE don't and they will find a way to make money laundering stick, the arguments are there. If a judge says it is money laundering or whatever the fuck else they want it to be then it is, just ask Ross Ulbrich.
EDIT: The purpose of tumblers is to launder bitcoins, your coins are linked to illegal transactions (dirty) so you're cleaning them.
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As I've mentioned before, I think tumblers are not that great in their current form.
Instead I'd say mix by depositing and withdrawing from gambling sites or exchanges. If the feds asks, say you wanted to gamble or trade. Soon there'll be better bitcoin mixing technologies coming out but until then you'll have to improvise.
Actually don't say anything if they ask, instead call a lawyer. It's up to them to prove your guilt not you to prove your innocence.
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I agree, I think money laundering might be a stretch. I'm not a lawyer, but one potential problem is not that the person themselves were money laundering but were aiding and/or abetting criminal acts by participating in the tumbler. That is probably not the right legal terms, but there are some very vague ways in which you can get popped - if you participate in something known to be illegal, this can be problematic for you. So for instance, if they can show that tumblers are largely used by criminals to money launder or hide assets themselves, I believe they could say b/c you participated in that, you were an accessory.
Again, I don't think I'm using hte right legal terms but if you knowingly participate in an activity that aids a criminal enterprise you can be held liable is the gist of what I'm trying to say. But it would depend on them convincing a jury that tumblers are used mostly be nefarious criminals and there is little to no legit purpose to it. That would probably be easier to prove than money laundering for a tumbler participant.
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Yes, and sending coins to a market doesn't prove that you purchased something illegal. So if tumbling is all about protecting yourself from future blockchain analysis using a known tumbler doesn't make any sense.
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Sending coins to a tumbler can definitely get you on some watchlists but that alone doesn't prove that you're using the coins for nefarious or illegal purposes. As long as you don't give them a reason to bust you the odds of getting caught are minimal.
This method has been working for me since the original SR(before it went mainstream) but I'd recommend to use your own method. Putting all your trust in a 3rd party comes with a huge risk yet is the easiest way to feel secure. The safest way is to buy coins locally with cash then deposit them to an exchange that doesn't link back to your identity in any way. Next convert them into a couple of altcoins that have a steady exchange rate. From there you can either use the coins at a casino or transfer them to different exchanges. Once you have around the same amount of btc you started with send the smaller amounts to their own new wallet so each time you make a deposit it's going to a new deposit address.
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I have a long post that I'm still trying to articulate better. But one thought that crossed my mind, say if you didn't tumble and deposited directly to a market wallet, who's to say that you didn't sell the coin to someone, such as via LBC. I could meet up someone in person and give them my market wallet deposit address and buy coin and have him deposit directly into there. This is more an in-person deal than using LBC escrow b/c that goes to your wallet, but you get the point.
So instead of tumbling, could you just do deals like that and basically use the other person as your tumbler? They deposit right into your market wallet? Obviously there are probably OpSec issues with that since you did actually meet someone who can identify you, this is more of a thought experiment I guess. But if nobody can tell if a wallet is a market wallet, then the seller wouldn't know and I'd assume not much would come of it... And if the seller were using an online wallet, LE would need to subpoena the online wallet place, get who made that transaction, and then talk to them if they worked backwards from the market to the person who deposited into that wallet. Does this make sense?
Also that being said, without having access to the actual transactions on the market's database, there is no way to tie you to a purchase. It'd be like the feds trying to follow transactions at a bank without having access to the bank's books. They'd just see money coming in, money coming out. Without the internal accounting books, its pretty meaningless.
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Tumblers are bullshit, they are just a false sense of security. Buy coins in CASH via person to person. Safest way by far!!
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Yes it is almost just as suspicious. Tumblers are a pretty ridiculous idea from the start, nobody knows who is behind them and even if you do you don't know if they are compromised. They're also the perfect target for LE.
There are so many semi legal bitcoin services that are being used to tumble coins I don't see a reason why anyone would use a service like Btcfog or Helix.
I've spoken with operators of bitcoin casinos, mixing using their services is pretty rampant.
Could you name a few?
Satoshi casino
PayPal... Casinos... Amazon might make a switch soon a lot of people are starting they see the truth of the better currency
Look for yourself haha, there are tons of gambling websites for example. I am just saying that I know these services are used, not providing you with advice lol.