Has anyone been arrested using Bitcoin that wasn't trying to sell to exchange or transferred directly from an exchange. I was looking at some of the silk road stuff. I'm was able to find that people that bought things with funds that they sent directly from exchange or the seller turned around and cashed out on exchange where arrested. I also saw several other cases where that happened too. I'm just looking for an example of someone that was arrested when neither party doxxed themselves in the transaction.
Like a drug dealer or hacker or whatever was arrested because they where able to find them just through chain analysis not because that person turned around and sold on Coinbase. I could see someone using the same wallet for their KYC coins and their nonKYC coins getting tracked. I'm not trying to have a debate about it or argue with anyone, I'm just looking for information.
#asknostr
Replies (25)
I would say anything that is KYC’d you should most definitely be expected to be tracked. If you do something that may be against the law with KYC’d coins, they can always come after you.
There are plenty of people that buy things with non-KYC coins that never run into any issues simply because of the peer to peer situation of non-KYC.
Not sure too many people will say something publicly over Nostr but plenty of people in other chats are happy to talk about it.
I understand that on chain is fully trackable. I was just wondering if anyone has been arrested anywhere that did everything right just through chain analysis that didn't cash out through an exchange. I have seen examples that people have doxxed themselves through other means that lead to chain analysis putting the pieces together.
Yes, if you’re high enough profile of a target they will catch you…
But from everything I have seen it's normally through some other means. Not through chain analysis. I am still researching this topic so if you got an example let me know.
All they have to do is follow chain movements till it hits a kyc’d source… generally if it’s not an exchange it’s going to be a honeypot or sting… track down a pi address and it pretty much over…
What about the scenario that CC users lost their coins. Isn't there plausible deniability that they are no longer in control of those utxo's.
And then for that matter, other is h situations?
That's what I mean so it doesn't matter if they used Bitcoin or not, that person was already on the radar for something, made a mistake in there opsec that lead to an arrest, then chain analysis was used as additional evidence against them.
Well it matters because bitcoin is an open public ledger… Fiat is an open ledger to those how have "legal access" and can be used the same way… that being said it is possible to wash both…
And of course if you’re on their radar it’s already to late if you’re using traceable currencies… unless you are able to roll into something more private/easier to launder
That depends on if you can prove you no longer have control of those coins… but I’d probably say yes…
So from my understanding, what leads to arrest is just poor opsec and not the coin an individual chooses to use. I just googled people that have been arrested while using xmr and it all comes back to the same reason they would have been arrested for using BTC.
Yup
Almost every one of them traces back to an off-ramp rather than the chain. Ulbricht was caught by a server and a forum login, not graph analysis. In the 2020 seizure of 69,370 BTC the chain part only told them which wallet to look at, the coins moved because they got a warrant for the house and the device with the keys on it. Chain analysis produces clusters, and a cluster only becomes a name when an exchange KYC record, a shipping label or a public post joins it.
KYC is over from the start. The UTXO is doxxed upon purchase. The rest comes down to clean opsec. Which we all know is easier said than done. It always only takes 1 little slip up for things to be over in this sense.
I 100% agree. I wasn't saying we all need to do KYC or anything like that. I'm all for nonKYC and good opsec I was just wondering if anyone has ever been arrested with the only evidence against them was chain analysis.
If they can trace you down and catch you with a device that holds keys to illegal funds yes… they don’t need the kyc for that… has something like that happened yet… I’m not exactly sure if that…
Makes me think of what happened to Ross
I think I found one that kinda fits what I was asking. Roman Sterlingov of Bitcoin Fog. The primary piece of evidence used against him was chain analysis.
@Turkey you flagged the exposure yourself in the second paragraph. spending a kyc utxo and a non kyc utxo together in one transaction hands the link over for free, no subpoena needed, because common input ownership is the first assumption any clustering tool makes. i keep those two in wallets that never touch, and i label coins on arrival so i cannot merge them by accident a year later.
I was just wondering if that has lead to an arrest of someone. I do think I have found one. Roman Stenlingov of Bitcoin Fog.
The difference with XMR is that there is no effective chain surveillance to follow the money. You can use KYC'd Monero to commit a crime or send stolen Monero to a centralized exchange and pretty much nothing will happen to you. There is no KYC/No-KYC distinction to do in Monero. No clean/dirty coins. That's why hackers prefer it. Fungible MoE.
Obviously OPSEC and other heuristics still matter, but Monero eliminates the trail that could directly lead to an off-chain identity.
That's a really interesting legal case that I believe is still ongoing. IIRC the evidence upon which he was convicted was that he sent BTC to an address associated with Bitcoin Fog or something ludicrous like that. No proof beyond reasonable doubt whatsoever.
@Turkey He is the one I looked at too, and he does not clear the bar you set. The Mt Gox account they tied to him carried his home address and phone number, he beta tested the mixer under his real name there, and a Liberty Reserve login in his own name shared IPs with the payment for the Bitcoin Fog domain. So the chain narrowed the search and an old exchange signup closed it.
That make since to me. I think the issue if your going to end up in jail or not is opsec. It doesn't really seem to matter if your using btc or xmr or Swiss francs. I have heard people parrot that chain analysis is going to get you locked up and I just wanted to see if there is any proof to that claim. Just from the major cases that I have googled, law enforcement had a bunch of other evidence and the chain analysis was just the icing on top of the cake.
It was the closest one I have found so far. All the other major cases had a lot more evidence on them.
I was originally just looking for court cases or arrest records where the main or only evidence was chain analysis. I know people have been charged with murder with only DNA being used as evidence. But, all the above information has been really useful to know too. I'll give that link a read, thank you.
