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Comment by bduerst | Hacker News Reader

That's because bitcoin adoption is so low that it's not a threat.

Seriously:

>9.29 The money laundering risk associated with digital currencies is low, though if the use of digital currencies was to become more prevalent in the UK this risk could rise. Digital currencies are currently not a method by which terrorists raise or move money out of the UK (though they remain a viable method for doing so).

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It s also not anonymous, and i guess terrorists would need something more immediately liquid.

I'm not sure about the other digital currencies, but if you tumble with bitcoins it becomes anonymous, right?

Only sort of, and only if you have a lot of other people willing to participate with you. If you are just looking to see how money is flowing, you just see the tumble cloud between your collections of interesting source and destination addresses, you are not foiled by it (in the worst case scenario you consider every output address interesting, but then you start paring that down with other information).

I wonder if some of the bitcoin gambling sites have really been operated by people trying to obscure the history of their bitcoin. If they can control how fast their coin moves through the site, they have some more assurance of how many addresses they are mixed with.

Believe in your lucky sunglasses all you want, but how much would you really stake on a tumbler?

"Such tumblers do a very poor job of hiding transactions, especially when dealing with a thousand or a hundred thousand bitcoins. The simplest approach is to simply look for common flow patterns."

- http://www.forbes.com/sites/valleyvoices/2015/01/15/how-pros...

Interesting article, but isn't that survivor bias?

All the tumblers seem inept when the only detectable tumblers are inept. You don't see the competent or succesful tumblers.

If a tumbler is used by 1 person, they get their own coins back. To work, it needs as many users as possible. Therefore a researcher doesn't scan transactions looking for "possible tumbling", they look for the tumblers, use them and follow those transactions.

I meant tumbler as in a person, not a repeat service. It would be pretty easy to detect mass tumbling services through pattern recognition.

Why, though? Once coins from two separate sources enter a common wallet, they become impossible to differentiate from each other.

Not true. Each piece of each coin is traceable. With good mixers, you don't get your own coin back. And you check for taint.

There is also an inherent risk in trusting that the tumbler operator is not willing to cooperate with (or happens to be operated by) western governments. It doesn't seem like a reliably sustainable strategy, especially for any substantial amount of funds.

Even if they don't control it, wouldn't a heavy user be able to build a probabilistic model of where the coins went? If you are 99% of the volume on a tumbler, you know with near certainty that your adversary's coins are being swapped with your own. Paying tumbler fees or even making massive amounts of small-loss bets on a gambling site is well within the resources of a state actor. Bitcoin is small. Eventually real money has to be taken in or out of the system, which gives them a smaller set of individuals to target for investigation.

Right, so you mix multiple times. You use unlinkable wallets. Electrum and Multibit wallets in Whonix VMs work well. And you successively use different mixing services, so deanonymization would require collusion. Doing three successive mixes is prudent.

True. If you want to anonymize that much coin, you must break it down into numerous small flows.

Even if it was, the simple fact of using a tumbler is illegal, as you are aiding to launder money.

So why don't we see headlines like "EU clamps down on banking industry and corruption in financial institutions"?

Because the E.U. already does and it's not news.

http://www.transparencyinternational.eu/focus_areas/eu-finan...

Really? Transparency International is not a government organization but a non-profit registered in Belgium.

edit: HN posting limit is extremely annoying, providing no way for a sustained discussion within multiple threads.

...Who runs a websites containing a series of announcements and headlines about financial regulation in the E.U.

Next you'll say those aren't true headlines, a la no-true-scotsman.

How exactly the Transparency International website that contains public statements critical of E.U. financial regulation backs up your point?

Because it's proof of E.U. financial regulation. What is your point?

That regulation of some sort exists, not that it is effective or "clamping down"

The Transparency International website that you've linked does talk about financial regulation in the EU, but Transparency International's position is that the regulators have failed - that they have not, in fact, clamped down on fraud and corruption, and that close ties between regulators and the banks they're regulating have made them unwilling to act. You're using a web page criticising regulators for failing to take action as proof that they didn't fail to take action.

I was using it as proof that E.U. financial regulation (however shitty it may seem) isn't new, since TI does a good job as watch dog and lists many examples that date back.

Perhaps provide a _Rebuttal N:_ in the relevant post as you provided this edit.

Here's a hint, along with some advice. You can get around the posting limit by clicking on the direct link of the comment you are responding to. Then again, it's there for a reason, so it's probably best to make sure your reply at least has some context and analysis, so the discussion doesn't devolve into a bunch of one line responses, which rarely convey enough information to make the conversation worth while.

You do. HSBC was fined billions of dollars for money laundering. Although some argue that convictions of individuals would be better.

Nobody got a criminal conviction. How are we OK about this?

Rumor has it that their profits from money laundering were substantially greater than the fines, though.

I don't think we have to call that just a rumor. I haven't heard anyone argue they weren't. But it's not important what the bank paid.

Everyone involved got their bonuses. No one was responsible. No one paid back. I don't think anyone involved cried over any fines the company had to pay.

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