I keep seeing people blaming money laundering but I’ve yet to come across anyone even attempting to explain how the money laundering would theoretically work? Is there a way to manipulate or influence which miners get with transactions?
Some cryptocurrency nerds can correct me if I wrong, but AFAIK yeah. If miner is your friend you can sent privately to him in advance signed transaction that need to be secretely included in a block. Then you can only distribute the transaction itself over network after that miner already started to mine block with said transaction.
TBH I have no idea if it's possible to get block included on chain if it's had "secret" transactions in it, but for certain it's possible for one miner to start work on block with said transaction few seconds earlier than others. There is still risk that someone else will mine it though.
Not sure I think it's likely, though - could have just been a user miskeying something.
I don't think there is any money laundering going here. The point of money laundering is to raise as little attention as you can, and that is not happening here. Weird transactions and income makes you just more suspicious.
I do doubt that explanation though, as $23 millions is nothing for Bitfinex and any of their execs could get this amount from personal funds if it was really needed.
You send your huge-fee transaction secretly to your co-conspirator miner. They start trying to include it in their blocks, and eventually get one (call this block X). But now your transaction is not a secret anymore, and so another large miner can decide to keep trying to mine off of block X-1, but including your transaction. If they can outpace your miner (maybe by spinning up extra compute), they will produce a longer chain in which the $23M goes to them instead of your intended recipient.
It seems like a very large mining fee would change the incentives that are supposed to keep miners all working on the same chain.
Very risky way to launder 23M.
Someone should be able to do the math of how much $ it's gonna cost.
Also if miner has target to get so high fee he can easily spend few millions to increase their mining capacity for a short burst, etc.