If yes, then they may publish a dynamic list of mixers to use, and SoF would be non-determinable. Mixers may have more problems than usual then, but afaik they are already banned in all white business bitcoin operations, so probably not a big deal for them.
Otoh, CIAs could control the pipe by powering some mixers themselves and promoting them among enemies.
The funny thing is that if the mixer is hard monitor because it is going through fiat currency, then you never needed BTC in the first place -- you just launder money through it.
I frequently say this: if you think a news story seems strange, look at what the reporter has written previously. Newspapers are making it easy these days, which is awesome. This is Nathaniel Popper's recent work: https://www.nytimes.com/by/nathaniel-popper He gets paid to write controversial stories about cryptocurrency (and impossible burgers :-D ).
>then you never needed BTC in the first place -- you just launder money through it.
I’m afraid I don’t understand this part. Their goal is not to launder money, but to receive funds from “around the world” (and blow up someone). Of course easy laundering may be profitable^ to criminals, but how are these two connected here?
>Easy to shut down the mixer.
Easy in which country? How a mixer in any “closed” country could be shut down? Say DPRK or strong middle east countries who oppose “west world” to be opaque enough, but not technically aware of these activities (or simply don’t care, as you mentioned). Couldn’t that basically turn “person X consciously funds hamas” into “someone in country Y funds hamas as a hidden detail of business operation”?
^ Our company tried to create a btc-based business in EU. Banks required us to provide sof for every transaction, including banning any amount from fraud/criminal lists, and mixers were all in these lists. I doubt that you can easily launder via well-known, big enough mixers. At least to my understanding, EU is very aware of grey money that comes from btc market.
A counterexample is Bitcoin Fog.
Not really.
If someone is sending money from their Coinbase on-exchange wallet then fair enough, but if the wallet holder has not been through a KYC process then (while it's in the public ledger) it's still almost impossible to track the source of the funds - knowing the source and destination wallets tells you nothing.
Governments are very certainly tracking this. With augmentation and pattern matching, they will know quite a bit.
That's rather misleading, you can see the wallet address but you don't know who controls the wallet. I assumed bitcoin advocates here would prefer not to spread misinformation.
Notwithstanding what you say about blockchain analysis, I'm not aware that anything mixed by Bitcoin Fog has been deanonymized. And that includes some major Bitcoin thefts, such as the 96000 BTC from Sheep Marketplace.
But I wonder what percentage of "terrorist" contributors know to use Tor.
In traditional finance there is usually some sort of method in place that directly associates (either concretely as in say requiring an ID or loosely as in just having video surveillance correlated with say a money order or money gram transfer) a persons identity with an account anytime they are conducting any form of financial transaction.
With bitcoin, there is no way to pinpoint exactly who created an address. I can create thousands of wallets, and distribute them to all my terrorist buddies across the world for example, and it's not like traditional finance where i had to get somebody connected to the government (as the banks are) to sign off on me doing that.
The only weaknesses bitcoin has that I can see is
1.
that people's computers are typically less secure and easier to break into than banks who do a good job implementing security, and therefore its way easier to steal..
2. Because its decentralized and entirely electronic based when somebody actually steals your money it is virtually impossible to reverse that without requiring a hard fork of the block chain and for some currencies you just can't do that. (for example, nobody is going to be able to hardfork btc and take over it just because somebody ripped off a $1m worth of BTC from joe shmoe who hadn't updated his Ubuntu PC in 2 months because he's too lazy to type in his password everyday)
And lastly, the fact that bitcoin (and all other currency for that matter) becomes virtually worthless when nobody is willing to give you fiat in exchange for it. There is always going to be a weakness in the fact that these terrorists are going to need to convert their bitcoin into fiat eventually. Realistically, it doesn't actually make any sense why terrorist organizations would do this because of this weakness. You'd have to find a buyer for them who can give you fiat directly without raising suspicion. Which means direct cash exchanges and if you are already at that level of coming out into the open. You might as well just mail people cash using bogus identities and PO boxes.
//edit: The important thing then is that the coins are not "tainted" as being terrorist donations. With the system described in the article that may be possible.
And that they don't have one. They've used the hawala system since pretty much forever.
This is an incredible statement, Bitcoin is a public ledger. It is the very opposite of anonymous. It is extremely easy for sophisticated governments in the USA and Israel to identify who has donated. I can imagine these authorities chuckling at the naivete of the "Terrorist"/"Palestinian authority" "secret" fundraising effort.