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A comment on Sheep Marketplace closes after theft of £3m in bitcoins.

Re:Sheep Marketplace closes after theft of £3m in bitcoins by minimax on Monday December 02, 2013 @09:49AM (#6833922)
I'm not too worried about this since you can be pretty sure the aggrieved will probably be able to track down the thief by examining the block chain. That is one nice thing about bit coin: it exists outside financial regulation and so penalties for transgressions like this can be handled extrajudicially. My paycheck comes today and I'm really upset I have to pay rent and not just invest the whole thing in more bit coins.
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Re:Sheep Marketplace closes after theft of £3m in bitcoins by gizmo on Monday December 02, 2013 @09:54AM (#6833952)
> transgressions like this can be handled extrajudicially

Is this code for vigilante justice?

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Re:Sheep Marketplace closes after theft of £3m in bitcoins by minimax on Monday December 02, 2013 @10:07AM (#6834038)
What I mean is why let the innovation stop at the financial system when we can reinvent/streamline the judicial system as well!
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Re:Sheep Marketplace closes after theft of £3m in bitcoins by danielweber on Monday December 02, 2013 @10:12AM (#6834081)
I upvoted you because I presumed your comment was satire.
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Re:Sheep Marketplace closes after theft of £3m in bitcoins by judk on Monday December 02, 2013 @10:40AM (#6834266)
Please don't do that. Sarcasm is a cancer on written discourse, making it harder to extract meaning.
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Re:Sheep Marketplace closes after theft of £3m in bitcoins by ufdhigdfh on Monday December 02, 2013 @10:50AM (#6834342)
I upvoted your comment because I was unable to determine if it was satire.
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Re:Sheep Marketplace closes after theft of £3m in bitcoins by ChristianMarks on Monday December 02, 2013 @12:29PM (#6835011)
I'm upvoting all of these comments because irony is cheaper than advice.
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Re:Sheep Marketplace closes after theft of £3m in bitcoins by this_user on Monday December 02, 2013 @10:02AM (#6834001)
Well, those SMP people stole money from drug dealers some of which may be part of or at least have ties to organised crime. I believe people like that have ways of dealing with something like this if know names and addresses.
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Re:Sheep Marketplace closes after theft of £3m in bitcoins by timje1 on Monday December 02, 2013 @10:14AM (#6834095)
Yes, perhaps we could pay these killers in bitcoins. It worked excellently for the DPR, after all!
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Re:Sheep Marketplace closes after theft of £3m in bitcoins by watty on Monday December 02, 2013 @10:08AM (#6834052)
Unless I'm missing something, just because you can look at the block chain doesn't mean you can track down the individual.

Can you explain?

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Re:Sheep Marketplace closes after theft of £3m in bitcoins by josu on Monday December 02, 2013 @10:31AM (#6834214)
He is probably referring to something like this [0]

[0] http://www.reddit.com/r/SheepMarketplace/comments/1rvlft/i_j...

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Re:Sheep Marketplace closes after theft of £3m in bitcoins by dragontamer on Monday December 02, 2013 @12:41PM (#6835116)
Cause trusting random people on Reddit has been sooo trustworthy as of late...

http://articles.latimes.com/2013/apr/22/business/la-fi-tn-re...

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Re:Sheep Marketplace closes after theft of £3m in bitcoins by gst on Monday December 02, 2013 @11:06AM (#6834465)
I'm not sure if it's that easy. There are dozens of sites that allow you to mix your coins - so that it's harder to track them back.

In theory, all it needs is one single non-cooperating gambling or dice site: 1) Split your illegal income up into 10 different addresses 2) Use each address for gambling with a 10 percent chance of winning and 1000% return in case of winning 3) Repeat a couple of times.

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Re:Sheep Marketplace closes after theft of £3m in bitcoins by andyhmltn on Monday December 02, 2013 @11:59AM (#6834805)
(I don't know a lot about bitcoin)

That's what the thief done. But a user on reddit seemed to track it all the way through the tumbler[1]

[1]http://www.reddit.com/r/SheepMarketplace/comments/1rvlft/i_j...

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Re:Sheep Marketplace closes after theft of £3m in bitcoins by gst on Monday December 02, 2013 @12:48PM (#6835180)
So the user got lucky once. The thief can repeat that process as often as he likes. He only needs to succeed a single time. And even if he doesn't succeed the evidence is pretty thin and might not be enough for a prosecution.
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Re:Sheep Marketplace closes after theft of £3m in bitcoins by gwern on Monday December 02, 2013 @02:55PM (#6836066)
He can repeat it all he likes, he's just making the operator of Bitcoin Fog a millionaire. You cannot launder 96k btc without getting 96k btc from somewhere else, by definition; if you 'launder' without >96kbtc of other people's money, you just get your own coins sent to a new address, and you could've done that yourself for free.

Now, maybe he could manage the full 96k btc if he used multiple laundries over many months, but that is time he does not have.

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Re:Sheep Marketplace closes after theft of £3m in bitcoins by ye on Monday December 02, 2013 @12:04PM (#6834834)
That's a huge myth that you can track the money just because the transactions are public. I saw this simple example:

Imagine wallets A,B,F,X,Z.

A contains your money.

B contains somebody else's money.

Move the money as follows, 1BTC in each transaction:

    A -> F
    B -> F
    F -> X
    F -> Z
Now you have 1BTC in X and in Z, but there's absolutely no way of telling where they came from. All you can say is they came from F. From now on X and Z are anonymous.

And then, you can simply sell bitcoins for cash on localbitcoins. It's pretty untraceable.

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Re:Sheep Marketplace closes after theft of £3m in bitcoins by rprospero on Monday December 02, 2013 @03:07PM (#6836159)
That system only works as long as all parties agree to the concept of "innocent until proven guilty". If one party is willing to take the stance of "guilty until proven innocent", the entire scheme falls apart.

For instance, let's say that A wants to send bitcoins stolen from G to X and B wants to send other bitcoins to Z. G simply approaches F and says "You stole my bitcoins. As punishment, I'm going to chain you to a mattress in a 6x6 cell until you confess." That leaves F two choices. F can stand for his principles, keep quiet, and serve as an object lesson to all other potential anonymizers.

However, if F doesn't want to slowly go mad from a lack of mental stimulation, then F would probably keep detailed accounting records of each transaction and pass them on to G. G might feel gracious and upgrade F to a 10x10 cell with a window.

Granted, most of these options are available with cash, but you don't have the transaction record which shows you who F is. In this way, bitcoin is easier to trace than cash.

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Re:Sheep Marketplace closes after theft of £3m in bitcoins by alandarev on Wednesday December 04, 2013 @03:47AM (#6845734)
Thus, whole bitcoin user base will be thrown into a jail if the Sheep Marketplace owner is smart enough to spend significant time parsing his coins around.

Nawww, that is unrealistic, even for FBI.

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Re:Sheep Marketplace closes after theft of £3m in bitcoins by ye on Monday December 02, 2013 @05:23PM (#6837007)
Well that was just a simple example with round numbers. In reality you will have thousands and thousands of such transactions all going to seemingly random wallets with random amounts, and then to ten thousand different ones, back and forth. They will look like real transactions too.

You can't possibly track something like that. Most wallets don't have any names attached to them.

And even in this simple example you don't know who F, X and Z are and how to find them. They are just wallet numbers.

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Re:Sheep Marketplace closes after theft of £3m in bitcoins by dobbsbob on Monday December 02, 2013 @12:48PM (#6835182)
Exactly, unless they are dumb enough to dump the coins in a major exchange which can 'freeze' the funds nobody will ever be able to trace them. As for the owners being doxxed they already failed opsec day they opened with czech css comments giving away the obscure framework they used. I'm sure they git cloned directly to their boxes on clearnet too.
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Re:Sheep Marketplace closes after theft of £3m in bitcoins by Anderkent on Monday December 02, 2013 @04:50PM (#6836794)
That's what tumblers do. It only works if both A and B contribute the same sum, of course, and that means if you have 93 million dollars to tumble, you need other people to contribute another 93 million.

Which no one will, on such a short notice. Thus you end up owning both A and B, in which case the mixing is useless.

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Re:Sheep Marketplace closes after theft of £3m in bitcoins by alandarev on Wednesday December 04, 2013 @03:49AM (#6845746)
What if extracting one million is enough, and he can do the rest over several years span?
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