Bitcoin As A Government Surveillance And Tracking Tool

Discussion in 'Bitcoin and Cryptocurrency' started by Millard Baker, Oct 9, 2014.

  1. Millard Baker

    Millard Baker Member

    Sorry @MindlessWork and @pumpingiron22 , I thought I was in another thread and just realized I'm responding to some very old posts...
  2. MindlessWork

    MindlessWork Member Supporter

    No biggie, it happens but thanks for your response to my post though.:)
  3. heady muscle

    heady muscle Member Supporter

    You cannot trust anything that is digital. The military industrial complex devised this "elaborate systems." Why would anyone think bitcoin are immune to tracking is beyond me.
  4. Meridius

    Meridius Junior Member

    Everything can be tracked, but what about the basic methods to stay semi-private? Perhaps wallet sign-ups with VPN and encrypted email?

    And if I purchase coin using Coinbase, is it better to cycle through other wallets before direct spending on product? If so, which wallets are good for end result product spending?
  5. Millard Baker

    Millard Baker Member

    Bitcoin can be a great way for the government to track transactions. Criminals are recognizing this more and more:

    "A U.S. Homeland Security official confirmed to CNBC in a phone interview on Thursday that criminals are "looking more closely at other currencies like monero and ethereum."

    "What the criminals are starting to see, and some of the trends we're picking up as well, is that bitcoin also works equally just as much against you as it does for you," said the official, who didn't want to be named.​

    Source: Dark web finds bitcoin increasingly more of a problem than a help, tries other digital currencies
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  6. Millard Baker

    Millard Baker Member

    FYI, Darkcoin changed its name to DASH in March 2015.
    MindlessWork likes this.
  7. Michael Scally MD

    Michael Scally MD Doctor of Medicine

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  8. Millard Baker

    Millard Baker Member

    Bitcoin is such a great tracking tool that the government can use it to de-anonymize TOR users!!

    "When A Small Leak Sinks A Great Ship: Deanonymizing Tor Hidden Service Users Through Bitcoin Transactions Analysis"

    Attached Files:

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  9. Millard Baker

    Millard Baker Member

    Currently, bitcoin users can have multiple addresses, making it easier to conceal identities and commit crimes on the Blockchain. The ability to link related addresses, called ‘clustering,’ is an important new tool that helps law enforcement agencies conduct criminal investigations,” said Valery Vavilov, CEO of The Bitfury Group. “Bitfury’s award-winning engineers have come up with an incredibly innovative and novel approach to analyzing transactions on the Bitcoin Blockchain. The Bitcoin Blockchain has the potential to be a strong force for good, and this new method will help ensure that it lives up to that potential by aiding investigations and reducing criminal activity.”

    Criminals are increasingly learning the Bitcoin Blockchain is not the place for them. Having a traceable public ledger of every bitcoin transaction ever conducted allows law enforcement to ‘follow the money’ in a way that would never be possible with cash. Criminals should run, not walk, away from bitcoin. And thanks to Bitfury, today they should be running away even faster,” said Jason Weinstein of Steptoe & Johnson LLP, a Bitfury strategic advisor and former Deputy Assistant Attorney General in charge of cybercrime at the US Department of Justice
    heady muscle likes this.
  10. Millard Baker

    Millard Baker Member

    Bitfury Launches Crystal – A Blockchain Investigative Tool for Law Enforcement and Financial Institutions
    Crystal Will Provide Comprehensive Analytics for Blockchain and Cryptocurrencies

    AMSTERDAM – Jan. 30, 2018 – The Bitfury Group today released Crystal, a new, all-in-one Bitcoin Blockchain investigative tool designed for use by law enforcement organizations and financial institutions.

    Crystal provides a comprehensive view of the Bitcoin Blockchain and uses advanced analytics and data scraping to map suspicious transactions and related entities. The ground-breaking tool also offers a proprietary “risk scoring” system to assist investigators in revealing and tracking malicious behavior. Crystal was designed to be used by law enforcement agencies to track suspicious bitcoin transactions to real-world entities and determine relationships between criminal actors, and by financial and other institutions engaged in compliance and due diligence

    “Public blockchains have the potential to fundamentally improve our day-to-day lives and be strong forces for social good,” said Valery Vavilov, CEO of the Bitfury Group, the world’s leading full-service blockchain technology firm. “Unfortunately, there are people who exploit public blockchains and take advantage of their pseudonymity to commit crimes. Bitfury’s new Crystal tool will make it much easier to identify and track criminal activities on the blockchain.

    With Crystal, we are taking a critical step toward ensuring that the Bitcoin Blockchain and other public blockchains have a safe and secure future.”

    While blockchain and cryptocurrencies offer significant benefits as tools for peer-to-peer asset transfer, they are also susceptible to misuse by bad actors. As blockchain becomes more widely used, a broader set of tools is needed to track criminal behavior.

    Bitfury’s Crystal is the most comprehensive tool to date, with the ability to link pseudonymous bitcoin payments to real-word entities, identify ownership of bitcoin wallets and connections between different blockchain entities and provide substantial evidence for use by financial investigators.​

    Attached Files:

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  11. Millard Baker

    Millard Baker Member

    The Downside of Tracking Bitcoin on the Blockchain - CoinDesk

    In cryptocurrency, fungibility is at risk, thanks in part to the transparent nature of the blockchain, where wallet addresses are pseudonymous but the flows of funds between them are exposed for all to see.

    Last week brought a reminder of that risk when Bitfury, a startup, introduced Crystal, a set of software tools to help track illicit activity on bitcoin’s public ledger...

    Valery Vavilov, Bitfury’s CEO, said Crystal will enable users to "see if this bitcoin address that you're getting money from is green or black."

    Stepping back, Bitfury, which started as a mining operation, is not the first company to offer this sort of snooping service – as CoinDesk’s article noted, Chainalysis, Elliptic, and Skry (now a part of Bloq) are already in the market...

    But the use of the blockchain in this manner could also have perverse effects.

    Blacklisted balances...
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  12. Millard Baker

    Millard Baker Member

    The NSA Worked to “Track Down” Bitcoin Users, Snowden Documents Reveal

    The NSA’s budding bitcoin spy operation looks to have been enabled by its unparalleled ability to siphon traffic from the physical cable connections that form the internet and ferry its traffic around the planet. As of 2013, the NSA’s bitcoin tracking was achieved through program code-named OAKSTAR, a collection of covert corporate partnerships enabling the agency to monitor communications, including by harvesting internet data as it traveled along fiber optic cables that undergird the internet.

    Specifically, the NSA targeted bitcoin through MONKEYROCKET, a sub-program of OAKSTAR, which tapped network equipment to gather data from the Middle East, Europe, South America, and Asia, according to classified descriptions. As of spring 2013, MONKEYROCKET was “the sole source of SIGDEV for the BITCOIN Targets,” the March 29, 2013 NSA report stated, using the term for signals intelligence development, “SIGDEV,” to indicate the agency had no other way to surveil bitcoin users. The data obtained through MONKEYROCKET is described in the documents as “full take” surveillance, meaning the entirety of data passing through a network was examined and at least some entire data sessions were stored for later analysis.

    At the same time, MONKEYROCKET is also described in the documents as a “non-Western Internet anonymization service” with a “significant user base” in Iran and China, with the program brought online in summer 2012. It is unclear what exactly this product was, but it would appear that it was promoted on the internet under false pretenses: The NSA notes that part of its “long-term strategy” for MONKEYROCKET was to “attract targets engaged in terrorism, [including] Al Qaida” toward using this “browsing product,” which “the NSA can then exploit.” The scope of the targeting would then expand beyond terrorists. Whatever this piece of software was, it functioned a privacy bait and switch, tricking bitcoin users into using a tool they thought would provide anonymity online but was actually funneling data directly to the NSA​
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  13. MindlessWork

    MindlessWork Member Supporter

    Ever since this thread was started, crypto currency has become a riskier place and many steroid sources most likely are either dropping bitcoin or using receivers like MG/WU. I am sure that new crypto technologies will be developed to keep government and law enforcement out so it is like an arms race.
  14. Millard Baker

    Millard Baker Member

    I disagree - I think this thread proves that bitcoin was just as risky 3-1/2 years ago when the thread was started as it is now. The only difference is that now more and more people are finally realizing that bitcoin is not truly anonymous in spite of years of telling them otherwise.

    Having said that, anyone who is switching from crytpocurrencies to MG/WU for anonymity is stupid.

    As I predicted (and warned) in 2014:

    Smart sources would eventually move to bitcoin/cryptocurrency. But also that stupid sources who have no business operating an illegal enterprise would also move to bitcoin/cryptocurrency. Those uninformed sources could potentially jeopardize their freedom:

    Why Smart Sources Will Start Using Bitcoin
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  15. MindlessWork

    MindlessWork Member Supporter

    If crypto can be made all the more safer and less risky then I can see that. Governments as well as financial institutions are making it harder to be anonymous as possible when using crypto currencies.
  16. Millard Baker

    Millard Baker Member

    It's already safer/less risky than WU/MG
  17. Millard Baker

    Millard Baker Member

    Special Agent Lilita Infante at the U.S. Drug Enforcement Administration asks criminals to use Bitcoin:

    It’s a double-edged sword for criminals though, as law enforcement is using blockchain technology to its advantage. Bitcoin and other blockchains are public and immutable, providing a valuable resource for agents to track transactions and patterns, and while wallet addresses once obscured users’ identities, Infante said, “not anymore.’’

    Though users sometimes will exchange Bitcoin for other coins with lower fees and faster transaction times to transfer funds, the overwhelming majority of dealings are still in Bitcoin. Privacy-focused cryptocurrencies like Monero and Zcash aren’t liquid enough and while they’re more anonymous than Bitcoin, “we still have ways of tracking them,’’ Infante said.


    “The blockchain actually gives us a lot of tools to be able to identify people,’’ she said. “I actually want them to keep using them.’’
    Source: Bitcoin Speculators, Not Drug Dealers, Dominate Crypto Use Now
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  18. Masters Power

    Masters Power Member Supporter

    My guess is if the DEA actually wanted drug dealers to keep using bitcoin you wouldn't be reading quotes from DEA agents saying so in published articles.
  19. Michael Scally MD

    Michael Scally MD Doctor of Medicine

    heady muscle likes this.
  20. heady muscle

    heady muscle Member Supporter

    Spot on Millard.
    Millard Baker likes this.