Obscurity via Cross-Coin Exchanges

rysiek rysiek at hackerspace.pl
Fri Mar 7 15:13:06 PST 2014


Dnia piÄ…tek, 7 marca 2014 21:43:38 Cathal Garvey pisze:
> (...)
> What about simply exchanging different blockchain based coins, though?
> Would that not help to "launder" with reasonable efficacy, provided both
> participants use crypto to hide the transaction? From the outside,
> transactions occur on both blockchains, but there's no "data trail"
> correlating the transactions with one another as there is within each
> blockchain.

This is interesting.

> So, Alice buys .4 btc from a friend, but knows the friend's opsec might
> be poor, or that the transaction may have occurred over a bad channel,
> or that the coins were purchased from an exchange that demands valid
> phone numbers, etc.: she wants to launder.
> She contacts Bob, a Dogecoin seller, to set up a private exchange. She
> asks him to sell her 0.4btc worth of Dogecoin in two transactions of
> unequal value (to prevent analysis by exchange rate to ID their
> transaction). They conduct the exchange over an encrypted channel.
> From the outside, someone knows she's laundering, and just bought
> Dogecoin, but because they don't know her Dogecoin receiving addresses,
> they've lost the scent;

Well played, Sir, I didn't see that pun coming!

> she now has 0.4btc worth of Dogecoin, and can convert that back to btc
> againin the same way.
> In a round trip, she's broken the chain; she keeps her value, minus
> fees, of 0.4btc, but now it's in different btc, with no
> blockchain-recorded transaction logs to link the original, tainted btc
> to the new, clean btc.

Wouldn't it be possible and even possibly more effective (no 3rd party 
involved, any price can be set) for Alice to do the round-trip by herself? As 
in: Bob == Alice?

I.e. generate a new Dogecoin wallet, generate a new BTC wallet, and use these 
for the back-and-forth?
> As a way for an individual to "launder", does this look plausible? Is it
> any better or worse than laundries as they currently exist?

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