Silk Road forums
Discussion => Security => Topic started by: bon qui on October 25, 2012, 01:58 am
-
If you are a potential vendor inquiring about the nature of getting your cash out of the bitcoin network, you might have asked on here how this is done and been met with frothing silence. Understandably the connection between fiat and bitcoin is a tenuous one, is there really a risk to cashing out and what are the possible attack vectors? As a vendor there are a few:
I. Correlation Attacks
A. Drop Points
LEO orders from you a few times and collects the locations/dates of the mailboxes you used, and assumes you live within 30 miles of these boxes.
B. Tor Usage
LEO collects a list of tor users in your geographical area.
C. Lazy Packaging
You left prints/hair, and they had them on file.
D. Candid Cameras
You walked into the post office or used an automated machine to ship your package and now are on camera.
II. Personal Attacks
A. Supplier Sting
Not much you can do about this but limit contact with your supplier and setup a safety word so he can tip you off and still comply.
B. Pusher Sting
You shouldnt be dealing drugs IRL if you value your safety.
C. GF Sting
If you must put your entire life in the hands of an insecure creature, accept this as an eventuality.
D. Bro Sting
You wanted to show off, tough luck bro'.
These are the possible attack vectors that you have to face if you use your mind and dont make stupid mistakes. For one man operations you run the risk of geographical correlation attacks, particularly if you live in a rural area.
III. Cashing Out
A. The System
You cash out using a bank account others deposit into, an exchange, or one of the many services that will do it for you. These are established businesses with reputations to protect and will do this for 0-5% fee.
B. Black Market
You trust people who are actively involved in illegal activities to cash out for you and send you cash in the mail. You pay 25% for the service and have a chance to receive your money determined by a coin flip.
C. Barter
You sold something you couldn't sell locally for the opportunity to sell something you can sell locally.
Provided you ran your coins through a mixer or two, the only thing linking you to that money is the method by which you receive it. The inherent fear in using The System to do this is that a correlation will be added to the existing correlations of mailing and tor usage, creating probable cause that you, whom was in possession of bitcoins, and within a marked geographic area thinned out by tor usage, must be running an operation and therefore warrants further investigation. That is a justified concern, however there are measures to mitigate this:
IV. De-Correlate.
A. Hide.
Use obfsproxy or a vpn that sits in between you and the tor network, thereby obfuscating your tor usage, vastly increasing your crowd. Note bridges should not be considered a safety measure in and of themselves as its trivial to discover bridges as well as identify tor traffic patterns. Obfsproxy attempts to obfuscate tor traffic by disguising it at http or other traffic. VPN's encrypt your traffic thereby making it appear as you are connecting to the vpn and the vpn is connecting to tor with no man in the middle attacks for determining this, however this places trust in the VPN and therefore you should seek one that has a track record for not keeping logs as well as preferably being located in a country that doesnt comply with the total informational awareness tactics of your country.
B. Find partners.
While this does introduce the risk of a rat, it defers the risk of shipping and processing being all in one location. You can swap out jobs thereby randomizing your drop locations over a wide geography. The best way of approaching this is to keep eachother at arms length through tor//prepaidcell-only contact and use a safety word to protect one another from stings while still getting the perks of working with LEO.
C. Use Proxies
Ask a trusted friend or family member who has no hand in your operations (and knows what to say if the IRS come knocking) to use their bank account for transfers. They can report it as many things, capital gains from bitcoin market, business income for services, etc.... and you would give them their cut (tax+%), so your helping your family out too. The downside to this is you would have cash in hand and wouldnt be able to deposit it into a bank unless you wanted to report it as income and effectively receive double taxation. The upside is the government doesnt know that you have money and cant attack you for having it.
So what is the real risk here? If you are a one man band your risk grows considerably as you move away from civilization, as even with hiding your connection to tor there still exists the mailbox-bitcoin connection which will narrow you down considerably. Two or more people will exponentially increase the relational complexity by which your location can be derived, and even one more person handling the exchange while you run the business will render you virtually anonymous.
-
Good read...I love and totally agree with 4B
but not so in love with 3B
I dont think its a coin flip by any means, all you need to do is some research and you should be safe!
But good read none the less
-
Good read...I love and totally agree with 4B
but not so in love with 3B
I dont think its a coin flip by any means, all you need to do is some research and you should be safe!
But good read none the less
agreed adding someone in the mix adds risks but if you dominate the relationship properly, you can leverage most of the physical risk on someone else..... then its getting into hersey with the police if you are smart.
-
I have to agree with the sentiment on here about cashing out, and without a second person to do this who preferably isnt involved in your operations (so if they get investigated LEO wont find anything) there is a considerable risk in cashing out through the system, as the connection between the drop points and your local bank (mailbox-bitcoin connection) should you try to cash out through an exchange will be enough to warrant an investigation. In this instance using one of the services on here to cash out anonymously is your best bet, although you will have considerable amounts of cash and drugs on hand, so walk lightly and carry a big stick.
-
thanks that was a good read. I've been planning for sometime to write a full cashout guide for mid to high profile vendors, Its actually a lot easier then you think. You just have to be resourceful and bend/break some other laws in the process. The whole idea would be based around creating bank accounts in another persons name and withdrawing from ATMs worldwide. Banking can get creative ;)
-
Setup a bank account in someone elses name? I didnt think that was possible nowadays (at least in the US) given how many forms of id they ask for.
You know if worse comes to worse and you cash out through the system, you could always drive to another city to do all your drops, that way there is no correlation. The flip side to this assumption is even if you are just speculating and not doing anything illegal you could still be investigated if someone else is vending in your town. You begin to wonder what exactly is the necessary burden of proof to initiate an investigation, and by this logic are all bitcoin speculators at risk of becoming suspected drug dealers.
-
The OP makes a very good point about the attack vector of finding a subset of mailing location/tor users.
One further means of correlation I did not see mentioned is that looking at listings and feedback you can come up with a fairly good estimate on how much volume a vendor is doing as far as moving bitcoins is concerned. If they indeed get a list of tor users in the area of your drop location they could check bank records for incoming funds with a similar volume.
Mitigation: Don't drop mail in your areas, use VPN to access tor elsewhere, try to get cash in mail instead of electronic transfers.
This would also be mitigated if SR made it harder to determine the volume a vendor is doing.
Another form of attack would be to monitor this tor connections and record the timestamp on all the posts on this forum and look for matching patterns of communication.
Mitigation: Once again a VPN to access tor(packet timing attack can still be done but perhaps they are only watching tor), alter forum software to randomly modify dates by a few minutes(and also delay the actual posting in case they are watching for arrival of new posts and keeping their own time stamps), function as a tor relay so as to generate lots of traffic unrelated to your activity(it is possible however to distinguish relays from locally created packets with great difficulty)
-
You trust people who are actively involved in illegal activities to cash out for you and send you cash in the mail. You pay 25% for the service and have a chance to receive your money determined by a coin flip.
What about escrow? I wouldn't consider "black market" cashout as a coinflip, depending on the security measures.
25% for not getting fucked by gov etc. is in my opinion a fair price, as long as the cashout guy is legit.
-
Another form of attack would be to monitor this tor connections and record the timestamp on all the posts on this forum and look for matching patterns of communication.
That assumes you arent running as a relay. I did hear of one story where LEO watched a suspects internet activity when they were staking him, and they managed to create a correlation when they saw his activity drop after he left his house.
When it comes to the use of a VPN, i believe this is a very wise choice, as obfsproxy mentioned previously works on the principle that it makes your tor traffic look like http or some other protocol, however it also works on the principle that the attackers DPI software is fooled by this, and even worse, that the bridge you are connecting to isnt already discovered by the attacker. The whole concept of bridges (and dont be fooled by the name, a bridge is just a proxy setup to specifically relay tor traffic) is like having a free VPN that has a big target on its head "hey look at me, im part of the tor network, but you cant see me unless you ask to", its just a limpwristed attempt at subterfuge.
http://www.guptamayank.com/tor-maintain-your-anonymity-online
https://www.torproject.org/docs/proxychain.html.en
https://tails.boum.org/doc/about/warning/index.en.html
What about escrow? I wouldn't consider "black market" cashout as a coinflip, depending on the security measures.
25% for not getting fucked by gov etc. is in my opinion a fair price, as long as the cashout guy is legit.
Actually its a very fair price, as the government will most likely take more than that if you attempt to cash out through the system. Its a coinflip however to have large quantities of cash sent through the mail, as this would be one thing customs would very much like to get their hands on.
-
You forgot one little issue with cashing out through the vendors on here, if they get busted the cops have your address, thats assuming they arent cops to begin with. Cash in mail is a stupid concept no matter which direction you take it.
-
What about escrow? I wouldn't consider "black market" cashout as a coinflip, depending on the security measures.
25% for not getting fucked by gov etc. is in my opinion a fair price, as long as the cashout guy is legit.
Actually its a very fair price, as the government will most likely take more than that if you attempt to cash out through the system. Its a coinflip however to have large quantities of cash sent through the mail, as this would be one thing customs would very much like to get their hands on.
Just because you get your cash in hand does not mean you have dodged the tax man. You can spent it on paperless things but once you want a car or a house or to travel then suddenly this money shows up to the system.
Secretly converting your bitcoins to cash is not the same as laundering.
I think the best way to launder your bitcoins would be to set up a local bitcoin exchange. Not only will you be able to convert at will, but you can choose how much money you want to legitimize.
If you are just spending cash then you only claim your exchanges commission for taxes, if you want to buy a house then put the same bitcoins/money through your exchange over and over until you have made enough commission to buy what you want.
Really though if you are just saving for retirement then buy silver and gold and put it in a safe deposit box.
-
Secretly converting your bitcoins to cash is not the same as laundering.
I think the best way to launder your bitcoins would be to set up a local bitcoin exchange. Not only will you be able to convert at will, but you can choose how much money you want to legitimize.
If you are just spending cash then you only claim your exchanges commission for taxes, if you want to buy a house then put the same bitcoins/money through your exchange over and over until you have made enough commission to buy what you want.
I was reading an article recently that mentioned that although the bitcoin economy is very small, 1.4x the available number of bitcoins in circulation moves through the market every day. This would explain why.
-
Good read...I love and totally agree with 4B
but not so in love with 3B
I dont think its a coin flip by any means, all you need to do is some research and you should be safe!
But good read none the less
Yeah just because scammers might take the coins an run doesnt mean its not a good way to get your money. At least its fairly anonymous once the cash has safely arrived.
-
What about escrow? I wouldn't consider "black market" cashout as a coinflip, depending on the security measures.
25% for not getting fucked by gov etc. is in my opinion a fair price, as long as the cashout guy is legit.
Actually its a very fair price, as the government will most likely take more than that if you attempt to cash out through the system. Its a coinflip however to have large quantities of cash sent through the mail, as this would be one thing customs would very much like to get their hands on.
Just because you get your cash in hand does not mean you have dodged the tax man. You can spent it on paperless things but once you want a car or a house or to travel then suddenly this money shows up to the system.
Secretly converting your bitcoins to cash is not the same as laundering.
I think the best way to launder your bitcoins would be to set up a local bitcoin exchange. Not only will you be able to convert at will, but you can choose how much money you want to legitimize.
If you are just spending cash then you only claim your exchanges commission for taxes, if you want to buy a house then put the same bitcoins/money through your exchange over and over until you have made enough commission to buy what you want.
Really though if you are just saving for retirement then buy silver and gold and put it in a safe deposit box.
Anyone whos in the SR drug game and not in the drug game in RL may have some issues turning the cash into a declared income.. I know many drugs dealers who are worth mega millions and all of them did it with dirty cash...It may be that we live in the most corrupt province in Canada but its real easy here to turn cash into income!!!
thats just my two cents. Also.. gold is about to get whacked.... within the next year i expect it to lose almost 50% of its value. Not everyone has this view and it may be unorthodox but in my mind it makes sense. High grade 1ct and up diamonds on the other hand is a way better investment!
-
You trust people who are actively involved in illegal activities to cash out for you and send you cash in the mail. You pay 25% for the service and have a chance to receive your money determined by a coin flip.
What about escrow? I wouldn't consider "black market" cashout as a coinflip, depending on the security measures.
25% for not getting fucked by gov etc. is in my opinion a fair price, as long as the cashout guy is legit.
I've said this across multiple threads regarding this issue... all the OPs of those threads do is bitch about 25% being 'too much' blah blah blah. It's a very decent rate given all that is involved with other methods.
.Hades.
-
mtljohn... you know diamonds aren't ACTUALLY worth anything, right? There are TONS AND TONS AND TONS of diamonds available... just the companies that control the mines control the flow so their price is synthetically deflated.
Gold & Titanium on the other hand, are VERY finite resources that date back to being used as currency as long as humans have kept records in some cultures. If shit were to hit the fan and global economies were to tank, diamonds wouldn't be worth shit because there are too many of them...
.Hades.
-
mtljohn... you know diamonds aren't ACTUALLY worth anything, right? There are TONS AND TONS AND TONS of diamonds available... just the companies that control the mines control the flow so their price is synthetically deflated.
Gold & Titanium on the other hand, are VERY finite resources that date back to being used as currency as long as humans have kept records in some cultures. If shit were to hit the fan and global economies were to tank, diamonds wouldn't be worth shit because there are too many of them...
.Hades.
If you're in the diamond business they are!! I know people who use diamonds to move money.. how else can you put three million in your shoe and take it to another country???
I know that there are a lot of diamonds and 2 companies control all the diamonds in the world that are conflict free diamonds, I also know that you or I can sell a diamond at market price if we know what were doing... I'm not saying that if you have a 10K diamond and you go to a pawn shop or a jeweler that you will get 10K... But if you know what you're doing you surely can get that 10K.
Diamonds are the number one currency for MAJOR drug dealers and arms dealers. There also used in money laundering by almost every criminal organization on the globe... THIS IS A FACT!
The average joe cant make a cent on a diamond and most probably will lose money but if you know the game and have some connects its the BEST option.
-
Very valid (and accurate) argument. However, as you mentioned, moving diamonds at market rate is a task in and of itself :P
.Hades.
-
Very valid (and accurate) argument. However, as you mentioned, moving diamonds at market rate is a task in and of itself :P
.Hades.
Oh of course tits a task.. but anything that comes easy, is normally not worth anything... gotta work for everything.. if I had a hookup to go to Serra Leon and buy diamonds and smuggle them here i would... Sadly all my hookups for diamonds are here and NY, :(
-
Interestingly enough, I believe I have a contact from someplace in Africa I met during my 'legit' business dealings in NYC... looks like I might be making a few calls ::) Never thought about diamonds...
.Hades.
-
Whats the point in buying diamonds then selling them to put money in the bank, you still might have to explain where the hell you got those diamonds from. Might as well just buy bitcoins and change em out. Explain?
-
If you read back in the thread you will see I was just comparing diamonds to gold as an investment based on the high prices of gold today and how volatile the world economy still is .. not as a turn btc to diamonds or anything...
Diamonds come with paperwork and paperwork comes with questions... if you want to launder money with diamonds then you will need friends in the business to help you, but its the best way to do it as you can move untold amounts of money in a package smaller then a pack of smokes!
-
If you read back in the thread you will see I was just comparing diamonds to gold as an investment based on the high prices of gold today and how volatile the world economy still is .. not as a turn btc to diamonds or anything...
Diamonds come with paperwork and paperwork comes with questions... if you want to launder money with diamonds then you will need friends in the business to help you, but its the best way to do it as you can move untold amounts of money in a package smaller then a pack of smokes!
Sounds more like a 1 way ticket to pound me in the ass prison. Why carry "untold amount of money" on your person when you can just buy "untold amount of btc" and cash it out anywhere in the world? Seems like an unnecessary risk for no real purpose.
-
This is your opinion... you could go buy a million in btc.. but by the time you cash it it out could be worth half... not the case with a 3 ct vvs1 flawless diamond!
-
True, but how again is buying diamonds with dirtymoney laundering? Eventually someone is going to ask how you got your hands on them, and you can say you mugged a guy for his pack of smokes.
-
I'm not going to go in specific details but its very easy...
Just google it or youtube it... I'm sure you will see what I mean.. also I think natgeo did a good documentary on this as well.
But it is easy to turn diamonds bought with dirty money into a legit diamond business, you just have to be in the loop!
-
This is your opinion... you could go buy a million in btc.. but by the time you cash it it out could be worth half... not the case with a 3 ct vvs1 flawless diamond!
ORRRR it could be worth DOUBLE! Volatility works in both directions 8) 8)
.Hades.
-
This is your opinion... you could go buy a million in btc.. but by the time you cash it it out could be worth half... not the case with a 3 ct vvs1 flawless diamond!
ORRRR it could be worth DOUBLE! Volatility works in both directions 8) 8)
.Hades.
;)
-
I've said this across multiple threads regarding this issue... all the OPs of those threads do is bitch about 25% being 'too much' blah blah blah. It's a very decent rate given all that is involved with other methods.
.Hades.
http://dkn255hz262ypmii.onion/index.php?topic=59053.0
I'd really appreciate it, if you could check out my survey and tell me what do you think of it, I'm grateful for every advice / opinion.
For instance I don't see cashing out Bitcoin as a problem, of course it depends where someone lives and how the gov could be bitching about it.
I think EU is in terms of cashing out Bitcoin, anonymously, more relaxed than US.
-
mtljohn... you know diamonds aren't ACTUALLY worth anything, right? There are TONS AND TONS AND TONS of diamonds available... just the companies that control the mines control the flow so their price is synthetically deflated.
Gold & Titanium on the other hand, are VERY finite resources that date back to being used as currency as long as humans have kept records in some cultures. If shit were to hit the fan and global economies were to tank, diamonds wouldn't be worth shit because there are too many of them...
.Hades.
This...
Material science is developing at an astonishing rate. Not only are we doing all sorts of things with common carbon, making diamonds is already one of them.
Buy a $1000 gold coin and a $1000 diamond, then try to sell both of them. You will get $950 for the gold coin and about $20-40 for the diamond.
The value of diamonds is based on consumers paying too much for jewelery because it has diamonds. You can buy diamonds by the bag for $5-50 each.
I go to all the jewellery stores in town and pay about 10% over melt value for gold rings, if they have diamonds I subtract weight. I subtract weight because diamonds are not worth their weight in gold and the jeweler knows it. They know I am in the business so they don't treat me like a punter and try a 300% market on the gold + $200 for the $20 diamond. They just get rid of unwanted merchandise for a bit more than the refinery would give.
When gold rings go to be melted they don't even bother to remove the diamonds, they just vaporize them. It is not worth the effort.
Also, more than 2/3rds of the above ground diamonds are being held by De Beers. They could crash the market at any point, so could a talented thief.
Transmutation of elements on the other hand is still incredibly impractical. You can make diamonds cheap, but making gold requires a particle accelerator and you only make a few atoms that are unstable isotopes.
-
I love science.
That said, there is merit to both sides of the argument. Carrying around $10 million on your person is absolutely possible with diamonds... not so much with gold (or any other valuable element... or cash).
Turning those diamonds into [relatively equal amounts of] cash, though... you got me swinging.
.Hades.
-
mtljohn... you know diamonds aren't ACTUALLY worth anything, right? There are TONS AND TONS AND TONS of diamonds available... just the companies that control the mines control the flow so their price is synthetically deflated.
Gold & Titanium on the other hand, are VERY finite resources that date back to being used as currency as long as humans have kept records in some cultures. If shit were to hit the fan and global economies were to tank, diamonds wouldn't be worth shit because there are too many of them...
.Hades.
This...
Material science is developing at an astonishing rate. Not only are we doing all sorts of things with common carbon, making diamonds is already one of them.
Buy a $1000 gold coin and a $1000 diamond, then try to sell both of them. You will get $950 for the gold coin and about $20-40 for the diamond.
The value of diamonds is based on consumers paying too much for jewelery because it has diamonds. You can buy diamonds by the bag for $5-50 each.
I go to all the jewellery stores in town and pay about 10% over melt value for gold rings, if they have diamonds I subtract weight. I subtract weight because diamonds are not worth their weight in gold and the jeweler knows it. They know I am in the business so they don't treat me like a punter and try a 300% market on the gold + $200 for the $20 diamond. They just get rid of unwanted merchandise for a bit more than the refinery would give.
When gold rings go to be melted they don't even bother to remove the diamonds, they just vaporize them. It is not worth the effort.
Also, more than 2/3rds of the above ground diamonds are being held by De Beers. They could crash the market at any point, so could a talented thief.
Transmutation of elements on the other hand is still incredibly impractical. You can make diamonds cheap, but making gold requires a particle accelerator and you only make a few atoms that are unstable isotopes.
Was this supposed to be a joke or something... first of all I'm talking DIAMONDS not Moissanite... second.. I;m not talking buying diamonds retail in a ring.... third... I'm talking about real deal stones.. not some little 5-10 pointers which you can get a CT for 1000$
Please if you want to discuss diamonds dont talk about shitty si1 type stones you find at every jewelery store... I'm talking about quality stones over 1Ct.
I have been in the diamond business one way or another for a while and happen to know a thing or two! ;)