Finally got some proof of this shiznit.
https://www.reddit.com/r/Bitcoin/comments/2q90m9/coinbase_is_monitoring_your_transactions_poorly/
If you do this, stop. Use an intermediate wallet or two, at the very least. Tumbling is even better.
Coinbase to market is a really bad idea ya'll [post from /r/bitcoin]
Finally got some proof of this shiznit.
https://www.reddit.com/r/Bitcoin/comments/2q90m9/coinbase_is_monitoring_your_transactions_poorly/
If you do this, stop. Use an intermediate wallet or two, at the very least. Tumbling is even better.
[23 Points] None:
[20 Points] sobulbous:
I posted that Coinbase was doing this awhile ago. Every transaction that leaves the Coinbase internal blockchain gets logged and technically counts against your gain/loss total that they will start reporting to the IRS if they haven't already.
They are complying to stay viable. If you notice they now offer a complete history of transactions for tax purposes. FIFO applies and let's say you bought Bitcoin through Coinbase today and sent to an external wallet tomorrow, that transaction is counted as a sale at current market price even though you never technically turned it back into fiat.
This is because Coinbase assumes that your transfer was used to make a purchase of some sort whether that is true or not. It is an umbrella policy that they decided to use to comply with regulators. No doubt they track where the BTC goes, big data is big money.
[13 Points] DeadPrateRoberts:
I did this, Coinbase to SR wallet, back when I used SR1. When it was seized, there was a Blockchain? list concerning the FBI's wallet that had just swollen with seizure money, and all the transactions from SR users' wallets to the FBI wallet were recorded. I searched the list for my wallet, and sure enough, there it was. They got like $250 from me. I'm sure I'm on a list now.
[13 Points] None:
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[9 Points] noiro777:
I wouldn't send btc directly to a mixer as this might be considered suspicious. It's probably best to send to an intermediate wallet first and then to a mixer.
[8 Points] Jerk-Face:
This is quoted from another post. I can't do all the bells and whistles on a link cause I'm using Bacon Reader. BUUUUT
Here's the original post:
"There is so much paranoia surrounding tumbling. I'll preface this by saying that I do tumble my coins, but is it necessary? For buyers, not really. As a buyer, if you don't tumble your coins, nothing will happen. Blockchain analysis has been talked up on dark market sites as a nearly omniscient technique that can identify anyone easily. Reality: using blockchain analysis to identify unknown people is simply impossible. Far more important is encrypting your address.
Picture yourself as LE trying to identify an unknown suspect using nothing but the flow of coins through random bitcoin wallet addresses. You can't tell if any given address is a private wallet, belongs to a dark market, to Coinbase, to Circle, to LBC, to a gambling site, or anything else. You can't subpoena the dark market. You can't subpoena all known bitcoin exchanges on the mere hunch that a wallet might belong to one of them. Even if a DNM user buys coins in their own name through Coinbase, sends them directly to a DNM, buys something, then sends any remaining coins directly back to Coinbase to cash them out, the coins still aren't fully traceable because all DNMs have internal tumblers. The entire concept is absurdly far-fetched. If blockchain analysis were truly as powerful as some like to think, tons of vendors would be dropping like flies and rounded up within weeks. Reality: likely fewer than 1% of darknet vendors have ever been caught.
You will never see blockchain analysis mentioned in a vendor indictment as hard proof that DNM Vendor X was cashing out coins using Service Y. Not going to happen. One of the Ulbricht indictment documents explicitly mentioned that the SR1 internal tumbler rendered blockchain analysis pointless.
Why bother tumbling coins, then? For vendors anyway, blockchain analysis could theoretically be used after-the-fact as circumstantial evidence. First identify a suspect behind a vendor/buyer account, then subpoena CoinBase and see if they have an account there, and what wallets are tied to it. But remember, all vendors to date -- without exception -- have been caught through normal police work, package profiling, and vendor slip-ups. Not blockchain analysis.
The way some folks here talk up tumbling promotes an extreme sense of paranoia among newbies who don't know any better. You didn't tumble your coins? Guess what, nothing is going to happen."
[10 Points] Theeconomist1:
For some reason I couldn't copy the bitcoin address properly, I guess I'm misreading a character or two so can't look at the blockchain. But regardless, this is very odd. The specificity of the accusation is what is making me wonder about this. Let's just assume that the OP is either lying about buying illegal shit OR he sold coin to someone who bought illegal shit (for this discussion it actually is immaterial WHO bought illegal shit, the only material point is that Coinbase was able to tell that someone bought illegal shit along the blockchain line). Most markets have an internal tumbler so there is no way for Coinbase to know what OP bought. Even if Coinbase knows that a wallet is a DNM generated wallet, they can't know anything about the transaction. For one there is a tumbler, two, even if by miracle they could de-tumble the market tumble, its still just a transaction.
So why is Coinbase saying with such specificity on what was purchased? It is possible that the market address belonged to a marijuana only market OR there are clearnet markets out there that accept bitcoin and sell marijuana products. I'd think that Coinbase, if they knew that the wallet was some DNM market wallet, they'd say "buying things of an illegal nature." Are there clearnet sites that sell marijuana? If so, its entirely possible that a clearnet site wouldn't go through the precautions of having a tumbler (fuck, they are being stupid being on the clearnet, so I assume opsec sucks). This would be better news b/c it would stand to reason that Coinbase could figure out that site's wallet and blacklist it. If this is real and not bullshit, I am hoping this is the case b/c it doesn't break our assumption that DNM wallets are "anonymous" and no way to tell if a wallet is a market wallet.
I could have several theories IF Coinbase hadn't been so specific with the accusation. Given they were, I don't have any great theories. Here are some of possibilities:
This is all bullshit FUD
There are some clearnet sites that sell marijuana products and that site's wallet was easily obtained by Coinbase and they blacklisted it. Given many states have now legalized marijuana it would not surprise me to see clearnet sites pop up that sell it. I haven't looked at all, so don't know if this is a possibility, but people are stupid and can see this being a possibility.
The specificity of the product purchased is a red herring and Coinbase just put that in there for whatever reason BUT they somehow knew the transaction was to a DNM wallet. I'd wonder how the fuck they'd know for a market like Evo which generates new wallets each time.
Again, the specificity is a red herring, but Coinbase has analysis tools that can tell if something sketchy is going on with a wallet. I figure its possible to have some tools that could tell whether a wallet is more likely than not tumbling. Since many DNM markets tumble internally, this could the case here too.
So I don't know. Wouldn't surprise me if this is FUD or option #2. I don't like #3 and #4 b/c that would imply my worst fears about how the blockchain is used and analyzed. If this is the case, tumbling is a problem too b/c that would pop up as a red flag. I haven't gotten anything like this from Coinbase, so I don't know. If we are looking at option #2, I could see how that would be easy for Coinbase to figure out, this is shitty opsec if there are clearnet sites selling marijuana.
So why couldn't this just be FUD? I do get that a company like Coinbase, who is legit, would monitor shit like this, just liek a bank would, b/c of all the regulations and uncertainties in this area. But I'm confused as to how they would know? Would Coinbase actually go so far as to build analysis tools to figure this out? Not in their best interest IMO. Obvious illegal shit, yes, they have to come down on that. But you can take a "hear no evil, see no evil" type of approach. As long as you aren't obvious with it, Coinbase shouldn't care.
I'm going to give this more thought. Very provoking indeed.
[6 Points] twigburst:
Tumbling is fucking stupid. If the markets are putting it into a unique wallet they aren't going to be able to tell. If you want deniability you can just split it into 4 different wallets over a few days and then send it to your account.
[5 Points] dhamm44:
Saw this last night as well. Good post. Don't send from coinbase to your dnm!
[6 Points] None:
Yikes. Guess I'll stop doing that.
[3 Points] cannabisity:
but bad things don't happen to me
[2 Points] shadowofashadow:
I don't get how they can know if you tumble or move the coins to at least one wallet before market. It sounds like they are banning people all the way down the blockchain.
[2 Points] None:
May I ask what 'tumbling' is?
[2 Points] letopseyturv:
Thank you for posting this man! I almost always buy from LocalBitcoins or Coinbase. Then send to a local wallet or sell them to friends who want fast coins. Thank you again, will for sure tumble my coins for now on.
[2 Points] None:
They are trying to be a seriously legit company..who ever thought that would have been a good idea?
[2 Points] reekleek:
What about from LBC?
[2 Points] Waka_Flocka_Gainz:
I always move mine between various wallets before sending to a market. I'm sure it's not foolproof, but it's a lot better than just sending straight to a market.
[2 Points] ApricockApecot:
Coinbase is fucked as hell to gain access to anyway. LBC ftw.
[2 Points] bitblender:
As a response to what Coinbase is doing here i have implemented a feature on the Bitcoin Blender mixer to help against this.
If you are using Bitcoin Blender to mix coins to or from Darknet Markets you can now set your account type to either Buyer or Vendor on the Profile page. If you are not comfortable giving this information to Blender you can set it to N/A or not set it at all.
If you set your account to Vendor you will receive mixed coins deposited by Buyers when withdrawing, this means that you should receive coins coming from exchanges like Coinbase, Circle and Localbitcoins or where Buyers get their coins from.
If you set your account to Buyer you will receive mixed coins deposited by Vendors when withdrawing, your deposited coins to Blender should not end up on a Darknet Market.
If you set your account to N/A or don't make a choice you will receive mixed coins deposited by other N/A users.
This is good for both Buyers and Vendors. The Buyers can feel safe knowing the coins they deposit into Blender will not end up on a Darknet Market and the Vendors that withdraw from Blender will receive clean coins coming from Exchanges. This will keep the clean/Exchange coins on one side and the Darknet Market coins on the other side. This is not a 100% guarantee that coins will be sent exactly as described above as it will only work if the users chooses the right type for their Blender account or don't by purpose choose Vendor when they are actually a Buyer for example. At least having this option is better than not having it. If i come up with a better idea in the future i will change this, we will see how it goes.
[2 Points] None:
My god, I have been trying to explain how bad an idea it is to do the Coinbase to Market method for so long. In a post in a recent thread I tried to explain this, I was ripped and told I was paranoid, tinfoil hat was mentioned. I finally was just like, "ooookay, good luck."
Understand, if you buy your coins from a site like Coinbase, where they rape you for personal info., (Coinbase wanted to know every address my friend had lived at for the past 10 years, picture ID's, bank info, credit card numbers, etc) you announcing your activities publicly. That's a fact.
Please listen to BitBlender or Grams, or at the very least read the DNMS for noobs section of reddit, to at least get the vaguest idea of what your doing. It's like thinking you could pass the Bar Exam without studying law. (Also note, Coinbase is not the only one, any site that makes you give all your personal info is an extreme risk.)
Thanks for the post galaxyandspace! And thanks to BitBlender and Grams for spitting their knowledge.
[1 Points] telracs:
Circle ftw
[1 Points] None:
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[1 Points] R4ID:
let the tumbler nay say'ers be gone :) should maybe be a PSA perhaps?
[1 Points] throwwawayyfoe:
How can they tell what is and isn't a wallet in a DNM versus any other wallet?
[1 Points] BoxAddict:
My modus operandi was usually as follows. Coinbase>blockchain wallet>bitcoinqt>DNMwallet
I would max out on shared coin transactions. I know this isn't the safest way possible to cover tracks but imho if someone is looking for me because I bought a g of mdma once ever 6 months or the occasional blow or crank they deserve to get me. I never got beyond personal amounts and always routed thru a VPN and of course TOR.
Footnote here: my main reason for not tumbling and using shared coin instead was during this time most of the services were either taking a long time to tumble or stealing coins.
[1 Points] None:
Well if you use agora you're in the clear because it has an internal tumbler.
[1 Points] None:
I still don't see how tumbling is any safer than creating a new address to do one-time deposit to. It seems to me that the addresses in the tumbler have potentially already been associated with tumbling. My address that was created 5 minutes ago has yet to be associated with anything.
[1 Points] DnmAvenger:
Where'd some of these comments come from? FBI field office? Who even said that any government office was involved? Idk This guy says he did not buy anything illegal. Maybe it is not coinbase monitoring anyone. Maybe someone notified coinbase. Wallet addresses are recycled. I have always tumbled, but the fact is if you purchase coin on coinbase they can be traced back to you. Tumble or not. If you do something that makes the Feds look at you they will take all the steps and go through the trouble to track you down no matter what.
[1 Points] CrapCoin_Investor:
This would be brilliant scheme by say helix. Scare everyone in to tumbling. Real or not its grate for gramsadmin.
[1 Points] None:
No one ever gets caught in blockchain analysis. This guy probably bought something off a clearwebsite for marijuana products...
[0 Points] impost_r:
Remember when I said this a couple of weeks ago? Finally proof.
[0 Points] ihavebigtanks:
This should be common knowledge. A month before SR1 went down, coinbase was labeling silkroad wallets on your transaction page with "silkroad address". No joke.
[-2 Points] None:
Are people really stupid enough to drop their coins right from the exchange into a criminal market?
[-4 Points] i949rjfj:
And just think, everyone who listened to the other chumps on here that said you dont need to use a mixer, now your DNM buy is on file at your local fbi field office.
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