<p>Bitcoins can be exchanged to dollars in questionable exchanges like BTC-E or LocalBitcoin. These exchanges are not interested in the source of Bitcoin, do not co-operate with authors (police) and thus scammers are able to do cash out stolen Bitcoins. You can only see the Bitcoins go into the exchange, but the exchange won't give you, or the authors, the details who is the user who is cashing out.</p>

<p>Furthermore, when more legit exchanges try to make sure they follow Know Your Customer rules and demand the users to show the proof the Bitcoins they are selling are not stolen, there is <a href="http://www.coindesk.com/coinbase-seeks-details-us-bitcoin-mining/" rel="nofollow">a backslash from Bitcoin community</a>. Some libetarian parts of Bitcoin community do not wish to destroy Bitcoin fungibility, e.g. making sure that criminally obtained Bitcoins cannot be discriminated from legally obtained Bitcoins. This is because much of Bitcoin transactions are fuelled by dark markets which are outright illegal.</p>

<p><a href="http://www.reddit.com/r/Bitcoin/comments/2zrdxz/withdrawals_halted_as_stolen_evolution_coins_make/" rel="nofollow">Please see recent discussion with Evolution exit scam</a>.</p>

CC BY-SA 3.0
2015-04-02T16:17:11.020Z
So bitcoin can only be traced in one direction? Bitcoin Chain > Owner > Who transferred 2 > Who transferred 1. and can not be traced in reverse direction?
Amirreza Nasiri
CC BY-SA 3.0
2015-04-02T16:20:46.527Z
It can be traced to both directions.
Mikko Ohtamaa
CC BY-SA 3.0
2015-04-03T10:06:18.377Z
@MikkoOhtamaa This is by and far the most succinct appraisal of one of the Bitcoin ecosystem's biggest problems; in fact, I question why BTC-e isn't raising red flags and the ire of the authorities in a manner similar to the DNMs, especially given the swift and decisive action Mt.Gox has dealt.
Wizard Of Ozzie
CC BY-SA 3.0
2015-04-04T14:36:05.123Z
First to stop accepting stolen Bitcoins is the first to lose the profit.
Mikko Ohtamaa
CC BY-SA 3.0
2015-04-02T16:13:25.387Z
2015-04-02T17:03:29.453Z
2015-04-02T17:03:29.453Z
Mikko Ohtamaa
<p>If I posted a brainwallet password here encoding a private key with unspent Bitcoins and you redeemed the Bitcoin, I <strong>know</strong> it was someone called @AmirrezaNasiri: </p>

<ol>
<li>How does one go about identifying your <em>actual identity</em>? </li>
<li>How does your online/real-life identity help me recover irreversibly spent Bitcoin?</li>
<li>How do I prove the scammer is lying when they claim foul play at the hands of a hacker? blame a hacker</li>
<li><em>Assuming I have proof of your identity though</em>, what legal repercussions can an <em>internationally based</em> identity expect to face from <em>my country's</em> laws?</li>
</ol>

<p>But let's assume a best case scenario, where an online identity is linked to a known real-life identity. And let's assume the victims are scammed by someone who is a citizen of the same country. Pretty unlikely? Well, <strong><a href="https://en.bitcoin.it/wiki/Inputs.io" rel="nofollow">all this actually happened</a></strong> with the $1.8 million "hack" of Inputs.io; <a href="http://www.theage.com.au/it-pro/security-it/australian-bitcoin-bank-hacked-1m-stolen-20131108-hv2iv.html" rel="nofollow">the admin's response to the Australian media:</a></p>

<blockquote>
  <p>(Inputs.io admin TradeFortress) said he won't be reporting the incident to law enforcement because there were "extremely limited actions" it could undertake considering the currency can't be easily traced.</p>
</blockquote>

<p>It's actually very simple: <strong><em>if you don't hold the private keys to your Bitcoin, you don't own them</em></strong> </p>

CC BY-SA 3.0
2015-04-03T09:56:47.090Z
2015-04-03T10:22:45.997Z
2015-04-03T10:22:45.997Z
Wizard Of Ozzie
<p>Let me write an example. A hustler give some people his bitcoin address and these people transfer some bitcoins to his wallet. According to the term, which says that bitcoin transaction is traceable so my question is that why the hustler uses this method? He knows that he can be tracked!</p>

<transactions><fraud><traceability>
If Bitcoin is traceable, how bitcoin scams are exist?
Amirreza Nasiri
# If Bitcoin is traceable, how bitcoin scams are exist?

(Asked by: username_0 on 2015-04-02)

Let me write an example. A hustler give some people his bitcoin address and these people transfer some bitcoins to his wallet. According to the term, which says that bitcoin transaction is traceable so my question is that why the hustler uses this method? He knows that he can be tracked!

**Tags:** transactions, fraud, traceability


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## 2 answers

### Answer by username_1 on 2015-04-02. Score: 2

Bitcoins can be exchanged to dollars in questionable exchanges like BTC-E or LocalBitcoin. These exchanges are not interested in the source of Bitcoin, do not co-operate with authors (police) and thus scammers are able to do cash out stolen Bitcoins. You can only see the Bitcoins go into the exchange, but the exchange won't give you, or the authors, the details who is the user who is cashing out.

Furthermore, when more legit exchanges try to make sure they follow Know Your Customer rules and demand the users to show the proof the Bitcoins they are selling are not stolen, there is [a backslash from Bitcoin community](http://www.coindesk.com/coinbase-seeks-details-us-bitcoin-mining/). Some libetarian parts of Bitcoin community do not wish to destroy Bitcoin fungibility, e.g. making sure that criminally obtained Bitcoins cannot be discriminated from legally obtained Bitcoins. This is because much of Bitcoin transactions are fuelled by dark markets which are outright illegal.

[Please see recent discussion with Evolution exit scam](http://www.reddit.com/r/Bitcoin/comments/2zrdxz/withdrawals_halted_as_stolen_evolution_coins_make/).

> **Comments:**
> **username_0**: So bitcoin can only be traced in one direction? Bitcoin Chain > Owner > Who transferred 2 > Who transferred 1. and can not be traced in reverse direction?  
> **username_1**: It can be traced to both directions.  
> **username_2**: @username_1 This is by and far the most succinct appraisal of one of the Bitcoin ecosystem's biggest problems; in fact, I question why BTC-e isn't raising red flags and the ire of the authorities in a manner similar to the DNMs, especially given the swift and decisive action Mt.Gox has dealt.  
> **username_1**: First to stop accepting stolen Bitcoins is the first to lose the profit.  

---

### Answer by username_2 on 2015-04-03. Score: 0

If I posted a brainwallet password here encoding a private key with unspent Bitcoins and you redeemed the Bitcoin, I **know** it was someone called @username_0:

1. How does one go about identifying your *actual identity*?
2. How does your online/real-life identity help me recover irreversibly spent Bitcoin?
3. How do I prove the scammer is lying when they claim foul play at the hands of a hacker? blame a hacker
4. *Assuming I have proof of your identity though*, what legal repercussions can an *internationally based* identity expect to face from *my country's* laws?

But let's assume a best case scenario, where an online identity is linked to a known real-life identity. And let's assume the victims are scammed by someone who is a citizen of the same country. Pretty unlikely? Well, **[all this actually happened](https://en.bitcoin.it/wiki/Inputs.io)** with the $1.8 million "hack" of Inputs.io; [the admin's response to the Australian media:](http://www.theage.com.au/it-pro/security-it/australian-bitcoin-bank-hacked-1m-stolen-20131108-hv2iv.html)

> (Inputs.io admin TradeFortress) said he won't be reporting the incident to law enforcement because there were "extremely limited actions" it could undertake considering the currency can't be easily traced.

It's actually very simple: ***if you don't hold the private keys to your Bitcoin, you don't own them***


---

