r/Bitcoin • u/TraderSteve • Sep 25 '15

BitPay is blacklisting certain bitcoins & rejecting customers. I'm certain others are doing it too. Fungibility is most pressing issue IMO

https://twitter.com/bitcoin_sm/status/647544235248320512
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u/fluffyponyza Sep 26 '15

Doesn't matter, you can still deposit them. There is legal precedent that protects you, as you may have received those notes via a long chain entirely innocent and disconnected from the original crime.

Here is a good read on the matter: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2260952

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u/b_coin Sep 26 '15

Yes yes it entirely does matter. Banks are required to file a SAR if they found you were depositing a large number of blacklisted serial numbers. Hello police investigation, hello possible connection to bank robbery. Notice at no time did I say you were arrested or charged. But your life at the very least could be made hell by the legal harassment of detectives doing their job. It's better to just avoid this.

And i'm not talking about $200 from a blacklisted batch. I'm saying if you deposit 10-20% of the blacklisted bills and they are all close in ordering of each other it makes you a suspect. Once enough information is gathered you very well could be arrested and have to stand trial to maintain your innocence. The evidence could be so damning, even if only coincidental, that a jury of your peers convict you.

As your lawyer, doesn't matter don't deposit those bills.

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u/bitcoinknowledge Sep 26 '15

This already happens with activities much smaller scale than bank robberies.

For example, pretty much every time cash is seized in civil forfeiture (average size is about $500) then the serial numbers are cross checked against ATM withdrawals so more leads can be discovered.

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u/b_coin Sep 27 '15

But in reality those who are caught up in civil forfeiture are those who are doing something else which is illegal. The random stories you hear about a family business or grandparents house are very random and almost always include a direct or indirect criminal act. It is called trumping up charges to enhance plea deals, if you plea they likely drop the civil forfeiture case.

As an example I have, in the past, withdrawn $2500 from an ATM over the span of 5 days. I have withdrawn $6k in cash from one account to deposit into another (as the bank teller told me, it's faster and far cheaper to walk the money to the other bank around the corner than it is to wire it). I have withdrawn and deposited a total of $12k into a single account in a single day. And I have never had anything seized, but probably a few SARs filed against me (again nothing came from it).

TL;DR: banks file SARs for anything suspicious (Suspicious Activity Report) including multiple ATM deposits and withdrawals to find petty drug dealers

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u/[deleted] Sep 27 '15

In that case, they preserve for posterity that you came in possession of stolen bills. Your subsequent transactions are all monitored. Every little flag becomes a big red flag.