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Can stolen or otherwise tainted coins be laundered through mining fees?

Started by Bitcoin, Feb 28, 2022, 10:21 am

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Bitcoin

Can stolen or otherwise tainted coins be laundered through mining fees?

Do chain analysis techniques consider the fee portion of block rewards as tainted funds?


e.g. if known stolen funds are moved in a certain block, the fees the sender pays end up "polluting" the block reward. I want to know how much weight this taint actually gets when it comes to chain analysis. Would the largest exchanges accept these coins as deposits?


If so, then a thief could launder the funds by colluding with a miner. e.g. do a self transfer that pays 10% in fees; don't broadcast the tx, just pass it to the colluding miner who mines it and later returns a portion of the fees to the thief out of the block reward.


If not, then a thief could taint every block's reward by simply self transferring a minimal amount with sufficient fees for next block. Then none of the blocks rewards can be deposited in any heavily regulated exchange. I guess miners could censor those txs if the thief's UTXOs are well known, but it's still an attack vector I guess.


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