Inside a bitcoin laundry II: Bitcoin Fog
Wednesday 27 May 2015
Want to wash some coins? Here’s how.
Last time we looked at bitcoin laundries - what they are, what they do, and why you might use one - and no, it’s not all about washing ill-gotten gains before going on a crystal meth-buying spree; there are plenty of legitimate reasons you might want untraceable bitcoins. This time, we’re taking a look at Bitcoin Fog, the most popular bitcoin laundry on the (dark)web.
Read also: Tor tutorial
You’ll need Tor to get started, since the darkweb isn’t accessible using a regular browser. Then head on over to the laundry, via the link you’ll find on http://www.bitcoinfog.com.
How does it work? Well, it’s pretty simple. ‘You register an account on our website and deposit bitcoins to the designated address. After a couple of network confirmations [actually six], your money is registered on your Fog account, and you can schedule withdrawals. Each withdrawal will be split in a random number of payouts, depending on the amount, and the relative size of each payout will be randomized as well. Even the timing of those payouts will be randomly spread out over a period of time you will specify.’ Simples.
Bitcoin Fog withdrawals require six confirmations and a minimum delay of six hours for safety. The service is not designed for a quick wash, but then, security and speed don’t go together anyway. They’re entirely used to dealing with larger amounts of 100 bitcoins and upwards (‘for amounts above 100 BTC we recommend [waiting] a day, above 300 BTC a couple of days, about a week for 1000 BTC, etc.’), but their minimum withdrawal is just 0.035 BTC.
Bitcoin Fog. Not exactly reputable, but certainly professional
Since I want to be particularly careful, I’m going to start with a pre-wash cycle. That means creating an entirely new bitcoin address using my blockchain.info wallet, and sending some coins there before depositing them in Bitcoin Fog. The idea is to make sure that no one knows I’m even using Bitcoin Fog. Sending funds back from an exchange is a pretty good way of making them untraceable to the casual snooper, since most exchanges pool funds in a hot wallet. It would be possible to learn more with the exchange’s cooperation, but someone would have to know they needed it first - and have good reason to get it. I buy $10 at Bitstamp and send them to my pre-wash account. If I was being super-careful, I’d use a Chinese exchange that is highly unlikely to cooperate with any western authorities. (If I was being super super careful, I’d do all this over Tor too, just in case.)
Whilst that’s processing, I create a Bitcoin Fog account - a simple matter of a login name and address. Unsurprisingly, there’s no requirement for an email address. Then off the coins go from the pre-wash account to my new Bitcoin Fog address.
A few confirmations later and the funds are there. I wait a few hours, for safety. I’m also creating a separate, entirely new address for the funds to go back to. If you use a pre-existing address, even the pre-wash address, then there’s a link between transactions and the process has been pointless.
Next week, I’ll take a look at the withdrawal process, and the effect it has on traceability.
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