Transaction surveillance company - Revision history

Calliptamus: /* Spying technology */

2025-05-17T09:16:38Z

Spying technology

← Older revision		Revision as of 09:16, 17 May 2025
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	There are a number of techniques probably used by transaction surveillance companies:		There are a number of techniques probably used by transaction surveillance companies:

	* AML/KYC information. Many bitcoin exchanges require users to undergo Anti-Money Laundering and Know-Your-Customer (AML/KYC) checks, which requires users to reveal all kinds of invasive personal information such as their real name, residence, occupation, net worth and income. All this information is usually passed onto the exchange's partner transaction surveillance company, which keeps a database linking the victim's personal information with their bitcoin [[address]]es and [[transaction]]s.		* AML/KYC information. Many bitcoin exchanges require users to undergo [[Anti-Money Laundering]] and Know-Your-Customer (AML/KYC) checks, which requires users to reveal all kinds of invasive personal information such as their real name, residence, occupation, net worth and income. All this information is usually passed onto the exchange's partner transaction surveillance company, which keeps a database linking the victim's personal information with their bitcoin [[address]]es and [[transaction]]s.
	* Blockchain analysis. Bitcoin on-chain [[transaction]]s are visible to all and so can be analyzed. Important techniques are the [[Common-input-ownership heuristic]] and [[address reuse]].		* Blockchain analysis. Bitcoin on-chain [[transaction]]s are visible to all and so can be analyzed. Important techniques are the [[Common-input-ownership heuristic]] and [[address reuse]].
	* Wallet synchronization analysis. Bitcoin [[lightweight node\|lightweight wallets]] often download their own history and balance by querying a third-party server. Transaction surveillance companies often try to exploit this to learn which [[address]]es and [[transaction]]s belong to certain wallets. The companies have been known to collect [[BIP37 privacy problems\|BIP37 filters]] from BIP37-enabled wallets. They almost-certainly also run many [[Electrum]] servers which can spy on any [[Electrum]] wallet that connects to them.		* Wallet synchronization analysis. Bitcoin [[lightweight node\|lightweight wallets]] often download their own history and balance by querying a third-party server. Transaction surveillance companies often try to exploit this to learn which [[address]]es and [[transaction]]s belong to certain wallets. The companies have been known to collect [[BIP37 privacy problems\|BIP37 filters]] from BIP37-enabled wallets. They almost-certainly also run many [[Electrum]] servers which can spy on any [[Electrum]] wallet that connects to them.

Elitreum: Incorporated additional instances to diversify the illustrative pool, considering that the initially supplied examples were predominantly centered around the United States.

2023-08-23T06:17:26Z

Incorporated additional instances to diversify the illustrative pool, considering that the initially supplied examples were predominantly centered around the United States.

← Older revision		Revision as of 06:17, 23 August 2023
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	* https://www.elliptic.co/		* https://www.elliptic.co/
	* https://cipherblade.com/		* https://cipherblade.com/
			* https://www.cryptolegal.uk/
	* https://www.neutrino.nu/		* https://www.neutrino.nu/
	* https://www.coinfirm.io		* https://www.coinfirm.io
			* https://www.legalbyte.io/
	* https://blockchaingroup.io/		* https://blockchaingroup.io/
	* https://ciphertrace.com/		* https://ciphertrace.com/

Furunodo: [dot] => . fungibility

2020-06-17T21:47:32Z

[dot] => . fungibility

← Older revision		Revision as of 21:47, 17 June 2020
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	Most importantly, financial privacy isn't incompatible with things like law enforcement or transparency. You can always keep records, be ordered (or volunteer) to provide them to whomever, have judges hold against your interest when you can't produce records (as is the case today). None of this requires _globally_ visible public records.		Most importantly, financial privacy isn't incompatible with things like law enforcement or transparency. You can always keep records, be ordered (or volunteer) to provide them to whomever, have judges hold against your interest when you can't produce records (as is the case today). None of this requires _globally_ visible public records.

	Globally visible public records in finance are completely unheard-of. They are undesirable and arguably intolerable. The Bitcoin whitepaper made a promise of how we could get around the visibility of the ledger with pseudonymous addresses, but the ecosystem has broken that promise in a bunch of places and we ought to fix it. Bitcoin could have coded your name or IP address into every transaction. It didn't. The whitepaper even has a section on privacy. Sufficient privacy is an essential prerequisite for a viable digital currency<ref>https://bitcointalk~~[dot]~~org/index.php?topic=334316.msg3588908#msg3588908</ref>.		Globally visible public records in finance are completely unheard-of. They are undesirable and arguably intolerable. The Bitcoin whitepaper made a promise of how we could get around the visibility of the ledger with pseudonymous addresses, but the ecosystem has broken that promise in a bunch of places and we ought to fix it. Bitcoin could have coded your name or IP address into every transaction. It didn't. The whitepaper even has a section on privacy. Sufficient privacy is an essential prerequisite for a viable digital currency<ref>https://bitcointalk.org/index.php?topic=334316.msg3588908#msg3588908</ref>.

	The right to privacy is recognized as a human right by the US constitution, European Union regulations and the Constitution of India<ref>https://en.wikipedia.org/wiki/Right_to_privacy#Privacy_laws_in_different_countries</ref>.		The right to privacy is recognized as a human right by the US constitution, European Union regulations and the Constitution of India<ref>https://en.wikipedia.org/wiki/Right_to_privacy#Privacy_laws_in_different_countries</ref>.
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	=== Attempt to destroy fungibility ===		=== Attempt to destroy fungibility ===

	Privacy invasions can lead to damaging or destroying bitcoin fungibility. The aim of bitcoin is to be a decentralized digital currency, but if all users are eventually required to consult centralized blacklists before accepting bitcoin then its decentralization will be destroyed<ref>https://bitcointalk~~[dot]~~org/index.php?topic=333882.0</ref>.		Privacy invasions can lead to damaging or destroying bitcoin [[fungibility]]. The aim of bitcoin is to be a decentralized digital currency, but if all users are eventually required to consult centralized blacklists before accepting bitcoin then its decentralization will be destroyed<ref>https://bitcointalk.org/index.php?topic=333882.0</ref>.

	Financial privacy is an essential element to fungibility in Bitcoin: if you can meaningfully distinguish one coin from another, then their fungibility is weak. If our fungibility is too weak in practice, then we cannot be decentralized: if someone important announces a list of stolen coins they won't accept coins derived from, you must carefully check coins you accept against that list and return the ones that fail. Everyone gets stuck checking blacklists issued by various authorities because in that world we'd all not like to get stuck with bad coins. This adds friction and transactional costs and makes Bitcoin less valuable as a money.		Financial privacy is an essential element to fungibility in Bitcoin: if you can meaningfully distinguish one coin from another, then their fungibility is weak. If our fungibility is too weak in practice, then we cannot be decentralized: if someone important announces a list of stolen coins they won't accept coins derived from, you must carefully check coins you accept against that list and return the ones that fail. Everyone gets stuck checking blacklists issued by various authorities because in that world we'd all not like to get stuck with bad coins. This adds friction and transactional costs and makes Bitcoin less valuable as a money.

Iminer99: /* Examples */

2020-05-30T16:39:04Z

Examples

← Older revision		Revision as of 16:39, 30 May 2020
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	* https://www.chainalysis.com/		* https://www.chainalysis.com/
	* https://www.elliptic.co/		* https://www.elliptic.co/
	* ~~http~~://~~coinvalidation~~.com/		* https://cipherblade.com/
	* https://www.neutrino.nu/		* https://www.neutrino.nu/
	* https://www.coinfirm.io		* https://www.coinfirm.io

Belcher: /* Attempt to invade privacy */ Add jlopp's list of physical bitcoin attacks

2020-04-11T22:48:06Z

Attempt to invade privacy: Add jlopp's list of physical bitcoin attacks

← Older revision		Revision as of 22:48, 11 April 2020
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	Financial privacy is an essential criteria for the efficient operation of a free market: if you run a business, you cannot effectively set prices if your suppliers and customers can see all your transactions against your will. You cannot compete effectively if your competition is tracking your sales. Individually your informational leverage is lost in your private dealings if you don't have privacy over your accounts: if you pay your landlord in Bitcoin without enough privacy in place, your landlord will see when you've received a pay raise and can hit you up for more rent.		Financial privacy is an essential criteria for the efficient operation of a free market: if you run a business, you cannot effectively set prices if your suppliers and customers can see all your transactions against your will. You cannot compete effectively if your competition is tracking your sales. Individually your informational leverage is lost in your private dealings if you don't have privacy over your accounts: if you pay your landlord in Bitcoin without enough privacy in place, your landlord will see when you've received a pay raise and can hit you up for more rent.

	Financial privacy is essential for personal safety: if thieves can see your spending, income, and holdings, they can use that information to target and exploit you. Without privacy malicious parties have more ability to steal your identity, snatch your large purchases off your doorstep, or impersonate businesses you transact with towards you... they can tell exactly how much to try to scam you for.		Financial privacy is essential for personal safety: if thieves can see your spending, income, and holdings, they can use that information to target and exploit you. Without privacy malicious parties have more ability to steal your identity, snatch your large purchases off your doorstep, or impersonate businesses you transact with towards you... they can tell exactly how much to try to scam you for. [https://github.com/jlopp/physical-bitcoin-attacks Here] is list of real life physical attacks aimed at stealing bitcoins, so these are not just hypothetical concerns.

	Financial privacy is essential for human dignity: no one wants the snotty barista at the coffee shop or their nosy neighbors commenting on their income or spending habits. No one wants their baby-crazy in-laws asking why they're buying contraception (or sex toys). Your employer has no business knowing what church you donate to. Only in a perfectly enlightened discrimination free world where no one has undue authority over anyone else could we retain our dignity and make our lawful transactions freely without self-censorship if we don't have privacy.		Financial privacy is essential for human dignity: no one wants the snotty barista at the coffee shop or their nosy neighbors commenting on their income or spending habits. No one wants their baby-crazy in-laws asking why they're buying contraception (or sex toys). Your employer has no business knowing what church you donate to. Only in a perfectly enlightened discrimination free world where no one has undue authority over anyone else could we retain our dignity and make our lawful transactions freely without self-censorship if we don't have privacy.

Belcher: /* Attempt to invade privacy */ Moved less important sentence to the bottom

2020-04-11T00:14:56Z

Attempt to invade privacy: Moved less important sentence to the bottom

← Older revision		Revision as of 00:14, 11 April 2020
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	=== Attempt to invade privacy ===		=== Attempt to invade privacy ===

	The right to privacy is recognized as a human right by the US constitution, European Union regulations and the Constitution of India<ref>https://en.wikipedia.org/wiki/Right_to_privacy#Privacy_laws_in_different_countries</ref>.

	Financial privacy is an essential criteria for the efficient operation of a free market: if you run a business, you cannot effectively set prices if your suppliers and customers can see all your transactions against your will. You cannot compete effectively if your competition is tracking your sales. Individually your informational leverage is lost in your private dealings if you don't have privacy over your accounts: if you pay your landlord in Bitcoin without enough privacy in place, your landlord will see when you've received a pay raise and can hit you up for more rent.		Financial privacy is an essential criteria for the efficient operation of a free market: if you run a business, you cannot effectively set prices if your suppliers and customers can see all your transactions against your will. You cannot compete effectively if your competition is tracking your sales. Individually your informational leverage is lost in your private dealings if you don't have privacy over your accounts: if you pay your landlord in Bitcoin without enough privacy in place, your landlord will see when you've received a pay raise and can hit you up for more rent.
Line 27:		Line 25:

	Globally visible public records in finance are completely unheard-of. They are undesirable and arguably intolerable. The Bitcoin whitepaper made a promise of how we could get around the visibility of the ledger with pseudonymous addresses, but the ecosystem has broken that promise in a bunch of places and we ought to fix it. Bitcoin could have coded your name or IP address into every transaction. It didn't. The whitepaper even has a section on privacy. Sufficient privacy is an essential prerequisite for a viable digital currency<ref>https://bitcointalk[dot]org/index.php?topic=334316.msg3588908#msg3588908</ref>.		Globally visible public records in finance are completely unheard-of. They are undesirable and arguably intolerable. The Bitcoin whitepaper made a promise of how we could get around the visibility of the ledger with pseudonymous addresses, but the ecosystem has broken that promise in a bunch of places and we ought to fix it. Bitcoin could have coded your name or IP address into every transaction. It didn't. The whitepaper even has a section on privacy. Sufficient privacy is an essential prerequisite for a viable digital currency<ref>https://bitcointalk[dot]org/index.php?topic=334316.msg3588908#msg3588908</ref>.

			The right to privacy is recognized as a human right by the US constitution, European Union regulations and the Constitution of India<ref>https://en.wikipedia.org/wiki/Right_to_privacy#Privacy_laws_in_different_countries</ref>.

	=== Attempt to destroy fungibility ===		=== Attempt to destroy fungibility ===

MMGen: a few typo fixes

2019-03-15T08:42:39Z

a few typo fixes

← Older revision		Revision as of 08:42, 15 March 2019
Line 1:		Line 1:
	A '''transaction surveillance company''' is one which attempts to spy on all bitcoin users. Their business model is usually to sell the data to any governments, ~~corperations~~ and individuals willing to pay for their services.		A '''transaction surveillance company''' is one which attempts to spy on all bitcoin users. Their business model is usually to sell the data to any governments, corporations and individuals willing to pay for their services.

	== Spying technology ==		== Spying technology ==
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	=== Incentivized to oppose bitcoin updates ===		=== Incentivized to oppose bitcoin updates ===
	During the deployment of [[segregated witness]] certain transaction surveillance companies were believed to have spread misinformation about it, because the ~~updated~~ enables [[Lightning Network]] which the companies saw as a threat to their business<ref>https://twitter.com/viaj3ro/status/860709760227725312</ref><ref>https://twitter.com/peterktodd/status/860826532650123264</ref>.		During the deployment of [[segregated witness]] certain transaction surveillance companies were believed to have spread misinformation about it, because the update enables [[Lightning Network]], which the companies saw as a threat to their business<ref>https://twitter.com/viaj3ro/status/860709760227725312</ref><ref>https://twitter.com/peterktodd/status/860826532650123264</ref>.

	=== Oversold effectiveness ===		=== Oversold effectiveness ===

Belcher: Create page

2019-02-22T13:37:08Z

Create page

New page

A '''transaction surveillance company''' is one which attempts to spy on all bitcoin users. Their business model is usually to sell the data to any governments, corperations and individuals willing to pay for their services.

== Spying technology ==

There are a number of techniques probably used by transaction surveillance companies:

* AML/KYC information. Many bitcoin exchanges require users to undergo Anti-Money Laundering and Know-Your-Customer (AML/KYC) checks, which requires users to reveal all kinds of invasive personal information such as their real name, residence, occupation, net worth and income. All this information is usually passed onto the exchange's partner transaction surveillance company, which keeps a database linking the victim's personal information with their bitcoin [[address]]es and [[transaction]]s.
* Blockchain analysis. Bitcoin on-chain [[transaction]]s are visible to all and so can be analyzed. Important techniques are the [[Common-input-ownership heuristic]] and [[address reuse]].
* Wallet synchronization analysis. Bitcoin [[lightweight node|lightweight wallets]] often download their own history and balance by querying a third-party server. Transaction surveillance companies often try to exploit this to learn which [[address]]es and [[transaction]]s belong to certain wallets. The companies have been known to collect [[BIP37 privacy problems|BIP37 filters]] from BIP37-enabled wallets. They almost-certainly also run many [[Electrum]] servers which can spy on any [[Electrum]] wallet that connects to them.
* Transaction broadcasting. Surveillance companies have been known to sybil attack the bitcoin network in order to try to find the source IP addresses of unconfirmed transactions<ref>https://www.reddit.com/r/Bitcoin/comments/2yvy6b/a_regulatory_compliance_service_is_sybil/</ref>.

See the [[Privacy]] page on this wiki for information about how to protect your privacy.

== Criticisms ==

=== Attempt to invade privacy ===

The right to privacy is recognized as a human right by the US constitution, European Union regulations and the Constitution of India<ref>https://en.wikipedia.org/wiki/Right_to_privacy#Privacy_laws_in_different_countries</ref>.

Financial privacy is an essential criteria for the efficient operation of a free market: if you run a business, you cannot effectively set prices if your suppliers and customers can see all your transactions against your will. You cannot compete effectively if your competition is tracking your sales. Individually your informational leverage is lost in your private dealings if you don't have privacy over your accounts: if you pay your landlord in Bitcoin without enough privacy in place, your landlord will see when you've received a pay raise and can hit you up for more rent.

Financial privacy is essential for personal safety: if thieves can see your spending, income, and holdings, they can use that information to target and exploit you. Without privacy malicious parties have more ability to steal your identity, snatch your large purchases off your doorstep, or impersonate businesses you transact with towards you... they can tell exactly how much to try to scam you for.

Financial privacy is essential for human dignity: no one wants the snotty barista at the coffee shop or their nosy neighbors commenting on their income or spending habits. No one wants their baby-crazy in-laws asking why they're buying contraception (or sex toys). Your employer has no business knowing what church you donate to. Only in a perfectly enlightened discrimination free world where no one has undue authority over anyone else could we retain our dignity and make our lawful transactions freely without self-censorship if we don't have privacy.

Most importantly, financial privacy isn't incompatible with things like law enforcement or transparency. You can always keep records, be ordered (or volunteer) to provide them to whomever, have judges hold against your interest when you can't produce records (as is the case today). None of this requires _globally_ visible public records.

Globally visible public records in finance are completely unheard-of. They are undesirable and arguably intolerable. The Bitcoin whitepaper made a promise of how we could get around the visibility of the ledger with pseudonymous addresses, but the ecosystem has broken that promise in a bunch of places and we ought to fix it. Bitcoin could have coded your name or IP address into every transaction. It didn't. The whitepaper even has a section on privacy. Sufficient privacy is an essential prerequisite for a viable digital currency<ref>https://bitcointalk[dot]org/index.php?topic=334316.msg3588908#msg3588908</ref>.

=== Attempt to destroy fungibility ===

Privacy invasions can lead to damaging or destroying bitcoin fungibility. The aim of bitcoin is to be a decentralized digital currency, but if all users are eventually required to consult centralized blacklists before accepting bitcoin then its decentralization will be destroyed<ref>https://bitcointalk[dot]org/index.php?topic=333882.0</ref>.

Financial privacy is an essential element to fungibility in Bitcoin: if you can meaningfully distinguish one coin from another, then their fungibility is weak. If our fungibility is too weak in practice, then we cannot be decentralized: if someone important announces a list of stolen coins they won't accept coins derived from, you must carefully check coins you accept against that list and return the ones that fail. Everyone gets stuck checking blacklists issued by various authorities because in that world we'd all not like to get stuck with bad coins. This adds friction and transactional costs and makes Bitcoin less valuable as a money.

=== No mechanism for oversight or appeal ===
There appears to be no recourse for someone affected by false positive identification of exchange-disapproved transaction history. This could result in them wrongly having their coins confiscated.

=== Jurisidiction ===
Transaction surveillance company market themselves as a tool for finding "bad guys", but its unclear which jurisidiction that applies to. For example, could one day the government of China pressure those companies into marking certain coins as "bad" because they belong to users who disagree with Chinese government policy?

=== Incentivized to oppose bitcoin updates ===
During the deployment of [[segregated witness]] certain transaction surveillance companies were believed to have spread misinformation about it, because the updated enables [[Lightning Network]] which the companies saw as a threat to their business<ref>https://twitter.com/viaj3ro/status/860709760227725312</ref><ref>https://twitter.com/peterktodd/status/860826532650123264</ref>.

=== Oversold effectiveness ===

Transaction surveillance companies rely on heuristics or assumptions when analyzing the blockchain. These heuristics are sometimes not true, for example the [[common-input-ownership heuristic]] is broken by [[CoinJoin]]. Even if that heuristic is true, it still requires actually identifying the cluster, which is not always possible.

Laws surrounding anti-money-laundering typically require businesses to take reasonable efforts to investigate the source of funds. Usually the transaction surveillance company's customers simply want to legally protect themselves, regardless of whether the surveillance actually works. There is a lot of money in this space from governments and other authorities, who usually don't understand the underlying technology and are happy to throw money at several startups who claim to be able to accurately track everything. Whether the activities of transaction surveillance company actually help against money laundering is an open question.

== Examples ==

* https://www.walletexplorer.com/ - Free website which mostly uses the [[Common-input-ownership heuristic]] and [[address reuse]] for clustering.
* https://www.chainalysis.com/
* https://www.elliptic.co/
* http://coinvalidation.com/
* https://www.neutrino.nu/
* https://www.coinfirm.io
* https://blockchaingroup.io/
* https://ciphertrace.com/
* https://complyadvantage.com/aml-crypto-compliance/

==References==
<references />

[[Category:Privacy]]