Curriculum·Junior·J311
Privacy, Surveillance, and Compliance Exposure
The Tornado Cash dusting, August to September 2022. OFAC sanctioned Tornado Cash on 8 August 2022, and the same day Circle blacklisted the sanctioned addresses, freezing the USDC they held, per CryptoSlate.
Lesson 1 opens on
The Bitfinex laundering, 2016 to 2022
In August 2016 Ilya Lichtenstein breached Bitfinex and initiated more than 2,000 unauthorized transactions moving 119,754 BTC, worth roughly $71M at the time, to a wallet he controlled. Over the following years he and Heather Morgan laundered the proceeds through fictitious identities, computer programs that automated transactions so that many could take place in a short time, deposits into accounts at darknet markets including AlphaBay, mixing services including Bitcoin Fog and Wasabi, chain hopping, conversion into Monero, gold coins that Morgan buried and that law enforcement later dug up at a premises in California, and US business accounts used to make the banking activity look legitimate.6B at the time, which the Deputy Attorney General called the department's largest financial seizure ever.
The lessons
- J311-01You are being watched, and so is everyoneDistinguish pseudonymity from anonymity, and name the event that converts one into the otherabout 34 min · opens on The Bitfinex laundering, 2016 to 2022
- J311-02Your own privacy surfaceEnumerate the four surfaces on which your activity becomes attached to your identityabout 34 min · opens on The Celsius bankruptcy filing, 5 October 2022
- J311-03Privacy tooling and its legal realitySeparate the four categories of privacy tooling by what each actually concealsabout 35 min · opens on Tornado Cash and its legal status, 2022 to 2025
- J311-04Compliance exposure as a userName the four layers at which a compliance action can reach you, and who acts at eachabout 34 min · opens on Tether blacklisting through 2025
- J311-05Defensive hygieneExplain why a public ledger enables targeting in real time rather than only retrospectivelyabout 35 min · opens on The WBTC address poisoning, 3 May 2024