Subject: Re: [Bitcoin-development] Criminal complaints against "network disruption as a service" startups

From: odinn <[email-masked]>
Date: Mon, 23 Mar 2015 05:50:32 +0000

Back to what is Chainalysis and country of their origin, so criminal
complaints against them would likely relate to violation of Swiss
laws, as is described here:
https://bitcointalk.org/index.php?topic=978088.msg10774882#msg10774882

It is fairly obvious that Chainalysis is not merely doing what
blockchain.info etc. is. Let's not delude ourselves here.

As stated, it would be advisable for such a firm to cease operations,
and it would seem that plenty of polite shots over the bow have been
given to Chainalysis, which should now fold up its operation, pack its
bags, and go back to its hole before trying to serve its masters again
in another way. Etc.

Corporations similar to Chainalysis which are domiciled in other
countries which conduct collection of information in ways that violate
countries' laws (there are many countries and each have their own ways
of interpreting user privacy and what constitutes permissible breach
and in what circumstances) can indeed be held to legal standards that
may result in minimal or severe legal penalties.  It is true that
analyzing information that is publicly available, such as that which
is in a library, is not illegal. But the act of surveillance is.
(Then there is the question of what sort of surveillance, targeted or
general, and whether it is limited to the bitcoin network or if it
moves beyond that to attempts to correlate with usernames, IDs, IPs,
and other information available on fora and apparent from services,
but I won't get into that here.)  Even if you argue that the manner in
which you are performing your actions is not actually "surveillance,"
or you argue that it is "legally permissible," someone else will
certainly come along and make a reasonable argument that you are
indeed engaging in illegal surveillance.  They may even suggest to a
judge that you are in the process of constructing a botnet and demand
that your domains be seized, and may successfully obtain an ex parte
temporary restraining order (TRO) against Chainalysis and similar
corporations to have domain(s) seized.  Any and all arguments may be
added in here, there are 196 countries in the world today - each with
their own unique laws - (maybe less by the time you read this) and a
shit-ton of possible legal arguments that can be made by creative
minds that might want to sue you if you have been surveilling people,
each different depending on where your surveillance corporation is
domiciled.  There are plenty of legal processes available for people
to do exactly that.  You are indeed subject to having that happen to
you if you continue to surveill the network even if you are doing so
on behalf of the state for the purpose of gathering information for a
state's compliance initiative.

So, don't delude yourself, and be happy if all that happens is your
little surveillance initiative has to close its doors (or gets sued if
it stays open).  Because that is the legal side of things.  The
extralegal stuff is far worse.  The community is helping you by asking
you gently to close up shop and go away. It is a helpful suggestion
and I believe also a fair warning, again, a shot off the bow.

On the development side, developers are certainly responsible for
doing what they can to resist this kind of surveillance activity.  But
I have a feeling that will be a different thread which is more
technical and so won't comment on it here, except to say it will
likely involve working toward giving the user an anonymity option
which can be exercised as part of any transaction.

Thy Shizzle:
> I don't believe that at all. Analyzing information publicly
> available is not illegal. Chainalysis or whatever you call it would
> be likened to observing who comes and feeds birds at the park
> everyday. You can sit in the park and observe who feeds the birds,
> just as you can connect to the Bitcoin P2P network and observe the
> blocks being formed into the chain and transactions etc. Unless
> there is some agreement taking place where it is specified that
> upon connecting to the Bitcoin P2P swarm you agree to a set of
> terms, however as every node is providing their own "entry" into
> the P2P swarm it becomes really up to the node providing the
> connection to uphold and enforce the terms of the agreement. If you
> allow people to connect to you without terms of agreement, you
> cannot cry foul when they record the data that passes through. To
> say Chainalysis needs to cease is silly, the whole point of the
> public blockchain is for Chainalysis, whether it be for the
> verification of transactions, research or otherwise.
> 
> -----Original Message----- From: "odinn"
> <[email-masked]> Sent: ‎23/‎03/‎2015 1:48 PM To:
> "[email-masked]"
> <[email-masked]> Subject: Re:
> [Bitcoin-development] Criminal complaints against "network
> disruption as a service" startups
> 
> If you (e.g. Chainalysis) or anyone else are doing surveillance on
> the network and gathering information for later use, and whether or
> not the ultimate purpose is to divulge it to other parties for
> compliance purposes, you can bet that ultimately the tables will be
> turned on you, and you will be the one having your ass handed to
> you so to speak, before or after you are served, in legal parlance.
> Whether or not the outcome of that is meaningful and beneficial to
> any concerned parties and what is the upshot of it in the end
> depends on on what you do and just how far you decide to take your
> ill-advised enterprise.
> 
> Chainalysis and similar operations would be, IMHO, well advised to 
> cease operations.  This doesn't mean they will, but guess what:
> 
> Shot over the bow, folks.
> 
> Jan Møller:
>> What we were trying to achieve was determining the flow of funds 
>> between countries by figuring out which country a transaction 
>> originates from. To do that with a certain accuracy you need
>> many nodes. We chose a class C IP range as we knew that bitcoin
>> core and others only connect to one node in any class C IP range.
>> We were not aware that breadwallet didn't follow this practice.
>> Breadwallet risked getting tar-pitted, but that was not our
>> intention and we are sorry about that.
> 
>> Our nodes DID respond with valid blocks and merkle-blocks and 
>> allowed everyone connecting to track the blockchain. We did
>> however not relay transactions. The 'service' bit in the version
>> message is not meant for telling whether or how the node relays
>> transactions, it tells whether you can ask for block headers only
>> or full blocks.
> 
>> Many implementations enforce non standard rules for handling 
>> transactions; some nodes ignore transactions with address reuse, 
>> some nodes happily forward double spends, and some nodes forward 
>> neither blocks not transactions. We did blocks but not 
>> transactions.
> 
>> In hindsight we should have done two things: 1. relay
>> transactions 2. advertise address from 'foreign' nodes
> 
>> Both would have fixed the problems that breadwallet experienced. 
>> My understanding is that breadwallet now has the same 'class C' 
>> rule as bitcoind, which would also fix it.
> 
>> Getting back on the topic of this thread and whether it is
>> illegal, your guess is as good as mine. I don't think it is
>> illegal to log incoming connections and make statistical analysis
>> on it. That would more or less incriminate anyone who runs a
>> web-server and looks into the access log. At lease one Bitcoin
>> service has been collecting IP addresses for years and given them
>> to anyone visiting their web-site (you know who) and I believe
>> that this practise is very wrong. We have no intention of giving
>> IP addresses away to anyone, but we believe that you are free to
>> make statistics on connection logs when nodes connect to you.
> 
>> On a side note: When you make many connections to the network
>> you see lots of strange nodes and suspicious patterns. You can
>> be certain that we were not the only ones connected to many
>> nodes.
> 
>> My takeaway from this: If nodes that do not relay transactions is
>> a problem then there is stuff to fix.
> 
>> /Jan
> 
>> On Fri, Mar 13, 2015 at 10:48 PM, Mike Hearn <[email-masked]> 
>> wrote:
> 
>>> That would be rather new and tricky legal territory.
>>> 
>>> But even putting the legal issues to one side, there are 
>>> definitional issues.
>>> 
>>> For instance if the Chainalysis nodes started following the 
>>> protocol specs better and became just regular nodes that
>>> happen to keep logs, would that still be a violation? If so,
>>> what about blockchain.info? It'd be shooting ourselves in the
>>> foot to try and forbid block explorers given how useful they
>>> are.
>>> 
>>> If someone non-maliciously runs some nodes with debug logging 
>>> turned on, and makes full system backups every night, and
>>> keeps those backups for years, are they in violation of
>>> whatever pseudo-law is involved?
>>> 
>>> I think it's a bit early to think about these things right
>>> now. Michael Grønager and Jan Møller have been Bitcoin hackers
>>> for a long time. I'd be interested to know their thoughts on
>>> all of this.
>>> 
>>> 
>>> ------------------------------------------------------------------------------
>>>
>>>
>
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>
>>> 
> 
> 
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>
>> 
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