- confiscate my bitcoin, or even find out how much I have
Bitcoin's public ledger is especially vulnerable to FBI "follow the money" investigation. Only one end is required to be known, and the entire trail is easily followed.
The federal agent who stole a portion of Dread Pirate Roberts' Bitcoin was quickly tracked and prosecuted.
Properly implemented "Laundering" services for crypto currency can make follow-the-money effectively useless.
The funds are transferred to a wallet, they are mixed with many other coins, and then they are paid out in different sized transactions to the recipient.
Assuming you have a busy enough pool, it should be technically untraceable.
These services does not require manipulating real money.
To run the service, it requires a device connected to the internet, that all.
You can find a lot of way to host it in a country that don't have these requirements, or to host it anonymously.
Until you want to make it into useful things and then the IRS will be asking how you bought that car and where the money came from. If it came from a laundering pool of bitcoins, tough luck convincing anyone you didn't do money laundering.
Exchanging Bitcoin for Monero or Zcash, making a private transaction, then selling it back for Bitcoin under a separate account would seemingly stop this dead in its tracks.
Yes, I didn't mean to imply otherwise. Bitcoin is obviously traceable by design, but I've seen claims this traceability is unbreakable, even by mixers or roundtrips to other currencies, which just sounds like FUD and nonsense to me.
Bitcoin's public ledger is especially vulnerable to FBI "follow the money" investigation. Only one end is required to be known, and the entire trail is easily followed.
The federal agent who stole a portion of Dread Pirate Roberts' Bitcoin was quickly tracked and prosecuted.