Sjors Provoost

North Korea’s “Cryptocurrency-1”

Cryptocurrency developer Virgil F. was arrested a few days ago at Los Angeles International Airport. Arresting travelers at the airport right before they leave appears to be a thing for the FBI, e.g. a OneCoin founder was arrested at the same airport on his way out, and Malware Tech was arrested at Vegas airport after a conference. Is it the free coffee for law enforcement?

He traveled to North Korea, gave a talk there entitled “Blockchain and Peace” and then allegedly tried to organize a symbolic 1 ETH payment to South Korea ($216 at the time). Here’s the full inditement: https://www.justice.gov/usao-sdny/press-release/file/1222646/download

There’s serious concern that although the case may have some merit, the real goal of the FBI is set a dangerous precedent about a specific aspect of this case: providing education about publicly available information.

(update: Peter Todd points out his description “doesn’t appear to be completely correct. The FBI did mysteriously cut off one of their options to getting the data off the phone. But it seems that was in changing the iCloud password, disabling unencrypted backups, not the pin.”)

So it’s important to critically analyse this case. This means keeping an eye out on new information being released, as the inditment only contains information needed to show Probable Cause:

In my opinion there are four distinct accusations, but since they’re all covered by the same broad law, the inditement makes no effort to keep them cleanly separated:

1. Traveling to North Korea after being explicitly denied permission
2. Providing any kind of service to North Korea without permission (banned by Trumps executive order 13722)
3. Giving a presentation about “blockchain technology”, emphasising its hypothetical usefulness for sanctions evasion, based solely on publicly known information
4. Organizing a symbolic transfer as a proof-of-concept for said evasion

I find (3) and (4) particularly problematic.

Giving a presentation

Regarding (3) one should ask the following question: what if he had given the same presentation on US soil, recorded it on Youtube and tweeted it out with “Hey Kim, check this out, you’ll find this useful when @realDonalTrump racks up sanctions again”? Would this be covered by the First Amendment? If so, does it really matter that he gave the speech while physically in North Korea?

The inditement seems to admit that only publicly available knowledge was shared. If they actually had a case for sharing non-public information I assume they would have made it here:

An example of such non-publicly available information would be if he audited a US based exchange and then divulged technical details that North Korea could use, e.g. to create fake accounts and bypass KYC controls. That’s not at all what he’s being accused of here.

Symbolic transfers

Regarding both (3) and (4), the inditement goes to great lengths to accuse him of actually assisting in transferring funds out of North Korea:

This if anything shows that he hadn’t prepared a presentation with the topic of sanction evasion in mind, but was just spurred in the heat of the moment to mention that.

One could also argue that refusing a “suggestion” from a North Korean government official while in North Korea is unwise. Of course he could have dropped the idea later, rather than organise a demo:

For some reason the name of the cryptocurrency is redacted and replaced with “Cryptocurrency-1”. Is this then finally The Flippening? Or is this how the FBI wants avoid mentioning that this isn’t Bitcoin ($17.000 at its peak, which is probably what judge and jury will remember), but Ethereum ($216 at the time).

I find it a complete stretch to call such a demo, that they could have found on Youtube, a serious effort to evade sanctions. It takes a lot more to really move money. I won’t go into details, partly because I actually don’t know, partly because I don’t want my name on the next inditement. The FBI knows better than to drink the crypto-trivially-beats-government kool-aid.

Morality

There is of course also the moral question of whether one should go to North Korea (or China for that matter) to educate the government on this technology:

But his actions seemed more naive than malicious. It was also around the same time when the guy who signed the executive order was going on photo shoots and openly praising Kim:

Cargo Cult veldexperiment

NRC schreef onlangs in hun redactioneel commentaar:

Interessanter is de benadering die de Nederlandse denktank Sustainable Finance Lab (SFL) deze maand suggereerde. Nederland is volgens het SFL bij uitstek een geschikt land om te experimenteren met een door de centrale bank gecontroleerde digitale munt, omdat het gebruik van cash in ons land sneller terugloopt dan in veel andere landen. De Nederlandsche Bank zou volgens de denktank bijvoorbeeld een „gecontroleerd veldexperiment” kunnen opstarten.

Dit soort artikelen doen mij altijd denken aan een Cargo Cult.

Privacy, proportionaliteit en subsidiariteit

Onderstaande is een fragment uit de brief die ik in januari 2019 gestuurd heb naar Minister Hoekstra (Financiën) via de internet consultatie Implementatiewet Wijziging Vierde Anti-Witwasrichtlijn. De gehele brief is hier te lezen. De voorgestelde wet is nog steeds in behandeling.

Uit recente voorstellen zoals het delen van identiteitsgegevens van cryptocurrency gebruikers onder exchanges (FATF), en het verbod op contante betalingen boven de €3.000, vermoed ik helaas dat hij de brief niet gelezen heeft.

Update 2 juli 2019, 17:40: er kwam zojuist een nieuwe versie van voorstel uit, alsmede advies van de Raad van State en de AVG. Onderstaande tekst gaat over de versie uit december.

Van wie is deze bitcoin? — Deel II

Ik hou rechtspraak.nl in de gaten op uitspraken die iets met Bitcoin te maken hebben. De site publiceert slechts een selectie van alle zaken, waar ik in september 2018 al eens over schreef in het artikel Van wie is deze bitcoin?

Een van de dingen die me opvalt is het gebruik van cluster- en taint-analyse. Cluster analyse heeft als doel groepen adressen aan te wijzen die bij elkaar lijken te horen, bijvoorbeeld omdat het om één Bitcoin wallet gaat. Hoe dit werkt illustreerde ik eerder aan de hand van een fictief voorbeeld in A Crime on Testnet. Taint analyse kijkt op de blockchain naar de herkomst van coins en is te vergelijken met het ruiken aan contant geld om te zien of het ooit in een coffeeshop is geweest.

On a warm summer day I crave a frappuccino. Unfortunately drugs such as caffeine, sugar and cacao were declared illegal decades ago. This happened because young unemployed college graduates often felt triggered by loud caffeinated rich people. Sugar was causing mass obesity and was also a carcinogen. Cacao was too clearly associated with oppression. These days hardly anyone remembers the reasons, they’re just shown pictures of cocaine addicts and are told cacao is a gateway drug to that.

Fortunately I know a guy, and he charges 0.002,000, — bitcoin. I spin up my Bitcoin Core wallet, because I like the retro look. It doesn’t even use comma’s after the decimal separator, something we all got used to during the hyper-deflation era. Some people would just say 2,000 Bitcoin, but don’t say that anywhere near a Core church!

Van wie is deze bitcoin?

This post is in Dutch. The short English version is in this Twitter thread:

You may want to turn off transaction email notifications, and ask your favorite wallet provider to use PGP.

In general email notications are a big privacy / security risk; they form a detailed record of stuff that's password protected for a reason.
https://t.co/nxErLpyXMG pic.twitter.com/StwIOEXNrS

— Sjors Provoost (@provoost) September 3, 2018

Ik hou rechtspraak.nl in de gaten op uitspraken die iets met Bitcoin te maken hebben. De site publiceert slechts een selectie van alle zaken, maar er zitten juweeltjes tussen. Zo was er een systeembeheerder die, volgens de rechter onterecht, ontslagen werd omdat hij een Bitcoin mijn op kantoor gebouwd had. De meeste zaken gaan echter over witwassen.

You may also want to use Tor for outbound connections:

proxy=127.0.0.1:9050

This disables listening, so you have turn that back on again:
listenonion=1
bind=127.0.0.1:8333

I agree with Scientastic’s privacy concern regarding bitnodes.com, but you can delete ~/.bitcoin/onion_private_key and restart bitcoind. A safer approach would be to start a node on another machine and try to add it as a peer, or just wait until inbound connects show up.

Bitcoin on an Orange Pi (using Armbian)

There are some good articles on how to run a Bitcoin Core full node on a Raspberry Pi. But there are other pies, some of which have better performance. That’s great news, because the Bitcoin blockchain has grown a lot recently, so any extra CPUs, RAM and storage are most welcome.

Orange Pi Plus 2E running Bitcoin Core, connected over wifi, USB keyboard and mouse, monitor.