Tracing Bitcoin ownership?

Out of curiosity, how would you check to see if someone owned Bitcoin?  I'm thinking of this from the perspective of a trustee in bankruptcy.  You can check a register for property, you can check a register for vehicles, but what is the Bitcoin equivalent?

I don't know but I doubt there is anything. 

How do you get the money in there though? 

If you transfer money from your bank account to your bitcoin wallet they will likely look into what that transaction is. 

It depends on how actively the owner trades on US based exchanges. If you actively trade, you'll be sent a 1099-K form that the IRS will be aware of. Coinbase reports to the IRS, as well. Beyond that, the owner of bitcoin is the one who has the key to a particular wallet. 

If you were an early adopter, and kept off exchanges, then it's between you, God, Santa Claus and anyone you bothered to tell.

I don’t know how to do it, but Bitcoin can be traced. Buy Monero. It’s a privacy cryptocurrency that is so private even the NSA can’t track it.

nrallen - 

Out of curiosity, how would you check to see if someone owned Bitcoin?  I'm thinking of this from the perspective of a trustee in bankruptcy.  You can check a register for property, you can check a register for vehicles, but what is the Bitcoin equivalent?

If you own the private key to a bitcoin address, you(and only you) can create a digital signature for it proving your ownership.

It almost sounds like the ultimate method of money laundering and concealing assets/money.

I am dealing with a couple of bankruptcies recently with individuals who are sophisticated, had a lot of money pass through their hands, and are no doubt aware of Bitcoin.  As above, I suppose the starting point is bank account transactions if they were stupid enough to make the deposit themselves.  Thereafter, potentially gaining control of email accounts and looking for relevant emails perhaps.

Suppose the only other method is if the bankrupt does a 50 Cent and announces to the world that they have a bunch of Bitcoins!

How would theh prove you owned a buried stash of gold?

IronHands - 

It depends on how actively the owner trades on US based exchanges. If you actively trade, you'll be sent a 1099-K form that the IRS will be aware of. Coinbase reports to the IRS, as well. Beyond that, the owner of bitcoin is the one who has the key to a particular wallet. 

If you were an early adopter, and kept off exchanges, then it's between you, God, Santa Claus and anyone you bothered to tell.

I know almost nothing about crypto, so maybe this is a dumb question:

But what if you used a VPS to hide your location and instead used a trading platform like (I think?) BitMex that’s located in another country / not open to US residents?

nrallen -

It almost sounds like the ultimate method of money laundering and concealing assets/money.

I am dealing with a couple of bankruptcies recently with individuals who are sophisticated, had a lot of money pass through their hands, and are no doubt aware of Bitcoin.  As above, I suppose the starting point is bank account transactions if they were stupid enough to make the deposit themselves.  Thereafter, potentially gaining control of email accounts and looking for relevant emails perhaps.

Suppose the only other method is if the bankrupt does a 50 Cent and announces to the world that they have a bunch of Bitcoins!

Swiss bank account in your pocket.

I've been investigated by tax authorities & had to give my transaciton details who passed them onto chain analytic companies. I'm legit though so had nothing to hide but they wanted to check anyway.

If they know what they are doing then you are likely never going to get a clear picture of what they have unless you spend money on chain analytics after uncovering transactions linked to them. That would require knowledge that they have bought bitcoin in the first place. You would then have to convince the exchange to pass over details who will deny you unless law enforcement forces them. If they first bought their Bitcoin via person to person exchange & have used all non-kyc exchanges to trade then I imagine without serious man power you won’t be finding anything.

Wiggy -
IronHands - 

It depends on how actively the owner trades on US based exchanges. If you actively trade, you'll be sent a 1099-K form that the IRS will be aware of. Coinbase reports to the IRS, as well. Beyond that, the owner of bitcoin is the one who has the key to a particular wallet. 

If you were an early adopter, and kept off exchanges, then it's between you, God, Santa Claus and anyone you bothered to tell.

I know almost nothing about crypto, so maybe this is a dumb question:

But what if you used a VPS to hide your location and instead used a trading platform like (I think?) BitMex that’s located in another country / not open to US residents?

There are plenty of non-kyc exchanges with serious volume you can trade on through VPN’s. It is against their terms & services but often nothing stopping you. The issue is if you wanted to get money back out into fiat via a bank account you have to register. So you can trade from $ to any crypto fine, but withdrawals can only be in crypto.

So if you wanted to get back into fiat in the US most people would use something like Coinbase, but then there would be a record for the authorities to follow.  The only option would be through cash sales in person if you wanted to avoid it. Anyone trading with size would need connections to unload large amounts at a likely discount to spot.

Juxtaposition - 
Wiggy -
IronHands - 

It depends on how actively the owner trades on US based exchanges. If you actively trade, you'll be sent a 1099-K form that the IRS will be aware of. Coinbase reports to the IRS, as well. Beyond that, the owner of bitcoin is the one who has the key to a particular wallet. 

If you were an early adopter, and kept off exchanges, then it's between you, God, Santa Claus and anyone you bothered to tell.

I know almost nothing about crypto, so maybe this is a dumb question:

But what if you used a VPS to hide your location and instead used a trading platform like (I think?) BitMex that’s located in another country / not open to US residents?

There are plenty of non-kyc exchanges with serious volume you can trade on through VPN’s. It is against their terms & services but often nothing stopping you. The issue is if you wanted to get money back out into fiat via a bank account you have to register. So you can trade from $ to any crypto fine, but withdrawals can only be in crypto.

So if you wanted to get back into fiat in the US most people would use something like Coinbase, but then there would be a record for the authorities to follow.  The only option would be through cash sales in person if you wanted to avoid it. Anyone trading with size would need connections to unload large amounts at a likely discount to spot.

Gotcha - that makese sense.

Thanks.

Wiggy -
IronHands - 

It depends on how actively the owner trades on US based exchanges. If you actively trade, you'll be sent a 1099-K form that the IRS will be aware of. Coinbase reports to the IRS, as well. Beyond that, the owner of bitcoin is the one who has the key to a particular wallet. 

If you were an early adopter, and kept off exchanges, then it's between you, God, Santa Claus and anyone you bothered to tell.

I know almost nothing about crypto, so maybe this is a dumb question:

But what if you used a VPS to hide your location and instead used a trading platform like (I think?) BitMex that’s located in another country / not open to US residents?

There’s too much verification these days. Most exchanges want you to verify your identity. Coinbase makes it easy to turn your US currency into crypto, but you arent doing it without them knowing who you really are.

Of course, if you bought into this back in the good old days of wire transfers, bartering, direct cash or paypal from miners, you have a leg up. The challenge is turning your holdings into liquid cash funds without pinging on some regulatory radar.

IronHands -

It depends on how actively the owner trades on US based exchanges. If you actively trade, you'll be sent a 1099-K form that the IRS will be aware of. Coinbase reports to the IRS, as well. Beyond that, the owner of bitcoin is the one who has the key to a particular wallet. 

If you were an early adopter, and kept off exchanges, then it's between you, God, Santa Claus and anyone you bothered to tell.

To add to this, there is often a trail because of what you do with your account. It’s possible to have anonymity, but you’d have to be careful. That said, confidently knowing exactly how much bitcoin someone owns without them telling you would be nearly impossible. You’d only know the transactions you can trace to them. 

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