Quote from: HairyMaclairy on March 24, 2018, 11:10:07 AM

Hmmm

OFAC to blacklist Bitcoin addresses.

https://www.coindesk.com/goodbye-fungibility-ofacs-bitcoin-blacklist-remake-crypto/

What if owners of blacklisted addresses spray satoshis at every address in the blockchain and taint the whole thing? What if they do it quickly before any new rules are in place?

Most people haven't got the technical skills to move the clean bitcoins to a new address, and leave the dirty satoshis in the old address. They will just spend the dirty satoshis mixed to together with the clean ones.

https://www.coindesk.com/goodbye-fungibility-ofacs-bitcoin-blacklist-remake-crypto/

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Joe Ciccolo is the president of BitAML, Inc., a compliance service provider. Andrew Hinkes is an adjunct professor at the NYU Stern School of Business and NYU School of Law.

This article is not intended to provide, and should not be taken as, legal advice.

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Could this backfire? What's the doomsday scenario?

Sure. Operators of listed digital currency addresses could spray satoshis at any address they can find and essentially "taint" the entire blockchain.

After listing addresses and implementing appropriate tracking software, OFAC may find that all addresses are two or three transactions away from a listed address, and the tool becomes essentially worthless.