[Shinkei]

Bitcoin is only pseudoanonymous. At some point, the 'bad actor' has to access 'legitimate' banking institutions to exchange the Bitcoins to fiat and that is the weakest link. It requires reporting to relevant tax or other authorities based on arbitrary (and secret) amounts, but targets money laundering, drug trade, gamlbing, etc.

I suppose if I had to throw a potentially disruptive idea out there, you could create a database of 'blacklisted addresses.' Let's say when Bitlocker came out, you entered that address into a database and it was verified as being associated with this scam, well it is trivial to track those coins between addresses and every address it enters is blacklisted until it enters a mixer or exchange, at which point you have a potentially complicit corporation that you could actually target with the subpoena or other legal action for discovery of IPs, login, etc.

[dsl]

People have suggested this before. A bad actor then just takes 100 illicit bitcoins and sprinkles them in random amounts across many addresses, 11 to himself at another address, 6 to a non-profit, and 14 to you. You are now indistinguishable from the bad guy.

[Shinkei]

I can't say I would complain if thousands of dollars was given to my address, but you are right... it would represent a difficult problem for enforcement and creative people would come up with clever workarounds.

[mantraxC]

> "At some point, the 'bad actor' has to access 'legitimate' banking institutions to exchange the Bitcoins to fiat and that is the weakest link."

And on the contrary they can do the exchange in, say, Nigeria. So Bitcoin's weakest link is also the law enforcement weakest link, because no one has authority over the entire world, and there are plenty of spots where you can do the exchange without trace.