6

If an exchange is given a court order generated by an uneducated prosecutor to blacklist deposits from a Monero certain address, what is the simplest way to inform the prosecutor of the impossibility of that request?

9

The recipient of a transaction does not know the address the money came from. Monero addresses aren't on the blockchain at all.

In Monero, every single output is on its own one time address. Only someone with the view secret key of the matching Monero standard address can tell whether a given output corresponds to that address. So the recipient of the transaction, having just their own view secret key, can only tell the incoming outputs are for that address (good!), but cannot tell where they are from.

A good way to visually understand this is to imagine a large open ground, with lots of RC vehicles in there, and a number of people at the side, each controlling a number of those. The people on the side have their standard address and keys (the remote controls), and the state of the vehicles on the open ground is the blockchain.

Now, an observer can't tell which vehicle is controlled by whom. Everyone's playing with their remote controls, vehicles drive around, but no way to tell who controls what.

Now, a vehicle sports a slogan a prosecutor deems Very Bad(tm). The prosecutor wants to know who controlled that vehicle. No way to know without extraneous evidence (eg, CCTV evidence showing the person handling the vehicle, etc).

Now, every single person will know which cars are theirs, and they're able to leave them stopped, or move them around. But an observer doesn't know.

You can then give one of your remote control to another person. That person now controls your car, and you can't anymore. Someone watching the open ground can't tell what happened. The car can still move around, but the controller is different.

Note that this addresses your question about "funds coming from a certain monero address". There are other arguments that can be made for other requests such as "funds moving this particular output on the blockchain", if you were to ask that question :)

4

Eli5: on the blockchain, all transactions are encrypted in a way that only the holder of the view key can know if he received something. Also, only the holder of the spend key can spend what he received, but also only he (and the recipient) can know if he spent it and where it went. So, for an outsider, he can't blacklist anything because he wouldn't know what to blacklist.

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