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In torrc, you can select exit nodes by country code (https://www.torproject.org/docs/faq.html.en#ChooseEntryExit) - how reliable is that selection? Could a malicious (or simply poorly-configured) exit node lie about where it was exiting traffic to? Other than manual checking per "identity," is there any automated way that this is monitored for inconsistencies?

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The geographical information comes from a so-called geoip file. This file has a mapping from IP address to country. This file (or database) is provided by Maxmind, a company that deals with such information. The Tor Project cleans up and converts this file and ships it with every Tor client.

This company can forge its data to give you a wrong impression. However this would also affect other users. So I think this is quite unlikely. Furthermore the Tor developers could modify the data to cheat on you. But why should they do it? If I remember correctly they have a look at changes of that file and try to detect wrong data.

If someone wants to lie about location data, I think the easiest thing is to rent a server in that specific country and run an exit node on it.

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The geoip data is pretty good, but it is far from perfect.

If Maxmind says an IP is in a given country, it is not at all guaranteed that it is actually in that country.

Also, yes, even if Maxmind is correct about the location of the relays your tor daemon is connecting to, the exit can easily tunnel your traffic to a different country and your tor daemon would not notice.

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