Bitcoin mixing is NOT money laundering, per se

Abiky

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Quote from: elevates on December 12, 2023, 08:42:49 AM

Currently, after the Sinbad issue, Bitcoin is being considered a laundering coin. The government would try its best to make it look like Bitcoin was the reason NK getting funds for their successful test of a missile. What I feel bad about is blaming Bitcoin and other crypto, what I think is the government lacked abilities to track the NK.

The original culprit was always China and its CCP regime but, the US ignored it as usual. They were doing it before Bitcoin even came into existence, for now, they found a way to blame everything on Bitcoin without even noticing the past. As for my understanding, it is nothing by hypocrisy and it would stay on as we progress to 2024.

You got that right. The US government treats crypto as it were mainly used by criminals, when it's all of the contrary. Fiat currencies (particularly the US Dollar) are the ones used mostly for money laundering and tax evasion. The main reason why the US and other countries are targeting mixers is because they don't want people to obtain true financial privacy and freedom. They want to have a full scope of what you do with your money.

With privacy, governments have no control over what you do with your financial life. This will be a never-ending battle between privacy/crypto advocates and mainstream governments. What matters is that crypto stays decentralized so it could render governments' efforts worthless. With non-custodial mixers in the game, I doubt privacy will cease to exist in the future.

franky1

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Quote from: Dump3er on December 12, 2023, 02:13:05 PM

I agree with you and this is why the bans are worthless the same way it was worthless for China to ban BTC back in the early days (and the several times they did afterwards Cheesy

).

But they still have some potential tweaks up their sleeves in terms of laws and regulations. I think the most powerful they could implement and harshly enforce is the proof of origin of funds.

the reason governments prohibit/ban/make something illegal. is because things before the bans were not illegal nor prohibited.. but by putting in bans. they can later come back with rules to permit accepted use under some licence, which comes with conditions. and thats how they gain jurisdiction
in short a permit/licence is: "its banned unless you follow our rules, meet our conditions"

we seen it happen literally overnight (in minutes) when the NY bitlicence activated.. before the date businesses could open bitcoin services in NY
now if your in NY and you want to operate a bitcoin business. its banned to you unless you register for their licence and conform to their conditions

same happens in many countries.. and china is just taking a very long time between the ban->licence to write out regulations to later permit bitcoin use

they done it with alcohol, driving, opening certain business over the centuries

Dump3er

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Quote from: Abiky on December 11, 2023, 03:16:38 PM

Quote from: Dump3er on December 10, 2023, 06:52:35 PM

It also doesn't really solve any problem if they ban mixers. There are so many services that essentially allow users to break traceability by going back and forth between different cryptocurrencies, or of course use Monero. And for as long as there is a need and a marktet for mixing services, there will be mixing services. They can maybe shut down one of those services every few weeks or so, but that doesn't stop anyone from setting up the next one. I was wondering if authorities should run their own mixing services as that would be an effective way to gather as much data about people as possible.

Mixers cannot be banned. Especially non-custodial/decentralized ones. Those who care about privacy will move on with their lives by using another mixer that's truly censorship-resistant. We knew from day one that centralized mixers were going to be scrutinized by mainstream governments. After all, they don't want people to enjoy true financial privacy. The more people obfuscate their transactions, the less power/control the government will have.

With DEXs, atomic swaps, and privacy-oriented cryptocurrencies (eg: Monero), we'll never have to worry about government surveillance ever again. Let's hope BTC devs integrate a privacy mechanism into the protocol (Zero Knowledge Proofs?) for complete peace of mind. If they do this, expect constant opposition from governments in the long run. Satoshi never intended to please the government in the first place, so why should the community do otherwise? Just my opinion

I agree with you and this is why the bans are worthless the same way it was worthless for China to ban BTC back in the early days (and the several times they did afterwards Cheesy

).

But they still have some potential tweaks up their sleeves in terms of laws and regulations. I think the most powerful they could implement and harshly enforce is the proof of origin of funds.

I am not fully away of the newest mixing services available, but is it possible for the user of a mixer to prove after the process to authorities that funds received from such a service are legally obtain funds sent to the service? Because if someone legally obtains an amount of BTC and then obfuscates all transactions, then sells and makes a profit and wants to declare gains appropriately at some point in the future, authorities could perhaps still decline the declaration of origin of funds? Do you have any opinion on that? Let me know if I should further elaborate on my question.

franky1

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Quote from: elevates on December 12, 2023, 08:42:49 AM

Currently, after the Sinbad issue, Bitcoin is being considered a laundering coin. The government would try its best to make it look like Bitcoin was the reason NK getting funds for their successful test of a missile. What I feel bad about is blaming Bitcoin and other crypto, what I think is the government lacked abilities to track the NK.

The original culprit was always China and its CCP regime but, the US ignored it as usual. They were doing it before Bitcoin even came into existence, for now, they found a way to blame everything on Bitcoin without even noticing the past. As for my understanding, it is nothing by hypocrisy and it would stay on as we progress to 2024.

no
governments recognise bitcoin as a currency. they are going after the SERVICES that use bitcoin maliciously
as for you narrative about china.. please turn off fox news, its not good for your mental heath and teaching you bad politics

elevates

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Currently, after the Sinbad issue, Bitcoin is being considered a laundering coin. The government would try its best to make it look like Bitcoin was the reason NK getting funds for their successful test of a missile. What I feel bad about is blaming Bitcoin and other crypto, what I think is the government lacked abilities to track the NK.

The original culprit was always China and its CCP regime but, the US ignored it as usual. They were doing it before Bitcoin even came into existence, for now, they found a way to blame everything on Bitcoin without even noticing the past. As for my understanding, it is nothing by hypocrisy and it would stay on as we progress to 2024.

franky1

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to mix or coinjoin different peoples funds. needs a coordinator..

otherwise your just moving your own coins into new addresses you own.. which is "tumbling" /"hopping"
which is not mixing nor coinjoin

when middlemen coordinators are deciding whos coins go to who to ensure coins dont go back to the funder.. it changes from being a software feature and becomes a service aka (VASP). especially if said middleman takes a fee..
if you read regulations and look at what they get services to do. you soon learn why we dont want bitcoin nodes to suddenly become "money services/vasps" because its letting in the regulators jurisdictions to set rules for node operations

Quote from: achow101 on November 26, 2023, 08:15:23 PM

Anything that requires a central coordinator is a non-starter for the Bitcoin Core wallet.

core already allows things like partially signed transactions to aid in mixing/coin joins of multiple parties.. but requires separate scripts or human co-ordinators to actually perform the service...
the minute the core or its user starts co-ordinating such things the user becomes a service or if core does it built in/automatically and fully, the software becomes a service.. and making core become a money service is a big legal no no for many many legal implications

Kryptowerk

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Quote from: Abiky on December 11, 2023, 03:16:38 PM

Quote from: Dump3er on December 10, 2023, 06:52:35 PM

It also doesn't really solve any problem if they ban mixers. There are so many services that essentially allow users to break traceability by going back and forth between different cryptocurrencies, or of course use Monero. And for as long as there is a need and a marktet for mixing services, there will be mixing services. They can maybe shut down one of those services every few weeks or so, but that doesn't stop anyone from setting up the next one. I was wondering if authorities should run their own mixing services as that would be an effective way to gather as much data about people as possible.

Mixers cannot be banned. Especially non-custodial/decentralized ones. Those who care about privacy will move on with their lives by using another mixer that's truly censorship-resistant. We knew from day one that centralized mixers were going to be scrutinized by mainstream governments. After all, they don't want people to enjoy true financial privacy. The more people obfuscate their transactions, the less power/control the government will have.

With DEXs, atomic swaps, and privacy-oriented cryptocurrencies (eg: Monero), we'll never have to worry about government surveillance ever again. Let's hope BTC devs integrate a privacy mechanism into the protocol (Zero Knowledge Proofs?) for complete peace of mind. If they do this, expect constant opposition from governments in the long run. Satoshi never intended to please the government in the first place, so why should the community do otherwise? Just my opinion

I couldn't agree more with this statement (marked in bold). If privacy is the default, then there is no way to flag/cencor certain coins and we have a fully fungible system, even better than cash in many ways.

Quote from: franky1 on December 11, 2023, 11:18:51 AM

putting privacy enhancing tools into main wallet apps and even the main core node software will cause more legal issues, because coin join/mixers requires a central manager and would effectively turn bitcoin from an open source software and turn it into a service. which then allows authorities to grab further jurisdictional footing into the bitcoin ecosphere

so no thanks. [...]

Is that so? I thought there are already decentralized versions of mixing protocols available - or is this indeed something technically impossible: A decentralized mixing solution? Source for your statement please.

Gormicsta

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If we're to choose over and over again I'd still choose anonymity and this is what Bitcoin mixers brings to the table. There's absolutely nothing wrong with me deciding to hide and conceal my business from the rest of the world, I really didn't like the idea that anyone would be able to track my transactions and trace it back to you so Bitcoin mixers partially solved that problem for me.

Now we all know that there are and will always be people who abuse anything and everything, there are people who take advantage of this opportunity and use it for their selfish interest but it would be wrong to term mixers and Bitcoin mixing as money laundering because all it has done is increase anonymity in the use of Bitcoin

Abiky

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Quote from: Dump3er on December 10, 2023, 06:52:35 PM

It also doesn't really solve any problem if they ban mixers. There are so many services that essentially allow users to break traceability by going back and forth between different cryptocurrencies, or of course use Monero. And for as long as there is a need and a marktet for mixing services, there will be mixing services. They can maybe shut down one of those services every few weeks or so, but that doesn't stop anyone from setting up the next one. I was wondering if authorities should run their own mixing services as that would be an effective way to gather as much data about people as possible.

Mixers cannot be banned. Especially non-custodial/decentralized ones. Those who care about privacy will move on with their lives by using another mixer that's truly censorship-resistant. We knew from day one that centralized mixers were going to be scrutinized by mainstream governments. After all, they don't want people to enjoy true financial privacy. The more people obfuscate their transactions, the less power/control the government will have.

With DEXs, atomic swaps, and privacy-oriented cryptocurrencies (eg: Monero), we'll never have to worry about government surveillance ever again. Let's hope BTC devs integrate a privacy mechanism into the protocol (Zero Knowledge Proofs?) for complete peace of mind. If they do this, expect constant opposition from governments in the long run. Satoshi never intended to please the government in the first place, so why should the community do otherwise? Just my opinion

franky1

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putting privacy enhancing tools into main wallet apps and even the main core node software will cause more legal issues, because coin join/mixers requires a central manager and would effectively turn bitcoin from an open source software and turn it into a service. which then allows authorities to grab further jurisdictional footing into the bitcoin ecosphere

so no thanks. leave it as a separate service instead of making it part of node/wallets by default

what people that operate or use privacy tools need to do is think smarter.. rather then ruin bitcoin just for an idiots greed/laziness of actually doing nothing to preserve his own privacy using his own actions in a smarter way.. just hoping bitcoin will do it all for them even at the demise of bitcoins open utility,

Dump3er

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Quote from: arabspaceship123 on December 10, 2023, 07:47:21 PM

We don't know so I'll say they'll make centralised exchanges seize coins which came from mixer addresses. If Monero isn't going to be traded in centralised exchanges ppl will mix XMR in bisq but when they're sent to regulated exchanges they'll be seized that's what's coming to my head.

There's a market for mixing so it isn't going out of business soon. If mixing's outlawed in your country you shouldn't mix. Unless it's against laws in your country you're allowed to mix but you can't launder money it's a crime. The trouble begins when money launder criminals use mixers it's when they get seized.

Quote from: Dump3er on December 10, 2023, 06:52:35 PM

It also doesn't really solve any problem if they ban mixers. There are so many services that essentially allow users to break traceability by going back and forth between different cryptocurrencies, or of course use Monero. And for as long as there is a need and a marktet for mixing services, there will be mixing services. They can maybe shut down one of those services every few weeks or so, but that doesn't stop anyone from setting up the next one. I was wondering if authorities should run their own mixing services as that would be an effective way to gather as much data about people as possible.

Yes that's what I think as well, but besides outright bans there are other ways to force people into avoiding cryptocurrencies like Monero or mixing services. If someone wants to improve or maintain privacy while at the same time be an honest citizen paying taxes on gains etc., these people could still run into problems when a proof of origin is required, I assume? For Monero it is ok as you could prove you controlled certain private keys to public keys in a chain of transactions, but when you use a mixing service it could become a hassle to prove anything to complete satisfaction of authorities. But that is pretty much the same with most of these swapping services where you can send coin X to get back coin Y. The strategy could be to make it so cumbersome that maintaining or improving one's privacy becomes such a distress that people start caring less.

Kryptowerk

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Quote from: cryptosize on December 09, 2023, 02:53:11 PM

Quote from: HmmMAA on December 09, 2023, 02:46:27 AM

Quote from: franky1 on December 08, 2023, 10:55:52 AM

Quote from: cryptosize on December 08, 2023, 08:54:18 AM

Quote from: HmmMAA on December 08, 2023, 07:53:47 AM

Full anonymity on the internet is a no go . If three letter agencies decide to track you down , you are doomed .

Sure, it's not easy, but care to explain how Satoshi's identity still remains a secret 15+ years after BTC's announcement/whitepaper?

You fail to understand that you are not the all seeing eye . That you or i don't know who satoshi is , doesn't mean that satoshi's identity isn't known to everyone . Who are the ones that know it ? If i had to guess , people close to him that are good in keeping secrets . Oh , and of course three letter agencies , if an order to find him was given at some point .

And three-letter agencies have done absolutely nothing regarding Satoshi during the last 15 years because...?

Because the "the cat is already out of the bag". - The core idea of Bitcoin and its current implementation are unstoppable. Satoshi has nothing to say in that, even if he were to appear right now.
So in regards of Bitcoin it would be of little help for any government or agency to confront the real Satoshi in whichever way.

To bring this back to topic:

I still believe the only way to go about Bitcoin privacy is making it mainstream. Right now only a handful of dedicated wallets offer a coinjoin / whirlpool or similar option. If instead this was an integral part of most commonly used wallets (hard and software) and would needed to be turned-off first instead of turned-on, it would exponentially help the privacy of Bitcoin.
So it's up to the devs in the right positions to make this option more broadly available, easily accessible and ideally auto-on from the get-go.

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We don't know so I'll say they'll make centralised exchanges seize coins which came from mixer addresses. If Monero isn't going to be traded in centralised exchanges ppl will mix XMR in bisq but when they're sent to regulated exchanges they'll be seized that's what's coming to my head.

There's a market for mixing so it isn't going out of business soon. If mixing's outlawed in your country you shouldn't mix. Unless it's against laws in your country you're allowed to mix but you can't launder money it's a crime. The trouble begins when money launder criminals use mixers it's when they get seized.

Quote from: Dump3er on December 10, 2023, 06:52:35 PM

It also doesn't really solve any problem if they ban mixers. There are so many services that essentially allow users to break traceability by going back and forth between different cryptocurrencies, or of course use Monero. And for as long as there is a need and a marktet for mixing services, there will be mixing services. They can maybe shut down one of those services every few weeks or so, but that doesn't stop anyone from setting up the next one. I was wondering if authorities should run their own mixing services as that would be an effective way to gather as much data about people as possible.

Casdinyard

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Too late to rock the cradle at this point. The dust has settled and mixers are going to be unwelcome in this forum from January 1 onwards.

And while you make a compelling case about why mixers aren’t to be considered as AML-defying machines, the thing is that, they are still used to conduct and protect people who commit illegal activities. Hackers and scammers getting away with millions of untraceable money in some cases all because of mixers.

Believe me, I’m more about keeping mixers in the forum and in the crypto industry as much as the next guy since privacy is the crowning glory of crypto apart from decentralization. But the thing is, it has done more harm than good upon bitcoin’s reputation at this point that we’d have to come up with a better way to commit to security.

Dump3er

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Quote from: arabspaceship123 on December 10, 2023, 06:45:51 PM

Your thoughts on the reply matches mine because I don't know why mixers get bad rep if they're used for privacy. If they're being used for crime it's a different thing govts will go after them but if they aren't laundering they're supplying services to ppl wanting to increase privacy they shouldn't be considered money laundering factories.

If they're made illegal in your country it's different so now you can't be a criminal for using mixers to get more security or anonymity.

Quote from: AHOYBRAUSE on December 10, 2023, 01:31:32 PM

Word, my thought exactly.
I don't understand why mixers get such a bad rep!! I mean people like privacy, where is the problem in that.
Sure there are some that use mixers for no so legal reasons but you can't throw all users in 1 pot, that's just not right!

I used mixers before, not to hide anything, not to circumvent taxes, not for anything illegal, just for straight up security of my privacy! What does that make me?

It also doesn't really solve any problem if they ban mixers. There are so many services that essentially allow users to break traceability by going back and forth between different cryptocurrencies, or of course use Monero. And for as long as there is a need and a marktet for mixing services, there will be mixing services. They can maybe shut down one of those services every few weeks or so, but that doesn't stop anyone from setting up the next one. I was wondering if authorities should run their own mixing services as that would be an effective way to gather as much data about people as possible.

arabspaceship123

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If they're made illegal in your country it's different you can't use them so now you can't be a criminal for using mixers to get more security or anonymity. It's probably going to happen soon but we don't know when.

Your thoughts on the reply's same as me. I don't know why mixers get bad rep if they're used for privacy. If they're being used for crime it's a different thing govts will go after them but if they they're supplying services to ppl wanting to increase privacy they shouldn't be considered money laundering factories.

Quote from: AHOYBRAUSE on December 10, 2023, 01:31:32 PM

Word, my thought exactly.
I don't understand why mixers get such a bad rep!! I mean people like privacy, where is the problem in that.
Sure there are some that use mixers for no so legal reasons but you can't throw all users in 1 pot, that's just not right!

I used mixers before, not to hide anything, not to circumvent taxes, not for anything illegal, just for straight up security of my privacy! What does that make me?

AHOYBRAUSE

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Quote from: darkangel11 on December 09, 2023, 09:03:59 AM

Quote from: Litzki1990 on December 09, 2023, 07:41:23 AM

Mixers are usually used to avoid government taxes.

How do you know that? Show me statistics that say that 60% of all coins that went through mixers were later used to hide from taxation. Most people don't have to mix coins to avoid taxes. They just need to exchange privately into cash and boom, nobody can prove that you bought something with your bitcoin. You can go to a post office, pay your bills with cash and there's no trace it came from bitcoin.

Even if you could prove that statement (which you can't) is avoiding taxes really a bad thing from the point of view of an average citizen? I always thought that if laws are unjust we shouldn't obey them.

Word, my thought exactly.
I don't understand why mixers get such a bad rep!! I mean people like privacy, where is the problem in that.
Sure there are some that use mixers for no so legal reasons but you can't throw all users in 1 pot, that's just not right!

I used mixers before, not to hide anything, not to circumvent taxes, not for anything illegal, just for straight up security of my privacy! What does that make me?

Abiky

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Quote from: HmmMAA on December 08, 2023, 07:53:47 AM

I think it's too easy to control pools and miners , especially with the current status . Most hashpower is based in US and China . Forcing big mining farms to commit their hashrate to specific pools will be the easiest part . Comply or go to jail , easy choice . And if you don't agree as a big mining farm , shut down your miners and move to another country by loosing a big portion of your profitability because in the meantime new gen machines might make your investment even more unprofitable . Most people haven't really understand how hard this is for a company that want's to make profit . And the fun part is that people that haven't even mine say that nonsense that miners will move to non regulated pools . They haven't understand how things work , technically and financially .
As for the stratum v2 , i have explained here why it won't work https://bitcointalksearch.org/topic/m.63254857 .
As for the p2pool , can you guess why it's not still present ? Think of how decentralised mining would work , and you will see that there's not such think as the reason to mine is profit .

There are a few countries with a large concentration of hashrate (mainly the US and China) on the BTC blockchain. But that doesn't it's the end of the world. If Bitcoin becomes compromised, the minority can create a new chain with decentralization/censorship-resistance in mind. Centralized mixers on the other hand, can be stopped because of the way they're designed. That's where non-custodial (decentralized) mixers come in. People can still enjoy financial privacy on Bitcoin by using these alternatives.

Even if governments declare bitcoin mixing "illegal", there's nothing stopping anyone from doing it secretly. There will be a truly-decentralized economy that no government will be able to get its hands on it. Decentralization must be preserved to render governments' attempts to destroy crypto futile. BTC has gone this far despite strong opposition from banks and governments worldwide. So I'm certain it will survive another 1-2 decades from now. Who knows if BTC ultimately beats Fiat currencies for good? Cheesy

cryptosize

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Quote from: HmmMAA on December 09, 2023, 02:46:27 AM

Quote from: franky1 on December 08, 2023, 10:55:52 AM

Quote from: cryptosize on December 08, 2023, 08:54:18 AM

Quote from: HmmMAA on December 08, 2023, 07:53:47 AM

Full anonymity on the internet is a no go . If three letter agencies decide to track you down , you are doomed .

Sure, it's not easy, but care to explain how Satoshi's identity still remains a secret 15+ years after BTC's announcement/whitepaper?

You fail to understand that you are not the all seeing eye . That you or i don't know who satoshi is , doesn't mean that satoshi's identity isn't known to everyone . Who are the ones that know it ? If i had to guess , people close to him that are good in keeping secrets . Oh , and of course three letter agencies , if an order to find him was given at some point .

And three-letter agencies have done absolutely nothing regarding Satoshi during the last 15 years because...?

Twentyonepaylots

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Quote from: Litzki1990 on December 09, 2023, 07:41:23 AM

Mixers are usually used to avoid government taxes.

It happened that they knew about this. We would not know if someone is trying to evade taxes from government or mixing cryptocurrencies from illegal activities such as hacking.

Quote from: Litzki1990 on December 09, 2023, 07:41:23 AM

Mixer allows you to trade your bitcoins in the most confidential manner. Since transactions are completed secretly through mixers even with official approval, it would not be wrong to consider it as illegal, but it cannot be compared to money laundering.

How can we know that it cannot be compared to money laundering? we know for a fact that hackers/frauds are using mixers to avoid being caught though this is hard to explain because we can't have a proof.

Quote from: Litzki1990 on December 09, 2023, 07:41:23 AM

We have learned several times how bad money laundering is. There's a good reason Mixer has been criticized so much lately because there have been several popular Mixer campaigns on this forum that ended up being scams. The forum may have decided not to allow any more mixer campaigns on this forum due to popular mixers being scams so as not to damage the forum's reputation.

Theymos are keeping the forum's best interest, not to taint it with some bad reputation in public so he did it. I would agree with his decision to ban it in the forum as it will cause chaos to the forum in any time possible if he didn't do it. Good thing he gave us all an ample time and didn't ban it right away.

Topic: Bitcoin mixing is NOT money laundering, per se (Read 3942 times)