Topic: Bitcoin mixing is NOT money laundering, per se - page 8. (Read 3983 times)

Do you even know what ZK and KYC mean?  It is zero knowledge and know your customer.  How can you provide a proof that you know your customer if you have zero knowledge about him?


In FinCEN proposal it says that you can only use bitcoin through centralized exchanges that require KYC.  Their definition of "CVC mixing" is totally broad: https://fincen.gov/sites/default/files/federal_register_notices/2023-10-19/FinCEN_311MixingNPRM_FINAL.pdf, page 30.

think harder

learn how regulators define mixers/coinjoin.. then think of practices not within those definitions
EG fiat example
a retailer receives funds. and pays out funds. they are not defined as a MSB/MTS nor mixer

however offering a service that wants to describe itself as a mixer then pigeon holes itself into the category.

think harder.. think about something not described/advertised/promoted as a mixer but allows money flows without MSB/MTS regulation

oh and "taint" is a bitcoin term created far before chainanalysis was even a thing..

That's baloney. The only way to remove "taint" (which is just an imaginary concept which was invented by blockchain analysis companies who sell their services to exchanges) is by making a series of transactions with a bunch of other people's outputs so that nobody is able to figure out what belongs to who.

In other words, a coinjoin, or a mixer - which is just a very large and continuous coinjoin by definition.

If you're living in the US and this bills passes, you should absolutely forget about centralized exchanges, as you may be accused of funding terrorism because of potentially bad coin history. Unless you buy and store all your bitcoin there, which would nullify Bitcoin as concept in the first place, and you shouldn't do it.

It didn't happen, usual nonsense again. There are lots of posts from Satoshi in which he talks about Bitcoin in terms of privacy, none of which he claims it's built to take away anonymity. Hell, he was even talking about "blinding keys" and "group signatures", techniques which are very similar to ring signatures and stealth addresses used by XMR: https://bitcointalksearch.org/topic/m.9074.

The government can pick any reason out of a hat to seize and stop privacy solutions and that is because the government stands against privacy. You must understand that money laundering and illicit activities are mostly perpetrated by centralized services and their institutions and not so much with BTC or BTC privacy solutions. But they want you to believe their lies, and the more people believe in the lies that they tell, then they wouldn't want to use privacy solutions nor protect their privacy, since they could be accused of crime if they do so.
Guns are tools that the police use in stopping criminals and protect citizens, but the bad guys also use guns to rob, kill and take hostage, do we then ban guns?

Proof (Satoshi quote) or it didn't happen.

That's exactly the part you fail to understand . Banks do that because there's not a public ledger that they're working on . Bitcoin was built exactly to eliminate that kind of operation . So that anyone can audit and make such behaviors extinct . To make even governments accountable based on evidence , not only banks . Guys like you are trying to create a new ( similar to old , but even more complex for audits ) banking system that gives everyone the opportunity to do what big/bad entities were able to do so far . You don't want a better outcome for the whole , but a better outcome for yourself even if that comes against the interests of the whole , because "privacy" . While we should be here discussing how to better protect our privacy - for example ZK proof for KYC/AML - we are wasting time on how bad governments are . If governments are bad let's make something that can make them better , and not us to become worse than them .  
Bitcoin can't be compared with banks , it can be compared with cash  . Bitcoin is a traceable electronic cash system . It was built to take away the worst part of traditional cash which is anonymity . You fail to distinguish the differences between anonymity and pseudonymity and why anonymity can lead to bad results as there are no consequences .    

the reason the mixer dev (as you want to pretend its all he was) was in legal dispute not simply for "just writing code" it was that he was financially benefitting from the proceeds of crime because he received funds from criminals that used his code.
also he offered a service and he took a fee per transaction, which made him a MSB/MTS, which comes with regulations.. it really does and should benefit you if you read regulations and court documents, instead of misinformed bias blog posts..

if you want to offer a service and publicise it to customers/clients. you are running a business
if you are running a business, you need to be business savvi to limit your exposure to customer liabilities and laws
if you want to offer a service but not be defined as a operating a business. you need to be extra savvi to operate in such a way that does not meet the definitions of such business

and banks do get penalised. its just the maximum penalty is:
for a bank: just X days fees 0.x% of liquidity
for an individual: more then they can ever afford to pay the court fine

also individuals do not set themselves up as legit businesses to shift the liability away from the operator. so by operatng a business but not doing o officially is a double hit personally

which is why individuals operating as MSB/MTS get hit harder because they are personally made responsible rather than the debt/claim/penalty/charge being pushed to the 'business'

Lol. You think the government only take action against things which are illegal? The government works exclusively for themselves, and will take action against anyone or anything which threatens them, illegal or not. They'll take action against someone who did nothing except write open source code under the guise of tErRoRiSm, but they will ignore fiat banks laundering literally hundreds of billions of dollars for actual terrorist organizations.

And the internet is a tool or instrument in money laundering, and fraud, and terrorism, and lots more. Should be ban the internet as well?

You are correct. I only wanted to tell everyone to be careful, however. Let me rephrase and let me share the announcement from Fincen.

Based on a recent report, this could affect more than 300 million users of unhosted CVC wallets insofar as a user’s personal information may be reported if their wallet is deemed by a covered financial institution to be involved in a covered transaction. Because there is no restriction on the number of wallets an individual may have, this number may overestimate the number of unique individuals whose personal information may be required.

Source https://www.fincen.gov/sites/default/files/federal_register_notices/2023-10-19/FinCEN_311MixingNPRM_FINAL.pdf

@everyone. Based on this and if anyone has already used a mixer or DeFi with a certain wallet, be careful on using the wallet for centralized exchanges or gambling sites where you have KYC accounts if these new rules are implemented.

It is true that Bitcoin mixing is not money laundering, but it can be a tool or instrument to use in money laundering. There will be no money laundering activity if no one thinks to use the Bitcoin mixer for his bad intentions or purpose here. So what others said is correct: it depends on the intention of the bitcoin holders.

Even though there was no Bitcoin back then, there was money laundering happening in different countries. Even though there was no internet back then, there was money laundering happening already, right? The others even go through the black market, as far as I know. So, it means that other money launderers saw that they could use or abuse the Bitcoin mixer for money laundering activity. Though, this is not the main purpose of Bitcoin Mixing.

If there was really nothing suspicious about the service mentioned in OP, government must not have taken action against them. When something gets out of hand, then it becomes necessary for government to take action and this is what happened in case of chipmixer.

The work of mixers and CoinJoin isn't to combat money laundering, it is to provide better privacy for people who use BTC. Kyc and privacy are mutually exclusive, so you cannot offer privacy and at the same time collect people's data.

Take note that the government and anti bitcoiners are trying very hard to spread the idea that BTC and privacy implementations like mixers and CoinJoin are a big problem in terms of money laundering and the movement of illicit funds, but it is not true, there are other payment methods that are more attractive to money launderers and many people do not even know because of what the media tells them.

ok here is a game for you.. you know what mixers do for innocent people.. now pretend the word MIXER was never invented. invent another work that doesnt meet the details of regulations but produces same end result for the user..

each time you keep saying "mixers" have to continue. is continuing the issue..
uber replaced taxi cabs.. so think outside of the box of promoting MIXERS

It's just like the Internet. People can use it for both good and bad things. There's nothing governments can do about it, other than enforce the rule of law whenever possible. Instead of hunting down crypto mixers, governments should hunt down people using these services for illegal activities. Not doing so tells us there are other intentions. We all know governments want to destroy crypto (or at least minimize its impact on the mainstream economy) because of its decentralized design. Especially anything that has to do with privacy. When they can't track or control financial activities, that's when you become a threat to the corrupt system empowered by banks.

I believe the future of crypto mixers lies in decentralization. The more non-custodial (decentralized) mixers there are, the harder it will be for governments to stop people from obtaining true privacy. I'm yet to see how it's possible to stop criminals from using decentralized mixers for breaking the law (money laundering, tax evasion, etc). KYC/AML is not the answer to this. We can't predict the future, so lets hope for the best. Just my opinion

This notion basically defeated the purpose of having to use a mixer but then again if mixers want to help combat money laundering, I guess it wouldn't be such a bad idea. I guess that we have to find a way where the use of mixers aren't going to lay any suspicious eye on the people that are using bitcoin mixers. Damn, the problem of malicious entities is that they're abusing the freedom that the innocent has to enjoy is such a conundrum.

VERY WRONG MESSAGE
mixers are the problem. they are literally listed in regulation as a problem. the word "mixer" does get mentioned in regulations.. so to avoid the penalties of regulations, avoid the descriptors of the regulations that can lead to you getting watched by services and then reported to authorities


the draconian rules exist.. ignoring them and doing things that are listed as getting you surveilled is not the cure to avoiding getting you surveilled

what you should be saying is "learn the draconian rules. then invent a service does the end result you are looking for, but sidesteps/does not do the listed details of the certain named thing

EG if taxi cabs are regulated.. create uber
if apple apps are regulated on applestore.. create googleplay or an apk repo

the solution is not to be EG a tax evader by ignoring tax law/pretending taxlaw does not apply... its instead to learn tax law and find the loopholes to be a tax avoider, doing things not listed in law as prohibited, regulated, monitored

there are many ways to remove taint without doing the things listed in regulations. that are not "mixers". find them, create them, use them

Wrong message.

What we should be saying is "Be careful using centralized exchanges", or better yet "Never complete KYC anywhere." Mixing is not the problem. Coinjoins are not the problem. If anything, knowing how draconian the government is being with trying to surveil you and your coins, you should be mixing and coinjoining more, not less. Stay private, and stop using services which sell out your privacy at the drop of a hat and work in cahoots with your government to surveil, monitor, and control you.

You are either free, or you comply. You can't be both.

So does the internet. Shall we ban that too?

As the figures I've outlined above show, even by FinCEN's own research, the amount of illicit money being moved through mixers is absolutely minuscule. Like, we are talking less in the last decade than fiat banks launder in a few days.

You are on point my friend, human beings are too desperate and hellbent, and they use any available loopholes to perpetrate their deeds. Bitcoin itself is good, and so is the mixing of the coin (after all, it enhances privacy and anonymity where the primary design of the coin could fail).

But mixers also create avenues for bad actors, 100% of the people who use mixers can't be using them for good. We can suspect that with the cracks in hundreds of millions of dollars by various governments so far.

People are actually using mixers to perpetrate their evil, regardless, we can't blame the coin, neither can we blame the mixers, let the deeds of those who use them judge them for whatever thing they use them for (good or evil).

I very much agree. This is not only an attack on mixers, this is also an attack on the whole cryptospace. The broad wording under the new rules was speculated to also include DeFi and other types of decentralized swaps.

Presently there might be 300 million wallets that might be affected and the owners of those wallets might have their personal information reported. Be careful on using a mixer then sending coins to a centralized exchange or a gambling site where you have KYC.



In the course of compliance with special measure one, covered financial institutions may be required to submit reports and retain records containing certain unique identifiers108 and other personal information109 of a party, or parties, to a CVC mixing-exposed transaction.

Based on a recent report, this could affect more than 300 million users of unhosted CVC wallets insofar as a user’s personal information may be reported if their wallet is deemed by a covered financial institution to be involved in a covered transaction. Because there is no restriction on the number of wallets an individual may have, this number may overestimate the number of unique individuals whose personal information may be required.

To the extent that previously reported estimates regarding the distribution of CVC mixer users by type—privacy-oriented versus abusers of anonymity—are usable for inference, special measure one could require the reporting of personal information in connection with up to approximately 66 (87) percent of CVC mixer deposits in the absence of any other identifiable connection to high risk (illicit) activity.

Source https://www.fincen.gov/sites/default/files/federal_register_notices/2023-10-19/FinCEN_311MixingNPRM_FINAL.pdf

Also, if the American government wanted to really crackdown on terrorist funding and moneylaundering, they should begin with the biggest banks in Europe and sanction them hehehe.