This is attacking our privacy and Bitcoin altogether.
This.
This isn't an attack against mixers - this is attack against bitcoin itself, against privacy itself. Here is how they are defining "mixing" for the purposes of this report:
The term “CVC mixing” means the facilitation of CVC transactions in a manner that obfuscates the source, destination, or amount involved in one or more transactions, regardless of the type of protocol or service used, such as:
(1) pooling or aggregating CVC from multiple persons, wallets, addresses, or accounts;
(2) using programmatic or algorithmic code to coordinate, manage, or manipulate the structure of a transaction;
(3) splitting CVC for transmittal and transmitting the CVC through a series of independent transactions;
(4) creating and using single-use wallets, addresses, or accounts, and sending CVC through such wallets, addresses, or accounts through a series of independent transactions;
(5) exchanging between types of CVC or other digital assets; or
(6) facilitating user-initiated delays in transactional activity.
This definition excepts the use of internal protocols or processes to execute transactions by banks, broker-dealers, or money services businesses, including VASPs, that would otherwise constitute CVC mixing, provided that these financial institutions preserve records of the source and destination of CVC transactions when using such internal protocols and processes, and provide such records to regulators and law enforcement, where required by law.
This essentially makes illegal
everything except fully KYCed bitcoin held on centralized exchanges which report every single deposit, trade, and withdrawal to the US government. Mixers fall under (1). Coinjoins fall under (2). Casinos and sportsbooks fall under (1). Any non-KYC exchange falls under (1) and (5). Any kind of decentralized or peer to peer trading falls under (5).
And most importantly, simply owning your own coins, holding them in your own wallet, and using them as you like falls under (3) and (4). "Creating and using single-use addresses", for fuck sake! You know, the entire way bitcoin is supposed to be used in the first place.
This needs fought against, hard.
Re-reading the proposal in more depth, and here's another piece worth highlighting:
FinCEN’s analysis of the top 10 CVC mixers by volume per commercially available data determined that approximately 33 percent of all deposits as of August 2022 were attributed to high risk sources, with 13 percent of all deposits coming from known illicit activities.
In August 2022, FinCEN analyzed 10 mixers, finding that these services processed more than $20 billion in total volume between January 2011 and August 2022. The majority of this total occurred between January 2021 and August 2022. FinCEN assessed what sources constituted high risk and illicit activites based on commercial source attributions of entities.
So $20 billion in volume over a 12 year period, 13% of which was from illicit activities. So a grand total of $2.6 billion of illicit money over 12 years. Let's put that in to context. Danske bank laundered $230 billion through their branch in Estonia. Wachovia laundered $390 billion for drug cartels. Standard Chartered laundered $265 billion for Iran and other sanctioned nations. 18 of the world's biggest 20 banks have been fined for money laundering - and these are only the cases we know about. By FinCEN's own research (which just so happens to be a black box like all bullshit chain analysis - I wonder why?
), a
single money laundering incident involving a
single fiat bank is responsible for more than 100x all illicit mixer use over the last 12 years. Once you combine the hundreds of fiat bank money laundering incidents, then this $2.6 billion attributable to cryptocurrency becomes completely irrelevant.
Ask yourself again why they care about this minuscule fraction so much while turning a blind eye to the fiat banks, which are multiple
orders of magnitude worse.
