Topic: Can we see coin mixing services as money laundering services ? (Read 2675 times)

Bitcoin mixing service can help with the increase of privacy since all the coins get mixed up together and it is harder to track the coins. Even though some of the users may use mixers for mixing coins, many would really want to ensure that they get the maximum privacy possible. Money laundering helps to supplement Bitcoin's pseudonymous nature.

which is correct but mixing itself can added security to your identity just like the previous replied said its use for adding additional precaution to avoid  hackers to track you up, having this service can help us but can also harm if used incorrectly like money laundering or any illegal activities.

If it is very important for you to hide your spending, use more than mixing, use other computers, other methods and research what you are doing.  You can get caught and will if you count on nothing more than a simple mixing service.

Same thing if you frequent sites that are into things other than gambling.  Use the same computer for both wallets and the same thing is true.  Even if you never did a thing other than hold some BTC, they tracked you.  I believe that coin mixing can bring the anonymity back to the coins.

^^^  Yes.  That's exactly who those of us concerned about privacy are willing to pony-up a little bit (typically under 1%) to hide our tracks some with a mixer.  It's nobody's business where my BTC are.  I paid for them, they're "mine".  And hidden is better.

+ 100 re .gov wanting to eventually control payments to anyone they do not like or FROM anyone they wish to punish.*

Those of you who do not understand this aspect of BTC mixing should think long & hard about this, unless you're comfortable with government monitoring (and later control) over all you buy & sell...  And I have not even mentioned hackers...

* Note that .gov likely has some great tools that would uncover even extremely clever mixing and/or other ways of obscuring BTC transactions.

The description of what is and isn't a "sin" purchase only shows where this is going.  Eventually the government will be telling you how much you can drink, smoke and visit the strippers, lol.  Gasoline sales can be curbed during shortages, some sales prohibited all together and no matter whether controls are placed or not, each sale you make sends a clear message about what you are buying and what you are not to the system.  Will a diabetic be able to buy candy for their kids?  Things can get crazy and while this may be able to keep guns out of criminals hands 10% of the time, it is the common consumer, stranded at the counter on labor and unable to buy beer for the party without three people emailing affidavits to the bank stating it is to be shared by them. 

Yes it's a mixer so of course you can launder money with it. That's exactly what laundering money is. Now of course it's nice to have some extra security but either way it's trying to hide a paper trail for on reason or another.

Crypto mean hidden, so in crypto currency allow for to hide our money, financial matters from the world and for making the anonymity more stronger we are allowed to use mixer for our bitcoins.

That's what I'm saying myself. With bitcoins, no one can claim with surety that these bitcoins are yours after you mix them. It looks as if you spent them by transferring to an address which doesn't belong to you even if money laundering was not your intention. On the contrary, when you change money at the shopping mall, you still own the same amount of money, even if this money is not made up of the same notes. In the first case the link between you and your coins is lost, while in the second it is obviously not so. Your money would still be considered as "dirty" in that case, you didn't launder it even if you went just for that.

I never claimed bitcoin mixing to be money laundering, my opinion is actually that it is not.

You should mix a coin to understand how it works.

On the subject:

$100 bill -> $50 bill + 5x 10$ bill

1 BTC -> 0.5 BTC input + 5x 0.1 BTC inputs

With bitcoins you receive inputs that are not related with your original bitcoin, with dollar bills that's not even an issue.

Well, you seem to be basically proving what I'm trying to convey. I don't know if bitcoin mixers allow sending coins to different outputs from one input, though this should be expected. Why would you then want to do that if not to hide the origin of the money and to whom it belongs? If this analogy were correct, it would mean that asking a cashier to change your notes should also pass as money laundering. But this is the opposite of what the poster which I replied to is claiming.

You are evidently looking at the superficial similarity of these two cases. But I'm claiming that this analogy is not correct in essence. Unless you are trying to get rid of fake bills, of course. Strictly speaking, the latter is not money laundering because the money is counterfeited.

The analogy is quite perfect, you usually receive several transactions of smaller value.

Basically you give a bitcoin and receive some other bitcon back in several transactions, just like the analogy.

Do you need to change your bitcoins for smaller denominations? If not, then your analogy is far from perfect.

On the other hand, changing your paper money can be used for money laundering of sorts. For example, if you wanted to get rid of counterfeit dollars that you have just printed, going to a mall and buying some knick-knacks might be a good idea. Just asking for change would obviously raise suspicion, and malls usually refuse to change money. I witnessed that myself a few times (cashiers refusing to change money).

Money laundry and cryptocoin mixing services are  similar and different in some areas.
Money laundry is dubious and illegal but coin mixing is legal but can be use to change the block of the coin mined.
Also both can still be use for illegal and dubious activities.

If I give you a $100 and you go to a vendor and ask for change, and he gives you 1 x $50 / 2 x $20 / 1 x $10 notes, are you then busy with money laundering? The same apply to Mixer services. They take the Bitcoin you received, mix it up a bit and give you smaller change. < They take some, as a fee for this service > Why do you need to do this? If all transactions can be followed and tracked, you would not have any financial privacy.

You just make it more difficult for whomever is looking to follow your money. The banks are doing this for you, with their old outdated private ledgers. ^smile^

There is still a slight difference between the money laundering and coin mixing. Money laundering is not so much about hiding money as making it appear legal. You hide the origin of the money to use it publicly as a law-abiding citizen. When you mix your coins, you typically don't want to hide their origin because in most cases it is already well hidden by the Bitcoin network itself. You just want to break the link between the money and yourself (your wallet), so that these coins are no longer recognized as yours unlike money laundering. That seems to be the main difference.

it is the way you use a service that defines it. you can use it for money laundering or you can use it to improve your privacy and make yourself safer.

many people see bitcoin as a criminal coin and a type of money that is being used for illegal activities but we all know that is not true.

so the same way is about mixing, many are using mixing to hide their identity to stay anonymous and try to avoid getting targeted by hackers, government, ...

But sending money from one bank account to another need data, and usually it is about using mules to hide real origin of money. If someone steal Bitcoins don't actually need to do that, can simply use TOR to hide transaction with market or use LocalBitcoins..

They are the same if thats your intent. Money laundering involves transferring money through foreign banks in order to hide the source or origins. If you mix the coins, then you are essentially doing the same thing. However it is even harder for the banks to figure out you had the bitcoins in the first place.

Mixing coins is It is something completely different than money laundering.. But i was always wonderend if for any "secret agencies" it is not a perfect idea to open mixing service just to know who is trying to hide transactions or some large amounts of Bitcoin..

Yes, the usual definition of money laundering is the act of turning "dirty money" (from illegal operations) into clean money.

However, as a user of mixing services, I now note that the term "money laundering" is being changed by our government from the above to:

""Money Laundering" is having money the government does not know about."

A big ugly difference.  Privacy <> Illegality

That wouldn't be a very wise decision overall. Closing some mixing services that they have managed to successfully trace down would only make the remaining ones which they failed to close even more vicious and dangerous as well as suspicious and paranoid. It would work like a natural selection of sorts where only the most secure and elusive mixers survive. The rational strategy would then obviously dictate not closing down but rather taking mixers under the control of intelligence and security services such as FBI, or even setting up a few supervised mixers themselves.

yes mate thats right because if you are not hiding anything the service of bitcoin system already hide you so it is anonymously done so if you are just using it in a normal ways theres no need to use mixing services and for me thats the reason why most of those suspicious transaction has been done using mixing services including money laundering for sure.

Usually we call money laundering to the act of turning illegal gains into legal gains, by simply mixing your coins you don't do that, you still have some coins you cannot show its origin.

The normal Bitcoin transaction is easily traced, if you care a little bit.  For you and me it can be hard to get to the final person who spent the coin, but the government can easily do this.  If your exchange address where you receive payments from a gambling site ever sent coins to a software wallet and that software wallet at another point funded an exchange where you used an email that is linked to you, then within seconds software can associate your name, your Facebook profile and everything else with that gambling site. 

Could you name a single reason why you would use a mixing service unless you were going to hide something? You might be looking for privacy, this is understandable, but doesn't Bitcoin provide enough privacy by itself? In my opinion, mixing services have everything to do with hiding the origins of your money (money laundering included).

Banks? I think they are not oblig to tell who's fraud and who is not it is the part of their costumer protection but if some certain law will gonna sue i think they can easily open the bank  accounts of the fraud but they cannot seize the full operation of the bank since they are not affiliates, but in coin mixing service well it has a high chance for that but it is really very hard since i think mixing site owners i think do some counter measure for that so they can sustain their business to still run, and it has nothing to do with those fraud since they cannot stop them to use their service.

People are right, everything can be used as money laundering service. It`s not even a bad thing, it`s making dirty money legal. It`s not just services, every shop or store can be used for laundering money. It`s not hard, you just need to have good accountant and he will tell you exactly what to do.
I never used some coin mixing service, and I don`t know anyone who used it. I don`t know what can we do with them and what is the reason of their existence.

"They will hide the transaction txid so they will not publish it to public." Why would I hide my txid transaction?

The point is......whether it is the government, your bank or whomever, you are being tracked, you are being profiled and that may be fine, but if it is not fine to you, then there is Crypto. 

If coin mixing services are money laundering services for sure the FBI are going to ask the coin mixing companies to close immediately. How about the banks? They are being used for money laundering too but no proper actions. It is really going to depend on how we are going to coin mixing services legally and not going to get attached with illegal ones.

You're spot on here. People however have a small field of sight where they either don't realize, or don't know that there are more ways to mix "dirty" coins than just using a dedicated Bitcoin mixer.

But maybe the point of OP was that dedicated Bitcoin mixers don't require any verification in order to use them, and also don't save any logs about the mixed transaction.

Why just mixing services, any business could be misused for money laundering. I do not understand what is point on targeting a mixing services for money laundry as mixing services is almost equivalent to any other bitcoin related services like gambling / exchange /online wallet /lending.

A wrong person may misuse any bitcoin business for his illegal activities, particularly bitcoin mixing service has nothing to do for money laundering.

I personally feel thats what they have been for all this time. No one really uses them for the anonymitiy factor unless he has been doing something illegal.

If you don't think bitcoin as money, then coin mixing services isn't money laundering services.
If you think bitcoin as money but you think people mix their coins to protect their privacy(not because illegal activity) OR the owner never think his/her services as money laundering services, then coin mixing service isn't money laundering service.
But, if you think everyone who use this service as money laundering services and the owner also think that way, then coin mixing service isn't different with money laundering services.

In short, it depends on your opinion/views. Personally, i don't think coin mixing services as money laundering services.

Nobody knows nothing about coin mixer sites, looks like they are enigma for almost everyone. Its logical to think how this service is for money laundering. People who are using it are trying to hide where coins come from.
I'm reading that exchange sites also can be used for same things, buy fee can be higher there.
Is there any way or possibility to follow coins after someone used coin mixer? Or there is no way to follow it after that?

They have explained at the beginning will hide the transaction txid so they will not publish it to public. You can make money laundering itself without using mixing site.

For eliminating your track is will become more easily for using mixing service and I can't think if that is be fallen into the officials and what happened for next time?be a soft field for them.

maybe they can do this, because no one really know what exactly they do and they will not give the right answers. but people which invole with illegal money, then i think that people can use this to money laundry their money so it will not detected by anyone. but be careful before you do this, any risk that will happen is for yourself.

Learnt much knowledge from your post, it seems like mixing service is not very safe, how about monero or dash for them? More anonymous than mixer?

Is bitcoin money ?

word 'money' is a 'unit of perpetual value' therefore anything of value is considered money. Bitcoin is worth something because people say it is. Gold and silver is worth something because people say it is. it has value because it is rare. Before this we traded in salt the word salary means salt because salt use to be very rare so they traded in it becuse they needed it.

Today we have peices of paper which origonally was tradable for gold but these days there is not enough gold to back up the paper money. But you do not need the gold because people will accept the paper money for goods and services just like they did salt back in the day. Bitcoin is merely a digital version.

Also think about banking and credit cards. Your money in your bank account are just digital numbers that is all they are. Just like bitcoin.
You can withdraw bitcoin to paper money if you like because bitcoin has a value bitcoin is rare because it is mined.

If someone ever tells you that bitcoin has no value then simply tell them that a lump of metal (gold silver) has none either since it's just a chunk of metal.

Why do you ask, are you a Fed looking to bust people? People mix coins for a number of reasons, it doesn't take a genius to think of reasons why people do it.

I would say that in mixing service, the coins are mixed but still some trace remains between the input and output. So they are not 100% clean.
 
In a coin laundry, there would be no link between the dirty and cleaned coins. Possibly the clean coins come from freshly generated coins, without any history.

They can be used by both good and evil persons. People who deal a lot in the dark net I think they need to use this service of coin mixing for their privacy and security.

This can be also used by criminals to erase their activity logs. This cannot be stopped but mixing services are not responsible for that although they may indirectly help facilitate such thing.

That's right and especially the people is already changing their fiat money into bitcoin is already get an enough of anonymous and by using the mixers is can eliminating the trace and i think the possibilities for using it about the money laundering is so high.

I think yes, but doesn't mean we can blaming the bitcoin mixing services because the intention of bitcoin mixing services are for keep your privacy and there is another reasons why we must mix our coins, can be checked on here https://cryptomixer.io/why.html

One of the points is that Bank of America tried something about six months back and quickly dropped it.  It was over a very limited customer base, but no one was even asked ahead of time.  Their purchases were tracked from the beginning of the day to the end.  Where and when a purchase was made was tracked and if your account was found to be making too many "sin" purchases, the next "sin" purchase was put on hold. 

I think aim of bitcoin mixing services are for stay anonymous and it is good aim in my opinion, but it is can be used for money laundering too the reasons is still anonymous and i think depend on people who use bitcoin mixing services.

It was also the things that come up to my mind because during my observation on some of the coin mixer running right now in the market is that most of its users asking of what kind of coin are much likely anonymous.

It is true that mixers make laundering easier, but this is not a fair argument. Normal Bitcoin users deserve the right to be avoiding traced by the government.
I would go as far to say that most mixer users are probably not involved in illegal activities.
Bitcoin mixers fill the gap between Bitcoin and anonymous currencies which do all that for you.

well, first things first.  i would prefer to start on a machine that i have never accessed any account on...not my email, not facebook, not even netflix....

the problem with mixing is that a finite amount goes in and comes out.  if you are going to hide $50 through a mixer, i would expect to find a $49 TX somewhere down the line and that should be your other end of mixing. 

one thing that keeps them guessing is rented mining to a paper wallet of a new coin.  provided the new coin is not going to die immediately, you can go to an anonymous PC, maybe the library and create a paper wallet for say Doge.  then go home and go to miningrigrentals and use your dirty BTC to rent mining power to a doge pool and payout to that address, but keep the paper wallet untouched, don't even log in to check the balance.  you will lose value doing this, that is why people rent out their rig instead of mining for themselves, but you should get around $45 out of the $50

Now, back to a new anonymous computer(best buy?) and shapeshift the doge into NXT, more lost funds, but not too bad....

create a private asset with your NXT and then send the asset to a new NXT address, from there to software wallet at home and then back to BTC....not clean, not perfect, but $40 out of $50 of pretty clean Crypto.

You can also rent a VPS anonymously and run a tumbling script for yourself.   
or..........get an account on the onion, set up a quick website and service for $50 using a new coinbase or other third party BTC payment processor and buy from yourself then transfer to software wallet

there are countless ways, hell, just sending the $50 through as five tumbled amounts instead of one helps.  making your tumbled transactions common amounts, like 50, 100, 10...
you can automate some of these things, smart contract others......you can even prep a smart contract to fire 1000BTC to fifty addresses once the address balance hits 1000

if you have a specific need, PM me, otherwise, play around and have some fun with it, options galore

Honestly, it is probably used for that purpose most of the time.  But, I see the purpose of coin mixing as a way to take Crypto back to its original way of business.  One of the very points of Crypto is to be anonymous. 

I have always claimed something to that tune myself, that using mixers can be counterproductive and actually decrease your anonymity level. In your post you mention that people who are in need of laundering funds should be doing it themselves. Could you expand in greater detail and depth on the tips and tricks of doing just that? I think many people would be interested in learning about making their coins more anonymous the right way, metaphorically speaking.

sure, it can and is used for laundering, but that is not the only purpose.  also, the more people that join into bitcoin, the more that use these services for more ethical reasons. 

the actual truth is that any one that has a real need to launder funds and knows what they are doing will be doing it themselves and not using services like these.  you are traced and tracked in more ways than just the address and these services likely get more people caught than they protect.  the big case of laundering that got the silk road interrupted was cloaked by some mixing and tumbling, but it was not enough.  the most common secondary tracking method is endpoint amount tracing.  if the FBI knows that i received $10,000 for an illegal activity and that i was likely paid within this calendar week, then they can find the start point, you can even do that.  simply search for TX's of that amount in the date range.  the list will be pretty small and you can narrow it down with a little research

so, they see the original TX and then i throw it into tumbling and mixing.  the FBI software takes 16.38 BTC and prints a pyramid shaped cone, the overall fee for a TX at level 1 for 16.38 is 0.01638.  TX fees are percentage based, so even if that is split between 10 TX's the amount is the same.  the software iterated outward for ten or so TX's, printing the results at each level and you have a simple chart that tells you how much is left from the base number after 1, 2, 3.....numbers of TX's. 

so, you want your funds back in one or two accounts after laundering.  let's say you used a tumbling service, it took in 16.38, went through several accounts and spit out 16 to your other "clean" account.  the fbi software will show that after say "5" TX's the original 16.38 is now 16.2, the software reads like this.

Level 5 TX's      16.2 left after TX fees, 16 after TX fees+common tumbling fee

and there you are,  one of maybe 50 addresses that received 16 BTC one week after the alleged paid crime.  They are watching for that amount and ten other amounts based on the software, plus amounts that are one half and one third those amounts.  it is all on one piece of paper, i have seen it.  you end up as one of maybe 1000 TX's meeting those criteria, but then other software purges a bunch based on other factors, common addresses and such.  that is how Interpol closed that money laundering case and put the silk road in the lime light. 

it is like triangulating position, the first laundered TX and you might be part of ten suspects, once you do it a second time, it is all over.  there are much better ways to attain absolute anonymity and tumbling helps, but it is just one tool in a larger system

My personal opinion is yes.
these mixing service can make things easier for money launder.. because they can easily move their money to any other address anonymously and no one can trace the third address where the btc went out.

but at the other side it have some positive uses also. people use mixing service to be anonymous and safety..

Basically it depends on the person.

Bitcoin itself makes money laundering easier. Say, you have a few million dollars of cash from drug trafficking and you need to conceal the origins of the money obtained in this way as well as transform the proceeds of such an activity into legitimate assets. You start buying bitcoins for cash, for example, using LocalBitcoins userbase. 1M dollars equals roughly around 1,500 bitcoins at the moment, therefore it may take some time and surely is not the most optimal way if you want to make this conversion. Nevertheless, after you convert your dirty dollars into bitcoins, you just sell the latter at some exchange and get clean dollars transfered to your legitimate bank account. You may even want to pay an income tax if you consider yourself a law-abiding citizen of sorts.

Disclaimer: I am neither engaged in nor encourage any such activities

Good question.

If a bank exchanges your cash bills for other cash bills, is that money laundering? Certainly not.

Mixers do not really turn proceeds from a crime into legal-looking profits, like money launderers do. They just exchange fungible units of a currency against other such units. Being a layman, I believe that making money flows untraceable is not automatically money laundering.

But I am pretty sure that authorities would just come up with some twisted argument and file charges against the operators if they could. 

The problem is that a mixing service can be seen as both an money laundering service probably used by criminals but also a service that enables common and honest people to keep their identity protected. I have used it a few times to see hot it works, but will probably never user it again.

First of all. Bitcoin illegal activities and therefore profits from it - compared to standard FIAT are so insignificant that it is not worth any media coverage.
Bitcoin money laundering is highly overhyped by media, hence scale of the problem overestimated by users tainted by that mentality.

In theory there is possible to launder money by mixing but then again, it is possible with any service where you deposit coins, for example: exchange or casino.

Why do we have some many scammers who failed to cover their track?

Mixing failed or they never done it?

Riiight.

I'd bet my life that every single hitman on the dark net is an 11 year old scammer.

Do you accept 5-6 BTC to murder a stranger and potentially spend the rest of your days behind bars. Or do you accept 5-6 BTC, or perhaps half upfront, and, like, not do it?

Golly, that's a poser.

Well some mixing services have 2000 up to 5000 btc which is an amount much higher than any hitman can ask for doing his dirty job.

I am not placing links to such services from the dark net as it's against my moral values, but what I want to say I have seen such services in the deep web asking for 3000 USD prepayment and than 25 up to 5000 USD when they finish the job. It doesn't seem to me that these persons don't need mixing as this value is up to 82 btc the most.

For drug dealers I don't think they use bitcoin in such a massive way yet although I know there are some of them using it.

Bottom line is, mixing services are always useful mainly for privacy but some people like criminals can use them for their dirty intentions.

I think he's pointing about making the life of launders by using mixing services and i would say yes its because if their launderd money will pass on mixer well it can make their stolen money untracable and anonymous and i think many frauds are using that service just to wash their dirty money so they can use it without fear to be trace up and thats the reason why we can't trace those hyip owners who turned scam.

There's always negative and positve, however the mixng service just provide a service in order to protect the anonymity due to the bitcoin transaction itself is pseudonymous, they don't care those money where came from,is money laundering? or something else ? what can i say it's depends on people who use it, but the most important this business will never die, at least bitcoin transaction being anonymous like monero but i think it's impossible.

No.Money laundering involves various channels to hide where the currency gone and is shown different source in accounts.
Bitcoin mixing will make your coins anonymous but it wont change value of your coins once you convert it to fiat hence it will remain accountable

What use would a murderer have for a mixing service? And drug cartels traditionally have a slightly higher turnover than the average mixing service can handle.

It's sensible to cut the link between your coins and their past.

yes and no.

there is always going to be discussion about how people want to keep anonymous to prevent invasion of their privacy and how some small portion of these people are bad people trying to hide some illegal action they have performed using the same system as their cover up!

but this never makes the main purpose of mixing bad. mixing is made to help us improve our privacy and keep anonymous.

That's, it's possible for calling that like laundering service because the purpose for using a mixer for eliminating your trace and I think this service is the reliable service for who wanna for laundering their money.

You all mentioned positive and negatives points so I still dont know what to think.. lol

My opinion was that these services owners were unmoral persons who made profit thanks to criminals, murderers, drug cartels money lauderin wishes..

Do we have proof these services are really used by that type of persons or is that just platforms used by few paranoids geeks or persons who really needs anonymity

Something special about mixing is that there's no guarantee you will get clean coins. Most of the time you'll actually get coins that come from undesirable sources (since some people are getting rid of them).
I view it more as a tool to protect your anonymity and not as a way of getting "clean" coins.

i personally think yes, the main idea of money laundry is get rid of the money track so nobody can find out the source of your money, well in this case the mixer main job is to give the coin new address that difficult to be track, as i can see there are similarities money laundry with mixer job, but mixing coin is not always considered as a bad things, sometimes you need to mix your coin so your address is more secure

they make anonymity possible. that's way more important than money laundering. even if you're doing nothing wrong, sometimes you gotta mix. for instance anyone anywhere who wants to gamble is gonna get shut down if they use coinbase without mixing even if gambling is fine in the country they live in. us law gets everywhere.

Well that is hard to say maybe you can ask yourself first the question is Bitcoin actually money. Also not only coin mixing services but also exchanges could be used. But atleast you can say that a lot of people who use a mixer have to hide something.

I dunno what to thinks about this services.. do they make money laundering easier