Topic: can't mixed cons be deposited into a centralized exchange (Read 259 times)

Wait, does Binance P2P work like that? Am I able to make an offer, ask my p2p partner to send me his Bitcoin address, send BTC, mark it as paid and our deal is done? I haven't seen that option on Binance, when I was making p2p trades, I had Bitcoin on my Binance's balance, the user was paying me and I was transferring my Bitcoins on Binance to his profile.

Yes, it has many flaws. What if I want to exchange my LTC to BTC with someone else and ask that person to deposit BTC to my exchange address and then somehow it appears that this person has mixed coins? I'll be in trouble for no real reason and that's very stupid.

I just want to point out that all that is correct. Including the second to last line, mostly.

There are risks with using mixers and other anonymity services, but that doesn't mean that you shouldn't use them, especially if you have directly received suspicious coins from somebody else unknowingly. You (specifically) could say it is the lesser of two evils, with the alternative being, even though it is rare, to use coins tainted by government executive orders and that kind of stuff. Which have an even higher AML score than mixed coins and will almost certainly get you into big trouble.

And then just never use Centralized Exchanges again.  Or use them by depositing small batches of Monero instead of the chunks of Bitcoin you receive.  From my own experience, I had much fewer problems using Monero than depositing Bitcoin UTXOs I received from Peer to Peer trades.

How likely is it to receive a UTXO with a history of Mixers from a Centralized Exchange withdrawal versus how likely is it to receive one from a Peer to Peer Exchange?  I believe using Peer to Peer puts you at a much higher risk of having your Coins seized by the Exchange simply because a Peer to Peer user would probably use Mixers or Coin Join too, so to the Exchange your UTXO is now 'dirty'.

So once you go that route.  Just do not use Centralized Exchanges any more if you do not want your UTXO to be flagged and inspected in detail by the Exchange.

there are thresholds of suspicion when coins are deposited, not all coins are treated the same and not all uses are treated the same
people shouting "fungible" have no clue how the real world works and just posture their own dream scenario as reality to make themselves feel better hoping that all coins are treated the same to argue that their dirty coins are fine.. when they are not

EG
if someone mined fresh coins and put them into a mixer because they were chinese and didnt want to have their income linked(not a crime in US) (think of any other non crime reason)
and someone from the US received those mined coins. which was only say 10% of their other stash not mixed. and their entire stash went to a exchange.. nothing bad would happen in regards to authorities seizing funds. you wont in some cases even get banned from using a cex in some cases*, because the threshold would be super low

however if you received coins via a mixer that was originally from someone related to a real crime (drugs, illicit porn, hacks, scams) and it was a significant chunk of your stash. your threshold would be higher and it would trigger an investigation which could, depending on the level lead to two options
A. the exchange stops offering you its internal services(placing market orders) and asks you to withdraw your coin and then ban you from using that service
B. says nothing but reports to regulators and regulators then respond with court order to seize funds and you find out via the authorities

option B is usually what happens after several deposits, whereby they all have the same high rating of illicit origin history, meaning its not just a random fluke that one time you had something related to criminal proceeds

..
*those people promoting mixers as harmless dont tell you that by using a mixer it does put a few ratings higher number on your deposits suspicious ratings
some exchanges just dont want any headache/workload of having to investigate or pay analyst services just for a mixing trigger so will just do an option A

No they don’t take action on all transactions coming from a mixer, there are some certain transactions they actually do take action on, the scheme they use for this, is what I don’t know.

If you send a coin from a mixer directly to centralized exchanges there is no anonymity there. If you send to a decentralized exchange then I don’t think there is a way that the government can trace that to you since there is no KYC attached. There is even nothing like a tainted coin in my opinion just the address it’s coming from that’s marked as tainted.

If you wish to send coins from a mixer to centralized exchanges just go through another address you don’t use and then back to the exchange

Is there at least one known case where the exchange returned coins (and did not confiscate them) because they did not pass the AML check?

I've never used this option, but is there really no check here?

It is not possible to know that the coins come from the mixers, but it is possible to trace the distinctive fingerprint, which either

• Fixed withdrawals, as happens in coinJoin or was happening in chipmixer.
• Large transactions where the transaction contains several inputs and outputs.

Some blenders do not have this fingerprint, so it is difficult to determine if the deposits come from mixers, so all they do is trace the two fingerprints above.

If you want to deposit to CEX, send it to a new address that you have not used before, and they will not be able to know that you used a mixer.

P2P buyers/sellers don't care about the history of your coins until they want to send their coins to exchangers and then the centralized exchangers will block/lock their accounts. But that won’t be your problem anymore, right? It seems to me that this is not a solution to the problem itself, but shifting responsibility onto others. The funny thing (or not?) is that you, too, may find yourself in the place of that poor fellow (they will send you tagged coins from the mixer) and without knowing it you will lose (you may lose) money in a banned account of an exchange or other currency exchange service. Bestchange (as an aggregator of exchangers) has also become more attentive to incoming coins recently and provides the opportunity to check AML (aml and amlmarks), where mixers are also among the potential methods of money laundering.

You can perform mixing no matter where your bitcoin has been to or has been used for. It’s usually centralized exchanges who are wary of where you coins came from and would most likely ask you to verify your account and do lots of complicated things.

Mixers nowadays have a really bad image so it would be best to steer away from it.

There are 21 million bitcoins ever exist and those coins can be circulated on the market. Very old bitcoins from Satoshi Nakamoto era can still be used today and coins can be used as inputs, outputs for anonymity sets in mixing process. After that, outputs will be tainted by chain analysis and centralized exchanges that are strongly against mixed coins. Because centralized exchanges have to obey laws, AML, and what happened with Binance, Kucoin recent months are big red flags for centralized exchanges to be stricter against their customer deposits.

You can understand more about tainted coins with this video.

Bitcoin Q&A: Blacklists, Taint, and Wallet Fingerprinting

If you have questions, you can ask him on X, and ask him to update more information about this issue with recent serious changes in regulations in the USA. and globally.

Even in a verified account, exchanges will still raise awareness if they ever detect something; they just don't go about attacking accounts with mixed coins deposited in their accounts unless those exchanges frown upon that from the beginning.
 
If not, they can only trigger an investigation on the user account if they ever have trace of any tinted coin or if the address sent directly to the exchange account is under investigation.
 
Just like in the case of SB, most of the signature participants who use Binance to receive their payment were asked to fill out some query form about their relationship with that address after the authorities put it under watch.

As we have often heard in this forum that don't keep funds in exchange and neither transfer huge amount to exchange because most of us use centralized exchanges who have to follow the protocols set up by law of the land they operates wherein they can freeze your account for reason like recieving funds through mixers as this is something government is behind because they consider it as money laundering.

Exchanges have become more strict in recent times due to different governments trying to get a hold of scammers and criminals that used bitcoins to aid their activities. Before, exchanges could care less on where your money came from. However, since a lot of pressure is pressed on to exchanges due to their susceptibility to receive illicit funds and facilitate trades using their platform, they don't have any other choice but to freeze tainted coins that they receive and notify the authorities when it happen.

They don't necessarily have the power to block transactions. They simply run some analysis on the coins they receive and check if it's 'dirty'. If it is, they freeze the funds, forward whatever information they have to the authorities, and that's it. Mixers don't really care what coins their end users receive. For them, once a mixing service is done, they've done their part of the deal, regardless if the one who requested the mixing received coins that are tainted by illegal activities.

No, exchanges are just using some software that is altering them and giving warning about risks if some bitcoin address was connected with reportedly stolen coins.
I think this is all very stupid, it has so many flaws because at some point everyone can have some contact with coins like this.
Someone recently reported that BlackRock wallet (valued more than $17 Billion) is now tagged for using Tornado cash  

This is not entirely true. Exchanges that limit transactions from mixers will filter deposits regardless of the amount being sent, you run a risk be sending mixed coins there and more risk if you leave them there. Even exhcnages who do not have direct limitations can at any point change their policies and lock your funds.

It will totally depend on the exchange and how strict they are with checking the coins' origins.

Generally though, if you don't want your centralized exchange account to be blocked/locked, just don't. Just sell the coins through peer-to-peer (Binance P2P, etc) as P2P buyers/sellers generally don't care about your coins' history.

I do not think that they take action on all coins that passes through a mixer. Do they?

While some people may use Mixers to cover up their illegal activities, I like to think that there are others who use mixers more because want to the anonymity in every sense of the word and not because they are doing something shady. Secondly, I do not support tainted coins passing through mixers but then isn't it dumb that after using the mixers they go ahead to send it to an exchange? Why not send it to a decentralized exchange. Or will the government be able to trace it and flag it and then they lose their coins if they do?

Why do the government or even exchanges take actions on the mixer coins, because the are involved in a large volume, this alone is one of the reasons why they take closer attention on the coin and try to make a trace to see where its coming from, mixers don't make a trace on whatever amount of coin sent for them to mix, while exchanges can do that when there is a suspicious alert in which caught the attention of their AML policy, most people that mixed coins don't even directly send them to exchanges, they would have prefer the use of a non custodial wallet in case the amount involved is much.

On top of what OmegaStarScream mentioned, exchanges may not detect the origin of funds is coming from a mixer instantly, they will freeze accounts if government authorities flag an address belongs to mixers and it has been found in any case related to money laundering then your exchange account will be put on hold probably forever.

In addition to what above user said, you can transfer your mixed coins to centralized exchange, it's not like your wallet will give you error messages and warning that you can't send to centralized exchange. But, the exchange might ask you to verify your account, after you complete it, the exchange either allow you to use their service, confiscate your coins or return back the coins to your address.

That's not what the member meant. It's the exchange that try find the origin of the funds, not the mixers. Mixers don't really care.

Exchanges do that because they have rules and regulations they must adhere to. ChainAnalysis's KYT (Know your transaction) is something a lot of exchange use for that purpose: https://www.chainalysis.com/solution/crypto-risk/

This helps exchanges block transactions from darknet markets, exchange hacks (a hacker hacking an exchange, and then sending the funds to another one) etc.

Hello

in a thread with an other subject, a person pasted the follwing statement:



Why is that the case? Does a mixer try to follow the entire way of Bitcoin funds, and if the "path" is intransparent,
mixing is not performed?