Topic: Crackdown on mixers and privacy tools is ineffective: it may even help criminals - page 3. (Read 653 times)

The whole essence of censorships and privacy evasion from the governments isn't about curbing any form of crime whatsoever... That's what they've been using to cover up their tracks and, act like they don't have any personal vendetta against Bitcoin itself.
You see, since every transaction isn't necessarily traceable, they're beginning to tire! The fear that people might HODL so much and that Bitcoin could enrich people in a way that they're richer than the government themselves, which already negates and thwarts their whole effort in fighting against inflation is reallll!!
Secondly, they're just bossy and greedy. Having a feeling that their obnoxious taxes should be extended into the crypto world is the lamest thing they'd ever think of.
This is just their usual sentiment old boy!

I do feel like it is more of a "there is nothing else we can do" move by the governments. First of all not all of these companies are based on USA or any other big nation, so you may want to make it illegal there, but they would just simply go to nations like Panama or whatever and get their legal status and still keep existing without any jail time at all.

Secondly, if governments let these companies be, let mixers do whatever they want, they are giving the criminals what they want. It is like saying "making drugs makes no sense, it just pushes people to buy it illegally" and yeah you are right on that but you have to work really hard to make sure that you could get at least some people away from it and that would make it possible for you to get as much money as you can out of it.

I don't get why they think they can stop it. When has the government managed to stop something that people stood behind? They banned alcohol and people continued to drink. They banned drugs, most teenagers admit to having used drugs at least once. They banned torrents, you can still download whatever you want within minutes from torrent sites like 1337x. China banned bitcoin, now China approved bitcoin ETF... It's all one big comedy. THey made a big deal out of banning Tornado Cash when nobody even used that thing. It was just a PR stunt for the government. They act like they give a shit about our welfare and safety, we act like we give a shit about their laws...

I don't think that swap platforms will be left without supervision either. The SEC has already initiated a lawsuit against Uniswap developers, they will ask for models to stop this kind of exchange
https://www.coindesk.com/consensus-magazine/2024/04/11/the-secs-suit-against-unswap-is-an-opening-attack-against-defi/

It's been clear for a long time that the fight against crime and money laundering is just an excuse for closing down mixers and similar services.

As @findingnemo already wrote, atomic swaps are an exchange technology, not a mixing technology.
However, I think they could even be used on the Bitcoin blockchain alone to mix coins without having to go through an altcoin. I only still haven't seen a "platform" for that.

Basically, an atomic swap connects two sets of 2 transactions by a secret known only to the participants. It's an HTLC, very similar to those used in Lightning. So I technically don't see a problem to build a platform for BTC <-> BTC atomic swaps. However, the factor time may it make more convenient, above all for criminals, to go through some blockchain with lower block intervals, so they can make several transactions there and hide their traces even more.

Atomic swaps have two shortcomings regarding centralized mixers: 1) they can be canceled by one of the parties and 2) they take more time due to the timelocks involved (normally a few hours if Bitcoin is involved, in the case of altcoin-altcoin swaps 15-60 minutes depending on the block times).

So, in the current situation where atomic swaps have low liquidity, it would take a long time to mix especially large quantities of funds, because you must find an exchange partner, then hope that this partner does not cancel, and if he cancels, then do the whole process again. So for large amounts you would take several hours. But: Once you're through, you are almost undetectable (with the exception that your exchange partner heard something about illict origin of your funds, but that is very unlikely, and to be sure you can do one swap more).

Basically it's a virtuous cycle: once the liquidity grows on atomic swaps, more traders will be available, and that not only increases the anonymity set, but also the chance to mix funds fastly. But we're still not there.

It's also not sure if atomic swaps can be made as easy to use as a current centralized mixer. I guess it is technically possible, but current platforms aren't that easy to use.

In general I agree. I don't think that all governments of major countries are totally against Bitcoin, but in many ruling parties there are large anti-crypto movements, and of course these sectors try to convince the governments to use the excuse of crime to tighten regulation further.

Of course it's relatively easy to build a mixer, but if the crackdown deepens, it will become more difficult for them to 1) find a provider for the website, 2) find a domain, 3) advertise the service, 4) take all the legal risk to be online for a couple of months. Of course you could say that these are simply cost factors and they could take higher fees, but that will make decentralized methods with atomic swaps and CoinJoins becoming more attractive.

Criminals are more smarter at this, they cannot be restricted if it comes to doing what they were known best to do, we are not saying this to encourage them for more, but we have to understand the reason why fighting on mixers and privacy will create another hideout for the criminals to use, the fiat currency had not been sanitized already, we still a lot of criminal activities ongoing and yet they think the use of bitcoin which is decentralized is now what they can achieve to regulate, that is impossible, every bitcoiner is not a scam neither do we perform or engage in any illicit financial activities, all we seek is financial freedom and privacy.

It's a very long thread but a helpful one, and I highly agree with you. I believe you're absolutely right, the government's actions against mixers and privacy tools aren't going to stop criminals.

Most of the money laundering is done with fiat instead of Bitcoin, in fact if we study the statistics deeply then most of the crime which is related to money laundering is done by corrupt politicians.

In that sense, it's better to fix the current political system which's full of rugs and money launders than taking actions against privacy tools.

I totally agree. 100%

 This is not about preventing money laundering, that is just an excuse to attack Bitcoin. This is about control of the money.

And you know what is ironic? Fiat is 800X more often used for money laundering and scams^[1]


[1]. Fiat Money Outpaces Bitcoin 800:1 for Money Laundering: Report

This is the solution we all want, unfortunately, many governments are too corrupt to investigate the banks incorporated in their own countries!

It is easier for them to crack down on you and me than on some of their largest businesses (the banks).


+1 (sorry, I have nothing more to add to this part)


I am also noticing a complete lack of interest in regulating data protection, specifically protection of identification documents, which are of the utmost secrecy. Do lawmakers think that showing your ID to an app is like showing it to a bartender?


It is of the utmost importance for those people who are actually living in the USA right now. Because they have the ability to vote out the politicians writing these laws (as many of them are too stubborn to change their opinion).

what if i told you governments are not cracking down on mixers due to a big 100% concentration on criminals

what if i told you its also:
a crackdown on unlicenced money services
a crackdown on money services that dont report highly suspicious transactions
a crackdown on services that dont follow regulations/rules

because if they let certain amount of money businesses operate unpunished without paying the licence and costs of following the rules.. other legit businesses will stop paying the bill and stop following the rules

notice how the main guy of the NY Bitlicence established the rules for NY businesses to legally operate in NY, then when the rules were set, he then jumped over to establish a consultation business charging businesses money to set themselves up within the rules

many regulators are no in it for the good will of its citizens. they simply want to set up barriers of entry of market competition of businesses and then charge those that can afford it to then operate in the rules. so when other businesses flout the rules they need to be stopped

yes there is an emphasis on mixing causes criminals to have a tool. but even with that there is a element of the MSB compliance side to it.

in short, if they cannot enforce the barrier of entry to their licence scheme.. the licence becomes meaningless

The existence of Bitcoin have already kept you away from the Banks and centralized authorities, For many Bitcoin is their private bank, this is why I don't see the reason why people are using mixers.

You can say that privacy is important, but how can you be sure that all in the name of privacy some people aren't preparing to attack other innocent people? Privacy here and there was how some people are digging holes into the ground in a community to find precious stones and everyone kept minding their business until a bomb went off and many people paid for it with their lives.

I don't think for myself alone, I have also put myself in others shoes to understand even more, it is selfishness to say that you want privacy for yourself and not care about those who will use this as an excuse to run fundings for weapons of mass destruction.

It helps to a certain point, I said this because doing nothing at all is even worse, with rules and law in thr world today crime still happens here and there, but think about a world with rules and law? It will be disastrous.

Most criminals don't even understand how to stay privacy 100% and we don't have to enlighten them, let them make mistakes so that they cab be caught, I want them gone because they are the reasons why crypto is been badmouthed by many.



You are talking as if you are encouraging crimes, all criminals should start using atomic swaps instead of centralized BTC mixers? Is that a good thing  to you? If I am a leader of a country I will definitely not want this to happen, many people like judging because they think of one side only, if you are in a sit where you need to keep your people safe you won't want privacy.

Gov don't understand what they are doing, they are trying to implement traditional tools to untraditional market

Do you really think that the majority of governments want to lower the crime rate? Definitely no, they don't. It's all just a shitshow. Government itself is a criminal organization because absolutely each of them are very corrupted and mostly care to make themselves rich via different mechanisms.
They don't believe that these crackdowns will help against money laundering because the main money laundering entities are alive, for example JPMorgan Chase, HSBC, Standard Chartered, Deutsche Bank and the list goes on.

As I mentioned previously, what they are doing now will push  towards decentralized solutions or using Monero. codes are already available, and what is missing is liquidity. This liquidity is available to those who want to mix funds, and instead of creating mixers, the number of nonkyc exchanges will increase, and with low fees of less than 5%, they will be able to mix their bitcoin.

I was expected things like wasabi coinjoin to continue as they might get cooperation with authorities.

One solution I can suggest to the government based on the issue of money laundering which is promoting the crackdown on mixrs and privacy tools is that, they should start by first placing a ban on the learning and practice of coding, computer programmers should be banned, all website developers should be banned and pushed out from the society so that there won't be any case of money laundering seeing there aren't coders or developers creating privacy tools and writing programs that conceal these undetectable transactions.

Regulation won't do much obviously because new names of sites and tools that would help hide funds exist and more would be created without prior notice of the public or the government and the game would keep playing because the rich has money and can afford to hire their own programmers and coders to write programs that even the FBI software for detection of money laundering would be ineffective against.

It is the same people that are using fiat for money laundering that are still using mixers for money laundering, and this is why it will be very difficult for all the mixers to be banned because they are own by world class business men that can never get broke due to the way they get their funds.

This is a fight that they government will keep in fighting because they can never win because it is in the physical world that this illicit activities is done with fiat before it is used to buy bitcoin and vice versa. Those people that uses mixers for illicit activities are still some top governments officials friends or business partners, so let the government trace and get them through their actions in public and not putting all the blame on mixers due to their own weakness.

It is easier and more convenient for users than Atomic swap that requires knowledge on hash and programming
Besides many were used to using mixers before adaptor signatures were introduced to Atomic swap. So it's not quite easy to leave a product that is working well for you and move to previously own product with certain flaws that has been improved.
Without the use of privacy coin or schnorr signature Atomic swapcan be easily tracked because the major coins it's centered on are public ledger Bitcoin and litecoin.
About Government banning Centralized mixer,  I think they trying to make a statement that no matter what they in charge.
Sure they can but only the smart ones and we all know they usually the ones moving the highest amount of funds.
I don't think Atomic swap allows crypto to Fiat or Fiat to crypto.
Is funny how the government are so fixated in transactions that are some how private but neglect the laundering under their nose
That can be found out easily with good accounting.
Frauds, Terrorism and money laundering has been existing and been funded before the advent of cryptocurrency under their nose and they neglecting the old and attacking a kid.
How mature.

It may not be the most effective however it still does something to the community.

First of all it demotivates the community from participating with such privacy projects or even just crypto in general. It might make them wary as they do not want to be perceived as a criminal. It also strengthens the idea of the general public that crypto is used solely for illegal activities.

Even if it does not completely erase all privacy projects, it decreases the methods used by those attempting to do illegal business using crypto.

Not only the above mentioned thing by OP, which is already very well written, but one more thing is, when they close one mixer there is already a new one in the pipeline.
I mean what stops people from creating new sites and offer this service all over again and again and again.

It obviously is a profitable business and where money is to be made there are always people taking this opportunity. We all know the demand for mixers is still there and will most likely never go down. It will go up over time since crypto us become more and more popular, especially with scammers of course, but obviously also and much more in general.

Supply and demand, as usual. It's so easy to operate a site like this, what would stop people to create new ones once others have been shut down. I don't think they fear the FBI or other organisations that taking a stand against them.