Topic: Is ChipMixer a probable HoneyPot? (Read 768 times)

And if my short stint here, Chipmixer was born when Bitmixer decided to shut down it's business because the owner is afraid that something like this is going to happen. So Chipmixer, was the result, it has evolved and it did run from 2017 up to 2023, so their business model might have improved though to be able to run that long because the authorities caught up with the so called owner. We will just have to wait, maybe in months or years, a new model will emerge and become the next big thing in tumbler or mixing services.

Perhaps there won't be other attempts and that this latest seizure puts people off.  But equally, such ideas may just be driven underground, increasing their resilience and evolving for the better.  All it takes is an enterprising individual spotting a gap in the market which they could potentially serve. 

The authorities have won some battles, but not necessarily the war.

There won't be a second bitmixer never ever never again. I wish there would but... I know it is not going to happen. It was like a very good dream when it was happening. You know how good dreams end. They end way too fast. Just like directbet.eu.

There are people out there that can't stand other people having good things so they have the urge to destroy anything beautiful.

Bitmixer was beautiful. Directbet.eu was beautiful. btc-e was beautiful. Now they are all dead.

DEAD

DEAD

DEAD

Well there was a lot of data recovered by the FBI, so who knows what CM will eventually effectively be.

Yeah, with all the speculations in this thread and probably there are more out there who thinks the CM is a honeypot with all those conspiracy theories and what's not, and in the last 24 hours, we've got the answers.

And with this shake-up, I don't know, maybe there will be a new mixing services that will come along.

Just like Bitmixer.io->Bestmixer.io->Chipmixer.io

I suppose with today's news, we can rule this theory out then? Unless they got tired and needed some funds to shore up some broken banks over the pond... tough news for a lot of people involved.

First alerted on the service thread: https://bitcointalksearch.org/topic/m.61917122

Regarding the topic: maybe they are, maybe they are not. It will be impossible to know with any certainty in the near term, and probably for ever.

If CM is an intelligence honeypot, unless you are involved in something very bad, your privacy is likely as secure as their mixing methods. Regardless, I suspect others will employ similar ways to mix coin in the future that will make it difficult to trace the flow of mixed coin

I don't know if they shut down the site or if it closed on its own. You can read about the specific actions taken here:

https://home.treasury.gov/news/press-releases/jy0768
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220506


It appears there were no individuals named or arrests made in connection to blender.io.


Just FYI the link in your feedback for blenderio is about the hacking of another mixing service, Blender Wallet, not blender.io.

I don't know exactly how long encrypted ANOM phones existed but I think it was much longer than examples you mentioned.
Wikipedia article claims that initial device distribution was in October 2018, and they revealed themselves as Operation Trojan Shield or Operation Ironside three years later in 2021.
This is not cryptocurrency related, but it is related to privacy, and I think there could be more examples like this.
https://en.wikipedia.org/wiki/ANOM

PS
There was a seizure of cryptocurrencies (along other things) from people who used ANOM phones.

Depends on how much money they're willing to lose, and what kind of privacy they're looking for. XMR <-> BTC conversion is more expensive (without counting the possible changes in the exchange rate). If you want to just hide yourself from a bunch of forum users who'll have a good time on looking up on your footprints, then a mixer is a enough. If you're going to launder a billion dollars, then the required trust raises some serious concern.

So, did they just shut down the site? They didn't arrest the owner, did they?

Of course he shouldn't (for making Tornado Cash). The fact that we have a gazillion of crazy laws should further highlight the importance of Internet privacy, though.

That's not what I was inferring. It's just a curious observation.


You do have the freedom to choose either option -- nobody said you didn't.

I'm saying people exceptionally concerned about blockchain privacy should consider using Monero, or at least passing their BTC funds through it to break blockchain links instead of mixers. This can be done in a few different ways. Of course the privacy can always be undone by the future actions of its users, just as it can for users of ChipMixer or any other mixer.


This has nothing to do with it. First of all, they never identified the owner of Blender.io. They've sanctioned lots of anonymous entities in the past, including most of (what they know about) the Lazarus Group. Furthermore, the creator of Tornado Cash didn't necessarily think or know he was doing anything illegal when he created it. He shouldn't be in jail IMO.

Not all accept Monero, and it doesn't come with no other tradeoffs. Plus, I don't find one reason why users shouldn't have the freedom to choose either of these two options.

Maybe both Blender.io and Tornado Cash were sanctioned because the developers hadn't taken the proper measures regarding their traceability. I read that Tornado Cash developer, Alexey Pertsev, was arrested. To be arrested, I understand that he hadn't been working on TC very privately. The person who runs ChipMixer is entirely unknown as far as anyone can tell.

You make it sound as if private businesses are not wealthy enough to fund a startup product like ChipMixer.    How many projects have started with a small budget and aggressively marketed their site and now they are fully funded and making huge profits.

Also, if it was a HoneyPot... would it not have used that information that they received via this site on some of the large cases? (The thing is.... once you are in court, you have to divulge the source of your evidence ....so a resource like this, will fold after the first court case) 

BitMixer had only 1 owner..... and he/she bailed when things got heated.

The length of time they've been in operation is irrelevant. Bitcoin Fog was around for a decade before they arrested somebody who was involved with the service.

Also, being involved in famous hacking incidents isn't enough to conclude anything. Nobody's been involved in more high profile incidents than Wasabi (Plus Token ponzi, Twitter hack, Bitfinex hack, Kucoin hack, Chinese spies, etc.) yet their developers, who aren't even anonymous, can walk around freely.

There is a myriad of reasons why some services are targeted but not others but until there is credible evidence these honeypot accusations are simply unfounded.

They are honest and reputable mixer existing over 5 years which mean it must be honeypot?
New mixer is much better because gov would never create new mixer?

Hansa Market (darknet drug marketplace) was honeypot for 1 month https://www.dw.com/en/alphabay-and-hansa-darknet-markets-shut-down-after-international-police-operation/a-39776885
Playpen (darknet child pornography network) was honeypot for 16 days https://www.vice.com/en/article/jpgm7d/how-the-fbi-identified-suspects-behind-the-dark-webs-largest-child-porn-site-playpen

Does anyone have example of long term gov honeypot? Cloudflare and Facebook does not count as nobody asks "why they have not been sanctioned after over 5 years".

The problem with conspiracy theories is that they are so convincing such that you would discard the truth for anything, why do I have this feeling that the person that came up with this is trying to use the wisdom of the masses to get information on some of these entities, better yet he/she could be a hired shill trying to get the biggest tumbler in the business out of the way and along came a new mixer business 101....but sadly any kind of news good or bad is considered as marketing.

I would vote "maybe" if that was an option.

If ChipMixer were explicitly illegal then that would be entrapment, so I'm actually leaning toward "no, they're not." (maybe that doesn't apply in certain circumstances, not certain)

I'm also a big fan of proof before jumping to conclusions when it comes to such "what if" conspiracies.

However, the fact that they haven't been sanctioned after over 5 years in business is puzzling, especially after laundering money for North Korea and several other famous hacking incidents.

For example, both Blender.io and Tornado Cash were sanctioned specifically because Lazarus Group used them to launder Ronin Bridge hack money. Lazarus also sent some of those funds to ChipMixer -- so why did they evade sanctions?

https://www.reuters.com/business/us-adds-virtual-currency-mixer-sanctions-list-over-north-koreas-cyber-activities-2022-05-06/
https://cryptoslate.com/ronin-bridge-hackers-used-chipmixer-to-launder-over-73m-of-stolen-funds/

Its indeed a curiosity.


People who are exceptionally concerned about this should just use Monero.

One way to make sure ChipMixer can't know all your data, is by exchanging vouchers with other users. This could even be a viable business model for some highly trusted individual: sell ChipMixer vouchers at a markup, and you're absolutely sure ChipMixer can't link your deposit to your withdrawal. Of course, some would say this service is a Honeypot too, which brings us back to square one.

Another solution would be if ChipMixer starts using Blinded Bearer Certificates. Even after reading about it several times, I still don't understand the details, but in theory, with Blinded Bearer Certificates, even ChipMixer wouldn't know who spends which outputs. There's no point in speculating about being a Honeypot, if the service for sure can't know anything about it's users.

I'm all for discussions, and try to maintain some semblance of objectivity, but as you can see, am myself wearing the signature, so that's my disclaimer out of the way.

Among all the entities likely to put up a honeypot, US government's ineptitude seems to take them out of the list of would-bes. The fact they waste millions (other governments do the same too) of public dollars to pay for semi-expert companies (Chainalysis, several years back, had an ex-employee whistleblow on their extremely poor understanding of blockchain and near-complete ineptitude at blockchain forensices, despite claiming they could and accepting huge contracts for saying they could) tells me they really aren't as sophisticated as we like to give them credit for.

I do agree with one point: don't rely on one service, especially because it itsn't trustless. CM's a great service, but use any and all available privacy tools to protect yourself.

A theme from X-files fascinated me as a teen: deceive, inveigle and obfuscate. That was what the US government supposedly was all about, and it had negative connotations, but I saw it positively. In the way we should all conduct ourselves: to deceive would-be attackers, to obfuscate our footprint, to flatter our rulers to accept us.

We did buy some ads on forum when it was allowed. It is not allowed after ICOs started buying ads. They were paying few BTC per spot and they were not honeypots just scam.
https://bitcointalksearch.org/topic/advertise-on-this-forum-round-250-4687063

ChipMixer is gov honey pot because they never used CloudFlare which is called greatest Man-In-The-Middle Attack?

Indeed. Also, I think, any coin-join implementation is not good for high volume mixing. I think, choice of mixing method should be something like the following...


If MixingAmont < 1 BTC
  use some CoinJoin wallet

If 10 BTC > MixingAmont > 1 BTC
  use XMR on some non-KYC exchange

If 100 BTC > MixingAmont > 10 BTC
  use centralized mixing service

If MixingAmont > 100 BTC
  split it into multiple i/p below 100 BTC before mixing and use any of the methods above as per MixingAmont

So you would rather encourage people to use a service that is willingly embracing blacklists and demonstrably in bed with blockchain analysis firms over one you simply have an unproven theory about? 

I guess if you have any doubts about whether your tinfoil hat is working, you could just dunk your head in molten lead.   

What has been discussed in many locations is the fact that CM is a free service. You can tip or send non round amounts to hide things but in the end they do not charge a fee so it's a more difficult case to make that they were profiting from it. Which does make a difference if you want to go after them.

Also, due to the nature of the way they do business, with the pre made outputs, even if they do get taken down, if they don't keep a lot funds on that server (and they should not) they could be up and running again in a few minutes. Their main BTC node that has the addresses / private keys can be sitting anywhere in the world and the private keys of the pre-done work can also be anywhere. It's a lot of work to do the programming the 1st time. After that it's not that tough.

Unlike a lot of the other services that were a for profit enterprise because they charged up front and were public about who they were and everything else.

-Dave

It'd better be, otherwise criminals can getaway with their crimes. If it's not, that could mean one thing, they can track the transactions so no need to crack it down.

Your perspective/observation and their signature data statistics are contracting.
It's obvious they are well financed to back their signature campaign ever since they have started. Especially when they start paying by usd rate instead btc fixed for several years. 

About their source of funds, there is no proof of them having other business aside from the mixer so probably its their only source.
About the number of users using mixers, it's not all about the number of users. The larger the number to mix also affect the donation/fee they can collect.

I think you're mistaken. If I remember correctly, BitMixer used to process hundreds of thousands of Bitcoins per year. With ChipMixer, you can count chips to get a pretty good idea of how many people use it.
Privacy is a very big thing (as it should be)!

First of all, I will like to state that I am in generality of the entire discussion neutral in all of the assumptions and conclusions of the OP on what ChipMixer is and is not..

However, the part I could above is the part I've always wondered about, ChipMixer is running the highest paying signature campaign this forum and also the longest running if I am not mistaken, I have always wondered to myself what or where their source of revenue is from, from my personal perspective or observations, not many people use mixing services, and even if there are many who do, can the fees generated from transactions cover the weekly payments of the signature campaigns and for such a long period of time?, this has always been my thought but then..

Whether they be probable honeypot of the CIA or which ever part of the government, it is non of my business, I will use ChipMixer services when I find a need to, so long I am not a criminal and having nothing to hide.

Tech entrepreneurs that don't run mixers and open-source projects, probably? Because stuff such as ChipMixer, Bitcoin Core, Electrum, Linux etc. are funded voluntarily, and are working years against all odds.

Does that imply they're the feds, though? Here's a better guess: the individual behind ChipMixer owns loads of bitcoin and can't have enough privacy otherwise. Think about it for a moment. If you had about 10,000 BTC, which you couldn't hide on-chain alone, what would be better than setting up a mixer and have yourself obfuscated among other coins, owned by other individuals with the same goal?

Edit: how did tens of hundreds of bitcoin came up? From their signature campaign, they have paid less than 1,000 BTC over all.

Whether ChipMixer is working with governments or funded by governments, end result would be same. Mixing data would not be secured with ChipMixer. No?

Chainalysis can't be funded by governments because it already had 6 funding rounds with millions of dollars each, and a load of investors willing to throw money at it. Your theory doesn't add up.

Working with governments =/= getting funded by them, unless they awarded them a forensics contract.

After being part of the discussion on CM topic, discussion even FatManTerra have contributed, you still decided to open a new topic and spread your.. let's be kind and only call it useless drama.
And you want our input.

My conclusion would be that maybe you are part of a government agency and you're trying hard, maybe even with multiple accounts and on multiple channels, to discredit ChipMixer.
What you say about that?

That response from ChipMixer means nothing. It's definitely not being run from a government office with a ChipMixer signboard. It is more likely being run by Chainalysis and being funded by Governments.


It does not need to be US specific. It can be more like Pegasus Spyware, which can be used by any government against payment.


Call it speculation, but the author has definitely raised some compelling points that is raising doubt. Also, if I remember correctly, ChipMixer clearnet hosting IP was outed in public, as they never used CloudFlare for cover. So, government could stop it's operation on clearnet pretty easily. Hence, they can't stop in any other way is not a correct statement IMHO.

Why the US government, and not some other country?

Speculating won't matter, what if the speculation is meant to spread doubt on a service they can't stop in any other way?

Maybe they run a model that guarantees anonymity/privacy for innocent mixers... And this is good Bitcoin ideal I cherish a lot. A moment of truth will come and when it does come nothing in this world or below can escape it, even if it's far greater than America's CIA.



The other mixer crossed a red line and was punished!

I belive the following is the best reason to believe it is an unfounded conspiracy,

@Bill Gates, how about searching the forum first, so if this topic doesn't already exist, open it in a more appropriate board? A discussion about this theory already exists in the CM thread -> https://bitcointalksearch.org/topic/m.61349315

This, for one, is factually wrong. ChipMixer could never buy an ad space on forum, as theymos never sold forum ad space to centralized mixers .

Lately, I have come across a twitter thread that claims 'popular Bitcoin mixer ChipMixer is actually a United States government honeypot'. I think, he has made some compelling statements in his thread. I am copy-pasting the content verbatim. Let us know, what you think...

1. Today, I'm sharing my long-standing theory behind a US government covert operation designed to partially crack Bitcoin privacy and deanonymize transactions. I believe that popular Bitcoin mixer ChipMixer is actually a United States government honeypot. Here's why.

2. I saw this tweet the other day, and a few projects that I've been observing came to mind. But ChipMixer is one I'm absolutely sure about, as it was created when the government was newer to crypto, so they didn't obfuscate the telltale signs of a honeypot very well...



3. The US government goes to great lengths to have access to flows of online information. This includes the ability to access history and private conversations on most social media platforms. For example, their warrantless internet surveillance rooms: https://en.wikipedia.org/wiki/Room_641A

4. Cryptocurrency usage surged in 2016 and 2017. Smart governments noticed that anonymous cryptocurrencies would eventually allow criminals to move around large amounts of money in a manner that renders capital controls worthless. I believe this is when the US formulated this move.

5. In May of 2017, ChipMixer was released by a brand new anonymous account on the Bitcoin Talk forum. It quickly rose to prominence, offering mixing via fungible outputs, large reserves, a smooth UX, clearnet access, and true anonymity (when it came to external analysis).

6. Interestingly, ChipMixer released with a "pay what you want" model, which is uncommon for mixers. Users were not charged a mandatory fee for mixing and instead could donate to the website. As any tech entrepreneur will tell you, donations are usually not a viable business model.

7. The story starts getting suspicious when you look at ChipMixer's expenditure. With zero revenue, ChipMixer paid out several large alpha tester bounties, bought ad space on the forum, and ran a large signature campaign, with expenses in the tens or hundreds of bitcoins.

8. After looking at ChipMixer's history, it's clear to me that they are being bankrolled by an extremely wealthy entity who doesn't care about profitability and has a lot of money to burn on making the service popular - millions spent, but revenue coming solely from small donations.

9. Running a centralized Bitcoin mixer is extremely illegal, and the risk/reward doesn't check out if you don't care about making profits. UHNW individuals will all tell you that committing loss-making crimes for the sake of altruism isn't ever worth the risk of jail time.

10. $10m is a lot of money for most, but for the CIA or the NSA, it's a rounding error. As a government, how much would you pay to potentially get access to the underbelly of an anonymous, decentralized payments network sometimes used by criminals to launder massive amounts of money?

11. In crypto, there are better mixing methods out there, such as CoinJoins or zero-knowledge proofs. The most popular zero-knowledge mixing protocol was Tornado Cash. Tornado Cash gave users complete obfuscation & anonymity - even from the operator of the service.

12. Earlier this year, the US government cracked down on Tornado Cash, adding it to the OFAC sanctions list. I suspect this is because they felt highly threatened by the advent of true anonymity, which Tornado Cash provided. There is no data to subpoena from an open source protocol.

13. On the other hand, even though ChipMixer provides external anonymity, there is one big difference. The operator of ChipMixer has complete access to every transaction - deanonymized! Despite privacy tech's availability, ChipMixer still runs a model where the owner has god mode.

14. ChipMixer has been used by several high-profile criminals, such as the Ronin bridge hackers (from North Korea!) & the Binance hackers. Some have even been identified and caught after using it, such as the Twitter hackers. It's no joke and is affiliated with serious crime groups.

15. Many large mixers have shut down due to legal action or unprofitability. Tornado Cash has been sanctioned, and their developers have been unfairly demonized. Yet - ChipMixer is running normally (on the clearnet, at that!) and no regulatory action has been taken whatsoever.

16. So, why attack Tornado Cash and other mixers and leave ChipMixer alone despite both being used by similar groups? I think the answer is clear - ChipMixer is the US government's ace in the hole. A secret weapon that nobody knows about and can be used when necessary.

17. This is a covert operation, so there will be no open admission or provable link, but based on the reasoning above, as well as private conversations I've had with Bitcoin OGs, it is clear to me that ChipMixer is a honeypot owned by a major world government, most likely the US.

18. While I obviously support criminals going to jail, I also think optional anonymity is important and would prefer to have less covert privacy-breaking efforts out in the wild rather than more. For those interested in alternatives, check out CoinJoin tools like Wasabi Wallet.

19. I hope you enjoyed reading my theory. It's been on my mind for a while and I find the topic fascinating. I would love to hear thoughts and opinions on this, especially from Bitcoin OGs, so drop your comments below if you can! Thank you.


Source: https://twitter.com/FatManTerra/status/1595500815116079111 (archive)