Topic: Mixers under the threat? - page 2. (Read 559 times)

Your mistake here is expecting the US government to be consistent. They will apply whichever rule(s) benefit(s) them most at the time. Consistency or even obeying the law is irrelevant.

This is possible, but there are significant additional risks over using an established mixer. Either or both exchanges could freeze your accounts and demand KYC at any time, meaning you either lose your coins or you make your privacy significantly worse. Exchanges share records with each other, share records with blockchain analysis companies or even employ blockchain analysis companies, and share records with governments and associated agencies. Exchanges look backwards from deposits and forwards from withdrawals for several transaction to track where money has come from and where it is going.

Holy shit, I don't know what to say about this kind of thing, they are really hypocritical in terms of enforcement of the law, I really wanted to side with the law against mixers/tumblers but this news even though a speculation made me change teams real quick.

Your way of using exchanges is good but exchanges reserve the right to ask for identification documents, mixers don't ask. I've heard about mixers that scammed so it's all about doing proper research to find trustworthy exchanges or mixers. If more mixer owners are arrested on suspicion of criminal activities it's going to get very interesting.

Not sure if it was discussed anywhere on bitcointalk but it's easy for an outsider to deduce that they're doing it with all the source of funds questions that are popular in conjunction with the proliferation of blockchain analysis services being used by so-called VASPs. Even Binance has been using them for couple years now.

To a point yes, but there is still a record of you talking to an exchange somewhere for the 1st transaction. If the VPN provider ever gave up their records then it's a small & unprovable data point but you can see someone talking to exchange "X" on this VPN from this persons location and then some coins moved to that exchange.

If you pay for your coffee and bagel in cash, except for some GPS records in your car / phone there is no proof you went to the bagel shop for breakfast and used their Wi-Fi



Never heard of that. Guess that is why XMR and other privacy coins can be handy. Any discussion on the forum about it?


And a mixer can run & scam at any time too, this way if you do your own research you can find some *somewhat* trustworthy exchanges.
Not saying you are going to not get burnt at some point in time.

-Dave

Your method for an alternative to using mixers is good but it'll break if exchanges freeze the account and ask for identification documents. I've never used mixers before but if I had to I'd prefer using your approach with desktop Electrum wallets for ease in withdrawal if I had to do it.

Both accounts should also be created under different email addresses. But it can all be in vain, exchanges etc. often share information between one another.

It was a matter of time to see this happens. I always asked myself how those services can be legal because any under who sends their coins to mixing services is because he has something to hide...

The thing here is that users don't have to register on that service to use it, they only have to send the coins and provide the address where they want the 'clean coins', so, it will be kind of hard for the govs to trace the users who are washing their coins.

I have posted it before and I'll say it again.
Mixers are for people too lazy to do something themselves.

Do you want to "mix" your bitcoins. Go ahead it's simple, go to this site and they will do it for you.

Want to do it yourself, yes it's more work but it can be done.
1) Find an open public Wi-Fi
2) Register for an anonymous email account
3) Setup an account with an exchange that has fairly liberal KYC
4) Setup another account with another exchange that has fairly liberal KYC
5) Send coins to 1st exchange, exchange to another coin, send to 2nd exchange, exchange back to BTC, withdraw, done.

If the 1st exchange has XMR or another somewhat anonymous cryptonight coin you can do 2 accounts at the same exchange BTC -> cryptonight -> send to local wallet -> send back to 2nd account at exchange -> withdraw.

Never used a mixer or did the above, never saw any reason to, but it's not that difficult.

Side thought, makes you wonder if some of the exchanges that people say have faked volume are just a bunch of bots doing the above. Doubt it, but you never know.

-Dave

Interesting and other news, which was also posted on this forum. The FBI also uses mixers to hide transactions with confiscated bitcoins.
While the authorities openly state that mixing contributes to crime, the FBI itself does not hesitate to use them. https://news.bitcoin.com/report-claims-fbi-bitcoin-mixers-btc-forfeiture-processing/

If Bitcoin is not money like United States regulations claims but Security and virtual currency, how can someone be charged for Money Laundering when no money was involved, but just mixing of coins?
Privacy is basic human right and people will always work on solutions to make Bitcoin more private.

Funny thing is that only way they could do something like this is with some undercover agents pretending to ask for help or private message communication, something we often see in bitcointalk forum.
You can see that charges are for Money Laundering - STING operation, and I don't think that Sterlingov was very smart with choosing to live in United States so that was big risk from his side when he was not a US citizen.

I don't think that Coinjoins are much better solution for privacy especially when Bitcoin fees are higher, and they can always create some malicious code update for wallet and pretend they are good contributors.
Yesterday I found out about interesting wallet called Mercury that still in early stages, that have statechains for transfering private keys in a safe way without fees, and I tested it for the first time with small amount of testnet BTC.
Maybe something like this will be used in future for mixing and swapping coins.

I knew that one day it would come to this point. Mixers were created to allow people to make their bitcoin transactions more private and anonymously but somehow bad actors took advantage of these services for their shady activities. If authorities are out to get mixing service providers then I think, this should serve as a warning to other mixing services. The first step to create an anonymous service is to be anonymous yourself. Too bad for Bitcoin fog owner. He'll be charged with multiple counts. I'm not sure how the authorities plans to sort out users of such services.

They are plenty of reliable mixers on onion domain rn those unlikely to be shut down.

I guess, but take note that reputation isn't something that people could replicate. People wouldn't use just some random service that just popped up, just as how people probably wouldn't immediately use a newly released wallet software.

Exactly what I was going to say.

Coinjoins are just an open source software. Authorities cannot open source software, they cannot control people coding at home.

They cannot control where I store my bitcoins, and if I use some software like coinjoin we can still have some privacy.

There will always be mixes they will be just opened on anonymous name/onion domins if this come to this point.

This is the document that has been filed (13 pages long):
https://www.courtlistener.com/recap/gov.uscourts.dcd.230456/gov.uscourts.dcd.230456.1.1_2.pdf

The agent behind the investigation depicts the facts that he found, that support the three charges. A few key points:
-   Bitcoin Fog has been active since 2011.

-   Even though there is a clear site for visibility, the service seems to be Tor based.

-   Over 1,2M BTCs have been mixed through the service (chain-analysis forensics data).

-   They identify as the largest senders through the service Agora, Silk Road, Evolution and AlplhaBay.

-   The site was originally announced … on Bitcointalk (see https://bitcointalksearch.org/topic/m.596034). Reading through, it’s clear that the officer in charge read all the related posts on the forum (warning for others).

-   An undercover direct TX was sent to the Mixer in September 2019, and on November 2019 another controlled TX, being the latter originated from an undercover account on Apollon darknet market. They also sent a message to the admin to indicate that they were going to mix BTCs obtained through illegal activity.

-   Sterlingov used the same email on his Bitcointalk account, as that to register the mixer domain. He paid for the domain using a Liberty Reserve account (a Costa Rica currency Exchange). The document depicts how they linked that to a Mt. Gox account (multiple steps in-between), and yes, they got access to IP logs to help tie things around (Liberty Reserve and, apparently Mt.Gox). Also records from Google were used in the loop…

So information dating back nearly a decade ago, and some sweet collaboration, managed to identify Sterlingov, and tie him to the Mixer…

There's a good chance that it's simply just because it's not on their radar yet, knowing that it's a safe assumption that only a very small minority use mixing services. Of course, I could be wrong.

I think this depends on a country and its regulations. The US is known to treat BTC quite strictly, and I wouldn't be surprised if mixers are already illegal there. To be honest, I haven't seen any research on who actually users mixers and for what. I think that to make decisions like banning mixers or limiting their operations, there must first be research available that proves they're mainly used for illegal purposes. I've never used mixers because I haven't felt the need to do it, but I'm also not sure that they're mostly used to serious criminals.

Not really surprised with this news. Those who have been around here may remember about what happened to Bestmixer.io. The operators were arrested and jailed for aiding money laundering and other criminal activity. The authorities can never be comfortable with any sort of Bitcoin mixing mechanism. It goes diametrically against their goal of tracking each and every financial transaction in this planet. Anyway, I would say that it is good that for now they are concentrating on the mixers. But I am afraid that they will go after the Dex sites, once they are done with the mixers. And the mainstream exchanges may be next.