Mixing your Bitcoin might become illegal in the future

Abiky

legendary

Activity: 3220

Merit: 1363

www.Crypto.Games: Multiple coins, multiple games

Quote from: odolvlobo on June 03, 2021, 06:36:35 PM

You are identified by the exchange when you do BTC->XMR as well as when you do XMR->BTC. If you go through a mixer, then ideally only the mixer can identify you.

You can get easily identified with a centralized exchange when trading XMR to BTC. But with decentralized exchanges, atomic swaps, and even in-person trades, that's another story. I'd suggest anyone to stay away from centralized mixing services since they're subject to the risks of a single point of failure. You can easily expose your identity using such services. Not to mention, it's easy enough for governments to shut down a centralized mixer. You're better off using a non-custodial mixer (Wasabi Wallet, Samourai's Whirlpool privacy technique) to obfuscate Bitcoin transactions. I believe such mixers will survive in the long run regardless of governments' stance against them. That's thanks to the decentralized and open source nature of crypto. It wouldn't be possible to overcome government regulations if the whole crypto/Blockchain space was centralized. Just my opinion

odolvlobo

legendary

Activity: 4466

Merit: 3391

Quote from: titular on June 03, 2021, 02:16:27 PM

I always thought filtering 'acquired' through the XMR network always did a good job of covering tracks. Wouldn't this completely obfuscate the funds if you are exchanging the 'dirty' funds through XMR. I feel as though this works the same as a mixer. Maybe I am looking at this wrong.

You are identified by the exchange when you do BTC->XMR as well as when you do XMR->BTC. If you go through a mixer, then ideally only the mixer can identify you.

Vaculin

hero member

Activity: 2940

Merit: 613

Winding down.

If it finds legal today, that be going to impossible but it remains legal unless if it was run by illegal mixing sites that the government is on the hunt with these services.
However, the situation might be changing as well. It is to know that some illegal activities are using mixing services to keep them anonymous (at this time). Maybe it was needed for all Bitcoin mixers to ask KYC to everyone uses their services to avoid such a thing and to help the authorities solve the problem otherwise, these mixing platforms will become a part of the conspiracy.

titular

sr. member

Activity: 287

Merit: 368

"Stop using proprietary software."

Quote from: Abiky on May 07, 2021, 02:25:35 PM

The recent popularity of Bitcoin has brought the attention of governments and central banks worldwide. We've seen certain opposition from countries like India, China, and Russia against the pioneer cryptocurrency. Countries that are friendly towards Bitcoin (like the US and UK), are constantly surveilling its citizens for any suspicious activity. I've seen that some countries have taken action against Bitcoin mixing services with the excuse that they're used for money laundering and terrorist financing. Since most (if not all) of these centralized mixers don't comply with KYC/AML regulations, they're subject to being shut down by the government. Imagine if criminals begin using Bitcoin mixers in mass for money laundering purposes. If the trend continues, mixing Bitcoin may turn out to become illegal.

Do you think there's a possibility this will happen in the future? If not, why? What do you think will happen once mixers (both custodial and non-custodial) are banned by the government? Will this force people to use privacy coins more thoroughly? Or will everything remain the same? Any input will be greatly appreciated. Thanks in advance

I always thought filtering 'acquired' through the XMR network always did a good job of covering tracks. Wouldn't this completely obfuscate the funds if you are exchanging the 'dirty' funds through XMR. I feel as though this works the same as a mixer. Maybe I am looking at this wrong.

seoincorporation

legendary

Activity: 3346

Merit: 3125

Quote from: Lucy Bitcoin on May 28, 2021, 10:33:29 PM

I don't agree with this view, even in some countries that support BTC today, they have been used to do something illegal.

It's not illegal to mix bitcoins, but it's important to see what people who own bitcoins are doing. It's not about now or the future

I wouldn't say is not illegal to do it now... Some weeks in the news we read articles like:

Prosecutions of Bitcoin Mixers Raise Crypto Privacy Questions
https://www.law.com/newyorklawjournal/2021/05/17/prosecutions-of-bitcoin-mixers-raise-crypto-privacy-questions/?slreturn=20210503103845

There they explain how the Mixing process goes against the money laundering laws, and that's why it's considered an illegal activity:

Quote

The Financial Crimes Enforcement Network (FinCEN), the enforcement arm of the U.S. Department of Treasury, considers anyone that transmits a virtual currency that is not a party to the transaction to be a “money transmitter” for the purposes of regulation. Based on this framework, FinCEN defines cryptocurrency mixers as money transmitters, which subject mixers to FinCEN’s anti-money laundering (AML), Bank Secrecy Act (BSA) know-your-customer (KYC) checks, and combating the financing of terrorism (CFT) program requirements that have long been applied to financial entities.

androyster

member

Activity: 138

Merit: 10

Quote from: davis196 on May 07, 2021, 11:53:25 PM

The darkweb is being used for illegal activities.Is the darkweb shutdown by any government?
The Tor browser and Tails OS are the main tools used to access the darkweb.
Are Tor browser and Tails OS shut down by any government?
The question here is HOW the governments can shut down Bitcoin mixing services?Is this even possible?
I don't see how any government in the world can effectively shut down all BTC tumblers,that are used by it's citizens.

Correct. The best they can do is take down a couple of large mixing houses to make an example. But that doesn't prevent anyone from mixing themselves.

Abiky

legendary

Activity: 3220

Merit: 1363

www.Crypto.Games: Multiple coins, multiple games

Quote from: cabron on May 28, 2021, 09:15:40 PM

There could be more Bitcoin mixers later if the mining regulation will affect the fungibility of the BTC mined from China or from the regulated pools. Mixers will probably go underground.

I'm not sure if mixers will still be effective if the BTC regulations track the origins of the coins before it could get into the exchanges, it could be scary in the end to send your coins when they could just say the coins we own comes out fro the mixers.

There's a huge probability mixers will go underground once they're declared illegal by mainstream governments. Mixing services might operate on the TOR network, or become non-custodial (decentralized) in the long run. In the worse case scenario, people could simply "anonymize" their Bitcoin by exchanging it in-person to a privacy-oriented cryptocurrency like Monero. It's also possible to enjoy privacy in Bitcoin by performing "off-chain" transactions. I believe that governments will eventually give up as their efforts become in vain.

With or without regulations, Bitcoin will be here to stay thanks to its decentralized and censorship-resistant design. Centralized mixing services will have no choice but to enforce KYC/AML or face a full government crackdown. I'm pretty sure they'll go the KYC route, greatly defeating the purpose of a mixer. Just my thoughts Grin

jellylily

jr. member

Activity: 50

Merit: 2

Just imagine the amount of laundering with fiat money (offshores and other "legal" schemes)... There are evil actors in both sides...

Lucy Bitcoin

newbie

Activity: 20

Merit: 0

I don't agree with this view, even in some countries that support BTC today, they have been used to do something illegal.

It's not illegal to mix bitcoins, but it's important to see what people who own bitcoins are doing. It's not about now or the future

pealr12

hero member

Activity: 1946

Merit: 502

Quote from: Abiky on May 07, 2021, 02:25:35 PM

The recent popularity of Bitcoin has brought the attention of governments and central banks worldwide. We've seen certain opposition from countries like India, China, and Russia against the pioneer cryptocurrency. Countries that are friendly towards Bitcoin (like the US and UK), are constantly surveilling its citizens for any suspicious activity. I've seen that some countries have taken action against Bitcoin mixing services with the excuse that they're used for money laundering and terrorist financing. Since most (if not all) of these centralized mixers don't comply with KYC/AML regulations, they're subject to being shut down by the government. Imagine if criminals begin using Bitcoin mixers in mass for money laundering purposes. If the trend continues, mixing Bitcoin may turn out to become illegal.

Do you think there's a possibility this will happen in the future? If not, why? What do you think will happen once mixers (both custodial and non-custodial) are banned by the government? Will this force people to use privacy coins more thoroughly? Or will everything remain the same? Any input will be greatly appreciated. Thanks in advance

I don't think the government are on the wrong with this, since this service helps to ensure anonymity then it is very likely that shady people are using it for such activities to get away with their crimes, even with fiat people who are involve in bad things are using to launder money and other crimes talk less of btc that is anonymous,
Why would someone want to use this service if your btc are genuine? In a way I believe yes, government may soon consider the service illegal.

cabron

hero member

Activity: 2800

Merit: 595

https://www.betcoin.ag

Quote from: Argoo on May 28, 2021, 07:37:13 PM

Mixing will always be under the scrutiny of governments and their regulators, as these services are used by those who do not want to leave traces of their transactions, which means that governments will always have reason to believe that such services are being used for illegal purposes. Therefore, it is they who, first of all, will experience constant restrictions, and possibly a ban on such services. However, it is always interesting to watch the opposition of craftsmen and regulators from governments. It will be a long confrontation.

There could be more Bitcoin mixers later if the mining regulation will affect the fungibility of the BTC mined from China or from the regulated pools. Mixers will probably go underground.

I'm not sure if mixers will still be effective if the BTC regulations track the origins of the coins before it could get into the exchanges, it could be scary in the end to send your coins when they could just say the coins we own comes out fro the mixers.

Argoo

sr. member

Activity: 2352

Merit: 245

Mixing will always be under the scrutiny of governments and their regulators, as these services are used by those who do not want to leave traces of their transactions, which means that governments will always have reason to believe that such services are being used for illegal purposes. Therefore, it is they who, first of all, will experience constant restrictions, and possibly a ban on such services. However, it is always interesting to watch the opposition of craftsmen and regulators from governments. It will be a long confrontation.

Abiky

legendary

Activity: 3220

Merit: 1363

www.Crypto.Games: Multiple coins, multiple games

Quote from: ranochigo on May 20, 2021, 11:22:19 AM

CoinJoin? Governments are requesting exchanges and services to blacklist coins that were involved in CoinJoin transactions. CoinJoin mixes your coins by obscurity but it doesn't necessarily break the link between them. Unfortunately, if you want any adoption, you NEED exchanges which are registered. Decentralized exchange unfortunately doesn't always sit well with people; P2P OTC trades are not as secure as it seems. Some would rather give up their privacy than to risk their funds.

CoinJoin is not the only privacy solution. Monero uses ring signatures + CT to obfuscate transactions, making it the ideal solution for those seeking true privacy. All you have to do is exchange BTC to XMR either in-person or through a decentralized exchange. Governments may successfully ban centralized mixing services, but they'll fail doing so with non-custodial mixers or privacy-oriented cryptocurrencies like Monero and Zcash.

Of course, decentralized solutions are not as easy to use as one would thought they would be. For the non-tech savvy person, it's much easier to go through centralized services than decentralized ones. With a centralized service, you're able to make a dispute or claim if things go in the wrong direction. But with a decentralized service, you're on your own. In a world where people don't value their privacy, banning centralized mixers will do little to no harm towards Bitcoin's mainstream adoption. Only libertarians, tech-savvy people, and anarchists will seek privacy via other means while the rest of the world will carry on as usual. With or without a mixer ban, Bitcoin will be here to stay thanks to its decentralized and censorship-resistant design. Just my thoughts Grin

slaman29

legendary

Activity: 2674

Merit: 1226

Livecasino, 20% cashback, no fuss payouts.

Quote from: slaman29 on May 11, 2021, 01:47:09 AM

But mixing Bitcoin does not equal money laundering and the mere activity of going into a business and making your money trail more private? That can't ever be a crime. Otherwise our regular use of fiat is wrong.

Quote from: temple on May 11, 2021, 11:51:51 PM

It is even understandable that you don't want anyone else to know with whom you are doing business or with whom you are in touch. If you see a doctor and it would be possible to pay with Bitcoin on day, nobody wants that to be stored in the blockchain available for anyone to see and identify you. Even if you just buy a pack of cigarettes or alcohol, there is no point why anyone should be able to fully identify and analyze your behavior.

Exactly. Privacy and seeking privacy are not crimes. Criminal activity is always criminal activity. People need to stop confusing both as the same thing.

If I am doing a crime, what I do to hide it cannot be also automatically a crime. Wearing a face mask to hide my identity while in a bank could be a crime (to prevent making robbing a bank easier), I agree, but you cannot outlaw wearing face masks.

Quote from: zanezane on May 12, 2021, 03:22:05 AM

The problem with mixing though is that there is no other way for it so it can compromise with authorities, for me I wouldn't risk letting mixers loose knowing that they can be used for crimes like money laundering or tax evasions. Think of it like this, there is a bowl of with 100 M&Ms and around 20 of them are poisonous and will kill you instantly, no way to tell if they are poisonous, I am sure that no one is going to risk taking it unless they are suicidal or have a death wish.

I really can't see the link here. Your Ms are always poisonous, but mixing is not always poisonous. As I said in my example above, if mixing is always poisonous (to use your bad example), then your use of fiat is always poisonous (dollar bills and cocaine, for example).

hemzer

jr. member

Activity: 43

Merit: 7

Curious how you define " ill gotten gains,"?

Quote from: Fortify on May 07, 2021, 03:25:40 PM

Quote from: Abiky on May 07, 2021, 02:25:35 PM

The recent popularity of Bitcoin has brought the attention of governments and central banks worldwide. We've seen certain opposition from countries like India, China, and Russia against the pioneer cryptocurrency. Countries that are friendly towards Bitcoin (like the US and UK), are constantly surveilling its citizens for any suspicious activity. I've seen that some countries have taken action against Bitcoin mixing services with the excuse that they're used for money laundering and terrorist financing. Since most (if not all) of these centralized mixers don't comply with KYC/AML regulations, they're subject to being shut down by the government. Imagine if criminals begin using Bitcoin mixers in mass for money laundering purposes. If the trend continues, mixing Bitcoin may turn out to become illegal.

Do you think there's a possibility this will happen in the future? If not, why? What do you think will happen once mixers (both custodial and non-custodial) are banned by the government? Will this force people to use privacy coins more thoroughly? Or will everything remain the same? Any input will be greatly appreciated. Thanks in advance

Bitcoin mixers have one job: To disguise the original source of Bitcoin funds. While the medium (Bitcoin) is new, this is the very definition of money laundering. I don't know of a single good reason to use a mixing service, other than to try to hide ill gotten gains, although I'm sure someone will come up with an excuse or two. If the government actually cared enough to look that deeply into peoples finances, it is likely they would come to the same conclusion already, however the vast majority of people using these services are doing it with such small amounts that they will probably get ignored. They'll also be ignored, because unless they are moving very large sums around and converting them into fiat, the resources required to piece together such criminal actions will not be worth it to the taxman. It is very likely these sites are already covered by existing anti-money laundering laws, however they can reside in internet grey areas and likely have servers in countries that are a bit more lenient when it comes to finances.

Vishnu.Reang

sr. member

Activity: 1988

Merit: 453

I don't understand how the governments can outlaw the mixers. Most of the mixers are based outside the United States and operate without any sort of license. Even if the governments try to outlaw them, they will simply move to TOR and other anonymous interfaces. And by some chance the government authorities manages to shut down one mixer, another will take its place in no time. IMO, the authorities should concentrate their resources elsewhere, on more serious issues.

ranochigo

legendary

Activity: 3038

Merit: 4418

Crypto Swap Exchange

Quote from: Abiky on May 20, 2021, 10:30:02 AM

It's possible to "counterattack" malicious actors on centralized exchanges and centralized wallet providers, because of the single point of failure (in this case, a middleman). However, we cannot say the same about decentralized counterparts. If most people begin using non-custodial mixers and decentralized exchanges, governments will have a hard time trying to enforce the rule of law. That's largely because a decentralized system is not tied to a single jurisdiction. I'd imagine how disastrous everything will be once criminals learn how to efficiently use non-custodial mixers. Governments will have no choice but to declare crypto "illegal" as their efforts become in vain.

CoinJoin? Governments are requesting exchanges and services to blacklist coins that were involved in CoinJoin transactions. CoinJoin mixes your coins by obscurity but it doesn't necessarily break the link between them. Unfortunately, if you want any adoption, you NEED exchanges which are registered. Decentralized exchange unfortunately doesn't always sit well with people; P2P OTC trades are not as secure as it seems. Some would rather give up their privacy than to risk their funds.

Quote from: Abiky on May 20, 2021, 10:30:02 AM

Nonetheless, I believe there may be no need to worry about mixers becoming "illegal" in the future. There are many ways to achieve privacy outside the scope of governments and other third parties. This is possible because of the decentralized and open-source nature of crypto/Blockchain. If it were centralized, it would've been easier for governments to enforce the rule of law. I bet non-custodial mixers and privacy-oriented cryptocurrencies will rise like skyrocket once centralized mixing services come to an end. Of course, most people don't care about their privacy since they've got nothing to hide. But for businesses, privacy is crucial to protect sensitive information from prying eyes. Time will tell us the fate of privacy in Bitcoin as it becomes more popular in the mainstream world. Just my thoughts Grin

They don't need to ban mixers to spy on their citizen. There are tons of ways to do so without and if they're smart, they would bring blockchain analysis into the picture and let the mixers continue running. Centralized mixers can survive, they just need to operate in a jurisdiction which respects their privacy or operate off-shore.

butcher_spam

copper member

Activity: 1026

Merit: 177

[btc]

It is no secret that most of the use of bitcoin mixers, accounts for money laundering and financing of illicit goods and possibly terrorism. Why would an ordinary person want to use a bitcoin mixer? I have never used it and I do not understand why I need it. Bitcoin mixer is evil!

I live in Russia, and despite the prohibitions that our government uses in relation to bitcoin, I can quite afford to live quietly and withdraw my BTC without any problems. The main bans are only for large sums, many entrepreneurs launder good money through bitcoin, this ban was just for such situations.

Freezingel

sr. member

Activity: 574

Merit: 251

Bitcoin will always has its pro and cons. Even for long, bitcoin has been used for illegal things, and also crimes. That's why back in 2017 there are quite many disagreement regarding bitcoin in some countries, since many people thought that btc will be used for bad purposed only. Hence, many countries considered bitcoin as something illegal, and it still happens up until now. However, there are also countries that are supporting and accepting bitcoin. It's just the matter of perspective and interest. We won't know whether it will be illegal or not, since it's all depend on the government, how they want to act and decide.

DarkDays

legendary

Activity: 2030

Merit: 1189

Quote from: Abiky on May 07, 2021, 02:25:35 PM

Do you think there's a possibility this will happen in the future? If not, why? What do you think will happen once mixers (both custodial and non-custodial) are banned by the government? Will this force people to use privacy coins more thoroughly? Or will everything remain the same? Any input will be greatly appreciated. Thanks in advance

If people want to engage in illegal activity there is nothing that can stop them. Mixers might make things easier for them but even if these regulations where to follow it wouldn't be a full deterrent - there'll always be new ways.

As for mixers there might be some turmoil up ahead but at the same time it would take governments some time & money to follow this through. All of this will not stop people from using crypto as there will be other ways, more innovative projects that will try to provide its customers with full anonymity.

Just another stick in the wheel, but the wheel won't break!

Topic: Mixing your Bitcoin might become illegal in the future (Read 958 times)