Topic: Stealing from the IRS- Talk about a Gamble! Regulatory scrutiny for crypto mixer (Read 74 times)

I don't think there are any still functioning mixers that have gambling and exchange options on them anymore. Chipmixer used to have gambling but I think social engineering removed that (of people complaining chipmixer stole their funds because they just kept pressing buttons or something).

As above, mixers just pool funds together in an effort to reduce their traceability and they do that bit well, if you actually want privacy though you have to know how to get it - it's not impossible, but it is hard to do.

I think this should belong to Bitcoin Discussion more than Gambling Discussion.

But to answer your question, mixers generally work by accepting coins from those who wanted to use the service and pile them up in one big heap (mixer's own addresses). Afterwards, they would then send out the original input from one user to their new address using funds from a completely different address to obfuscate the trail. Think of it like a big box accepting one type of object, then giving another person the same object but with a slightly different quirk, but completely different from what he previously has before the mix. That's just it basically.

Mixers might have some embedded casino games in the platform itself but usually it is just a separate feature. Maintenance might be a pain the ass. Maintaining a mixer in itself is already a pretty daunting task, why add more complexity to your site when you can just create another website dedicated to gambling instead.

Now I just came across this article: https://www.coindesk.com/policy/2023/01/06/brother-of-criminal-bitcoin-mixing-ceo-pleads-guilty-to-stealing-712-bitcoins-from-irs/

Gary Harmon has got some serious balls sneaking his brother's Helix wallet recovery seed to get access to IRS seized funds from his brothers crypto mixing service, Helix. Did he think that he wouldn't get caught by the IRS? Here is a small snippet from the Coindesk article below:


"An Ohio family now has not one but two felons facing potentially lengthy prison sentences for crypto-related crimes.
Cleveland man Gary Harmon, 31, pleaded guilty to one count each of wire fraud and obstruction of justice on Friday for stealing 712 bitcoins from the Internal Revenue Service (IRS). The bitcoins had been seized by law enforcement from Harmon’s older brother, Larry Harmon – the CEO of darknet crypto mixing service Helix – after his 2020 arrest.
Larry Harmon pleaded guilty to one count of conspiracy to launder monetary instruments in August 2021. He was ordered to pay a $60 million civil penalty by the Financial Crimes Enforcement Network (FinCEN). The elder Harmon has not yet been sentenced – as part of his plea agreement, he was required to forfeit his ill-gotten gains as well as turn government informant. According to his lawyers, his cooperation is “active and ongoing.”
But while Larry was cooperating with the government, his younger brother – who was formerly employed by one of Larry’s companies, Coin Ninja – was stealing from it, pilfering crypto from Larry’s forfeited wallets.
According to a newly released memorandum filed by prosecutors in August 2021, Gary Harmon used recovery seed words to recreate numerous wallets that belonged to his brother. In April 2020, he made a series of eight transfers from Larry’s forfeited wallets – Trezor wallets being held in an IRS storage locker – to his own wallets. In total, the younger Harmon brother purloined a total of 712 bitcoins from the IRS – at the time, worth $5.4 million.
Prosecutors said that Gary initially vehemently denied draining his brother’s wallets, even when presented with evidence that he had done so."

You guys might remember when this all went down with Helix in 2021. This article lays out the sentence for Larry Harmon: https://www.wsj.com/articles/operator-of-helix-bitcoin-mixer-pleads-guilty-11629328791

Here is a highlight from that article:

"Mr. Harmon’s case is one of the first involving a cryptocurrency mixer that has resulted in a conviction, according to Ari Redbord, a former assistant U.S. attorney for the District of Columbia and a former senior adviser at Treasury. The guilty plea shows U.S. law enforcement is pursuing cryptocurrency mixers with connections to the Darknet and illicit activities, while the transparency of blockchain enables them to trace the funds.

“The nature of cryptocurrency is to allow law enforcement to have unique visibility on financial flow where they never had before,” comparing it to government-issued fiat currency, said Mr. Redbord, who is now head of legal and government affairs at TRM Labs Inc., a digital currency tracing firm."

Chip mixer websites out there are currently being watched and tracked for illicit activity showing links to human trafficking, drugs, money laundering etc. They are being watched now more than ever before, as many of the folks on this forum are peddling adds through signature campaigns linked to chip mixers and online casinos it does make you wonder how many of these companies have links to these types of services that the IRS is watching for.

I feel like being anonymous in crypto is virtually impossible for the most part. They should change the name from "paper trail" to "blockchain trail" or something when it comes to crypto because there will always be some sort of trail publicly available to follow the funds, even with a chip mixer. Can someone explain to me how chip mixers work? I still don't fully understand this. And do most chip mixers also have some sort of casino or games along with their mixing service or is it generally separate?