Topic: The absolute insanity Congress is writing now... - page 6. (Read 1460 times)

i'm genuinely curious why mixing is such a big deal for honest people. why do they even need to use it? give me one good use case.

honest people don't need to "tumble" their bitcoin.

that blogpost was biased towards trying to get people to make a donation to coincenter.org so in my opinion the entire thing had ulterior motives...as i had previously mentioned.
 

there is

mixing is not illegal in all cases/uses due to criminal use specifically.. because criminal use specific mixing is then called LAUNDERING
so theres your definition of criminal use of mixing... LAUNDERING


much like the use of funds sent through alot of hops of addresses(series of transaction) in quick succession is called TUMBLING
and when using single use addresses+tumbling is then defined as a class of mixing*
regulators for years have listed tumbling plus other features as suspicious red flags that raise the level of suspicion threshold to be worth of investigating as mixing

mixing is not default illegal due to launder as-is from the start. its just suspicion rated as linked to possible laundering.. it is however possibly illegal for other reasons which are other reasons of needing suspicious investigation
for instance IF the coordinator is accepting a direct fee for operating the service and processing payments on behalf of other users.. because they then become a money service business and when operating without a money service business licence and not complying with the regulations of MSB, thats when mixers get caught by authorities for reasons of operating as a unregistered MSB

there is many forms of regulatory guidance on these which regulated services follow and form their own operating procedures to comply. they even have designated compliance officers too.

...
personal thoughts the whole topics thing..
of the use of single use addresses AND transacting through a series of addresses should have remained in the definition of 'tumbling'..
but it seems government just want to attach it to the tagline of mixing..
which should only apply if multiple inputs from different utxo's are then tumbled together

EG
changing
Creating and using single-use wallets, addresses, or accounts, and sending CVC through such wallets,
addresses, or accounts through a series of independent transactions;
to
Creating and using multiple single-use wallets, addresses, or accounts, and sending CVC through such wallets,
addresses, or accounts through a series of independent transactions;

..
i think d5000's issue with "please spoonfeed me summarised list in my hand of the definitions' is more about how these clickbait tweets of emotional twitter users that have not done full research, get their own tweets misinterpreted and then comes the clumsy misrepresentations of lots of people then redefining things and forming their own opinions..

however if people done better research on the actual source data. they will see the topics first post vs the definition that even stompix was able to display are different and where in this topic stompix shows he done more research than NotATether

NotATether wanted to take a emotional random blogpost of some rando's opinion and try to clickbait it into presuming that just using single use addresses is mixing..

advice to NotATether, when reading posts, tweets, blogposts.. try to look for the source and learn whats misrepresented opinion or whats fact

Especially that this is done automatically, often without the user even knowing that the unspent change is stored on another address within the same wallet.
AFAIK you cannot blame someone for this and treat him like a criminal if there was no intent to break the law, even if such law exists.
ALso, who's there to blame if it's the software that does it automatically for the user? Ban all bitcoin software when coinbase is using that software to store bitcoin for blackrock?

And how exactly would you know that?

On the blockchain you can only see that this user only uses single-use addresses, not his "intent".
You can now pay a chain analysis firm to see if they can link them together. You can then suspect that if he made internal transfers (i.e. within his own addresses), then he's "trying to obfuscate source and destination". But that would mean that you cannot make even basic privacy improvements, not even UTXO consolidations, without being suspected as "obfuscating".

The problem is not so much the "mixing" definition. There should be an exact definition when these transactions become suspicious to be linked with criminal entities, and that's missing in the FinCEN proposal. If I overlooked it then please quote it Thus, the consequence will be that any "internal wallet transactions" of any customer, which are linked with coins that the chain analysis firms consider even slightly "tainted" will have to be reported by the businesses covered by this measure (banks, exchanges ...). I guess that's a lot of customers they'll have to report.

Same thing has happened in India which once had highest number of traders and now Binance is banned along with all the other foreign exchanges to pressurise them to implement so called law of land to tax 30% on gains and 1% TDS on every transactions.

The problem is they don't have any idea about crypto or Bitcoin and jump to conclusions with their limited knowledge which is too dangerous and also they are so cruel that even if they understand still they will go against it since they don't have control over it.

As arrogant as they talk about how to control a decentralized sector, please don't introduce things that they just want to lock us up to manage. The meaninglessness of the imposition only increases contradictions and makes more people turn away and not trust what they do.

I think about things that in the future if they continue to express their attitude of wanting to control bitcoin (crypto), perhaps it will develop in a way that ignores their involvement, and needs to be the way they exist. It's just a formality that doesn't help create harmony in the crypto community.

Oh, it's pretty simple
Is someone trying to obfuscate the source and the destination of the funds? Then
A- is he using multiple one-use addresses to transfer those coins > he is mixing it
B- is he using only one address that he has used 1000 times before? he is not mixing his funds


Apart from the fact that I would not take advice from the lawyers of a guy who landed in jail based on their advice, even they say the same thing, it's a tentative definition encompassing activities. But, let's make it far easier, how would you define mixing transactions if it were up to you to write a law about it ? I'm pretty sure you're going to end with the same text!

As far as I have understood the proposed regulation, that's what FinCen expects from covered financial institutions (such as banks or exchanges):

- regularly conduct blockchain analysis on the CVC (=cryptocurrency) funds they can connect to their customers (e.g. via deposits and withdraws)
- if they suspect that a customer is engaged in CVC mixing, then reporting the customer and the associated transactions.

The problem is just that the definition is not precise enough, and that blockchain analysis itself can fail or lead to false positives. Let's suppose we have a customer of an US exchange which has bought Bitcoins on a P2P exchange to an entity which later was linked to Iran or North Korea (due to blockchain analysis). The customer does use CoinJoins to protect his privacy. So we have here all ingredients present that the exchange must report the customer and his transactions - even if the customer didn't at all have any bad intention: he has interacted with a suspicious entity, and he has done CoinJoins which are a subclass of the transactions which the FinCEN deems as "CVC mixing".

Of course that doesn't mean that legal action will be taken against this person, but the fact that all his activity will have to be reported, means that a lot of people become "suspicious" basically only due to best practices like CoinJoining or using single-use addresses in combination with using P2P exchanges (where as a private person it's very difficult to know if you're interacting with a criminal, although of course there are some red flags, like a very cheap price).

In fact, they acknowledge the problem themselves in the section "(C) Clients of Primary Affected Parties", where their argument is that if a privacy-oriented person is reported, then nothing may happen and their data will be well protected  

If you have another interpretation of the FinCEN proposal I'm eager to hear yours But please let's stay close to the text of the proposal.

There is also this opinion by the Samourai lawyers, very technical but interesting for those wanting to see the details of the criticism.

They are surely stepping up with their crazy shit but I don't think this bill will be accepted any time soon.
I think they are creating stuff like this to shock people so that when they propose other restrictions they don't look so drastic, this is the strategy they use all the time with other law changes.

Should people also create new bank accounts every time they receive new fiat payment?  
I think people seriously need to think about making drastic changes with this rotten government model we live today, but I am sure Trump will ''fix'' this in next election circus show.

There can't be a false positive when this is a definition and the purpose of the law targets the one that is defined there.

Let's give you an example from EU directives, in my parents' line of work, agriculture, we have this:


No, it doesn't, it gives a definition for mixing that it is a conflation of multiple activities.
Nothing in this world would be possible if not using these things, a fraudulent financial transaction to be punishable it must be defined, so what makes it an unlawful banking transaction? First, you would need to define a banking transaction but obviously, not every financial transaction is illegal, not every time someone deceives someone there is a financial transaction, but you need a complete definition for that to cover every aspect.

I'm glad that I'm not a US citizen and I don't live in the USA. The problem is that the USA is trying to act as an empire and impose it's legislation on other jurisdictions. If those jurisdictions don't voluntarily "bend a knee to the master" then they get punished with sanctions.
The only consequence of such legislation would be US Bitcoiners moving their BTC funds in centralized exchanges located outside the USA(I know that having a hardware wallet is better, but many people still use hot wallets). Maybe soon the hardware wallets like Ledger and Trezor will start complying with such stupid regulations and many BTC HODLers will have to move their BTC somewhere else. I hope that the Republicans will win the elections and stop this nonsense.

As much as this is a really good opinion about US politics, you don't understand a lot about how greedy and vile these people are going to be when it comes to holding their power and position in the government, even if you want to believe that there's a fair election in the US, there's bound to be some form of manipulation so the people that doesn't deserve to be in power will be the ones that's going to get elected. There needs to be more than just banding together in the US other than choosing the right politicians to be on the position. Remember that this is also applicable to every country so make sure that you're doing it right. Regarding the stupidity of the US Congress, they're just going to make things more complicated for their people to get into cryptocurrency, I guess when you have old people that don't even know how to convert their PDFs to a Word document, you're bound to get this kind of legislation.

I understand that.

But this draft conflates both of them together. It could be interpreted to mean any of these conditions being violated or multiple (or all of them).

That is why I don't think this bill is going to succeed.

Having said that, I am still strongly against this bill, and already knowing your position about mixers, this will be the only reply I'll be writing to you here about this subject.

i dont understand why people want to use mixing services in the first place. but they probably shouldn't be doing it since it is shady. if you need privacy then use something meant for privacy like monero. and deal with the consequences. if there are any but don't turn bitcoin into something it's not and then make everyone have to pay...

i think that pdf document also discusses how doing things like atomic swaps is just another form of mixing. and i agree it's probably just as egregious as using mixing services because essentially that's what people probably use them for is to obfuscate the source of the funds...

JjBitcoin is important and have been in strict domination in these past years. Montero is also one of the promising projects but it doesn't mean we should overhyped them, rather focused more on the current projects that have set in fruitful evidence in placr. We can only make imaginations about things but they don't come to pass because there's always hits to accomplish in the system.

In general, I share the concerns laid out in the OP.

There's still a difference between what is written in this FinCEN proposal, and "considering all re-using of addresses money laundering". Basically what they seem to want is for financial institutions to have to report customers engaging frequently in such actions and are already suspicious to do mixing in jurisdictions outside the US, what is already known in AML regulation as a "risk based approach".

There's also a part where they talk talk about possible legitimate mixing usage:

FinCEN proposal from October 2023

So at least they don't say that every mixing is illegal or suspicious (PMLC - "primary money laundering concern").

Anyway I'm not as optimistic as @stompix here. The broad wording could lead to a lot of false positives, and would also create a nightmare for Bitcoin's fungibility if this data is leaked and shared. I think if the Human Rights Foundation (that's the cited tweet coming from) is criticizing this, then it's serious.

In such an alternative/parallel universe (science says they exist btw) Bitcoin wouldn't gain any mainstream traction, no ETFs either.

It's very clear to me they envision to turn BTC into a pseudo-CBDC. And that's just the start, more is coming next from BlackRock...

to NotATether

please read the stuff you quote, and learn the reality of actual definitions, and not just the clickbait
heres a hint:

its not about classifying single use wallets/addresses as mixing

its about classifying mixing as mixing.. whereby mixers use single use addresses and send value through a series of transactions
(appearing as spam spending multiple times in a short period) to obfuscate whom is involved start middle or end

normal people dont spend value through a series of transactions which the coordinator has the keys for to obfuscate if the series is one coordinator or multiple participants in a chain of rapid hops
instead normal people just pay the destination in one transaction
mixing however DOES use the process of single use addresses and hops the payments through multiple transactions before getting to the intended recipient

but note. though this does not impact normal users paying normal destinations even in single use address.. it does impact spammers that spam value in every block multiple times in a short period,
 

This is why politicians desperately need to learn how Bitcoin/Crypto works. You can't write legislation that makes any sense when you don't have a clue how the thing in question works. These ideas are coming from not understanding that cryptocurrencies work completely differently from banks.

The industry needs legislation, but first Congress needs to a basic understanding of how this stuff works. They need like a two day bootcamp to get them up to speed on the basics, then they'd laugh at these stupid ideas.

Yeha, I thought I would run into this here also..

So, how about everyone calm down?
Here is the full text not speculations:


In short, mixing is defined as doing  a, b ,c ,d e with the purpose of hiding the originating and final address.

They don't plan on banning or punishing any of those actions, the define mixing with intent as a a cumulation of those actions!

By this proposal mixing is defined as tuning single wallets to perform this action, IT DOESN'T define using single addresses as mixing!
You know the whole thing of a bear is a mammal but not every mammal is are bears?
Driving 90km/h in a city is a crime but driving 90km/h is not on its own alone!