Topic: What will a mixer do under the mentioned situation? (Read 313 times)

Mixers with their current business model cannot continue because they need to provide high liquidity with small profits that come from service fees. If we take ChipMixer it worked on donations. However, when the site was sized, they had a wealth of money, which is an amount that is impossible for one person to own. Or that you get it from the profits.

What I am trying to say is that the mixing services are a front for a business and it is not necessarily illegal, but it exploits the money of depositors in mixing the money they have, and therefore it is more difficult to track, but it is an activity that needs high liquidity, which means a party that has a lot of surplus money.

That party may extend from a government to an illegal activity that wants to launder money.

Firstly, hackers that are able to pull off such hacks aren't stupid, before the hacks get reported they must have already mixed the coin and transfer to other wallets then wait for the whole news to fade away before they start moving the coins or probably they would had traded them to privacy coins and held those in their wallet. But lets just say everything workout as you have said, what then stop the hackers from changing their wallet by splitting the coins between other different wallets since the previous wallets has already been identified and reported to the mixers and exchanges for them to stay on the look out for deposit from that particular address.

Unless there's some automatic means to detect any address that have interacted with the labelled address holding hacked coins then your suggestions won't be effective and the mixers can't identify were the coins are coming from. Mixer can know an address that coins are coming frim since they're centralized. Mixer can always cooperate with the government agency when they have a very strong case against them that they need their cooperation for lesser punishments although some mixers won't snitch on their customers and mixers can just freeze the account of the hackers or delay withdrawal for your last question.

Mixers aren't registered company. How can any government be sure that mixer companies have received their email? Also, what if mixers just ignore that email and say that by the time they read their email, coins were already mixed and they couldn't do anything? This situation is a joke man. If you are a mixer, you are a mixer or otherwise you are a fraud.

By the way, I asked similar question to Whirlwind owner, his response wasn't comprehensive but I think it's still worth to quote his answer on my question:

I'm not talking here about an already hacked scenario, but whenever such an incident takes place and the higher authorities immediately start contacting the mixers and if the mixers are, at all, interested in helping them out by stopping the mixing of the coins from the hack and return them to where they belong. I know nobody would use them if they do this, but isn't it good to stop the bad before it becomes worst?


I never said that any mixer is allowed to operate legally and that nobody can tell the mixers what to be done and what not, but does that mean that the government officials can't even try to contact these mixers to at least try their 0.01% chance at stopping the scammer from completing his crime and get away with the money as well?

Anybody here who thinks that using monero is the only option that is left for the scammer, then I believe that even for that option to become available for him, he first needs to settle his Bitcoins either through mixing or OTC and nobody would be able to complete a $300 million deal in one go (there's a chance that even the scammer gets scammed here) and if he goes through a mixer, I believe that a mixer may take some steps to stop this person.

Now, those talking about creating various new Bitcoin addresses and moving the coins there, every single transaction can be traced easily.

That's possible the government has been employing If You can't fight em join em tactics so they can control, make a profit and regulate, so it's possible that they will impose regulation on these mixers, Cryptocurrency community fight for privacy will go on and mixing business are here to stay so it's possible, or they will keep on chasing these mixers and Crypto holders will keep on looking and using for mixers to anonymize their coins.

There's a proof if the website has been hacked since the hacker is leaving his trace e.g. unauthorized connection and device, DDOS attack, regain access, changing password etc. Obviously the developer can create such drama, but it's matter of the government to trust the mixer claim or not.

Even there's no official laws and regulations for mixer, but we all know government always fight against of privacy and money laundering matter. It's just a matter of time mixer will be more regulated or they will ban all mixers.

Let's suppose a hacker is reading this. What will be his course of action now. Since the Authorities have asked mixers to keep an eye on this address and do not entertain any request of mixing from this address, the hacker can easily create one or more brand new bitcoin addresses and move the funds to those newly created address. Then he can move the coins from that address to the mixers and mix the coin without any issues.

Secondly, no government have officially allowed to operate the mixers and therefore they have no legal right to dictate the mixers on what to do and what not to do.

Generally hackers will try to cash out the stolen funds as soon as possible because they know that more longer they keep then it eill be harder for them to convert.

But as you said if there is such situation then the mixer has to manually blacklist any transactions coming from the listed address so they won't get into any trouble.
 
They're not really supposed to answerable to authorities but if they do when they feel that is the right thing then it can change the face of mixers from only funds mixed here are coming from illicit activities to they're here to give better privacy to individual and not to help the scammers.

There is a lot of mixing companies now but I doubt they will have the same answers to these questions, soI will just speculate because all the answers given here are not officially coming from the mixers team

There are mixers where the mixing is all automated and there are mixers where they can trace the addresses before they get into the pool

They serve their clients and they are not regulated to have an obligation to any entities or authorities because there is none on their TOS that says what kind of funds or clients will their mixers accept, this is not an exchange where clients are subject for verification

They may or they may not it will depend on how they will address this issue when they are called up and prosecuted.

They certainly know the address you used to make the deposit and some other information they can get from browser fingerprints like your ip address, os, browser.. Most of these information can be obfuscated by using a private browser which is highly recommended when dealing with mixers.

Most if not all mixers aren't licensed so they aren't under any obligation to disclose their customers' data to any third party. No one would be interested in using their services if they do so, anyway.
Besides, most of them claim they don't store their customers' activity logs since they clear them as soon as the session ends.

I doubt any reputable mixer would do something like this but technically it's doable. All they need to do is to seize the deposited coins without sending the mixed ones.

We can only speculate no Mixers' representative will go down here to address this question because it will give away their policy or actions that can harm their platform or will shy away potential clients.
It's a dilemma for any unregulated platforms to receive a notification from NBI to deal with something that will break their policy and terms of service, but I assume that they will not break their client's trust.

There's no intention on their part to help scammers or use their platform for criminal activities but I again assume they can compromise so they can protect their platform and at the same time protect their clients.

Monero has smaller adoption and hash rate than Bitcoin, it's increase the possibility of 51% attack. There are few institutions pressuring many centralized exchanges to delist privacy coins including Monero. What come to my mind is, when you're use Monero, you will be suspected for illegal use. But if you use Bitcoin with high privacy level, you will not be suspected for illegal use since Bitcoin is accepted in most of countries by follow their regulations.

Talking about privacy leaks of the user's ignorance e.g. honey pot explorer, VPN, no privacy web browser etc aren't related to usage of mixer.

Alright then,

Except for wasabi wallet whose coordinator zkSNACKs is a Gibraltar registered company according to multiple sources. Can you list for me among the existing Bitcoin mixers, ones that are registered with the U.S. Department of the Treasury's Financial Crimes Enforcement Network? Or any other regulatory body in any country they "Operate"?

Tbf, the chances of this happening is quite low comprared to most centralized exchanges and it's mainly because they don't comply with authorities. Mixers are designed for privacy and authorities will probably want everything to be recorded and analyzed similar to CEXs which would defeat the purpose of the service. Both offers a completely different service as well. you can't go on CEXs and expect to have the same level of privacy mixers offer.

One great thing about keeping up with the community is, if mixers did something unlike the nature of their service, the stories will likely spread out and they would eventually lose users who research.

The mixing teams are coders and developers they know how everything works so it's likely they know how to trace addresses this is mixing business and their business is privacy anonymization of addresses

There is not one answer and the answer is not general nor they will give the same answer but they know that this going to come while they are in operation, and some will likely cooperate because they are not in the business of conniving with hackers and scammers,
the easiest way to close your business by authorities is to help scammers getaway


They have a way to do that they are the developer of the platform, and developers always have something kept secret from their users this is for foreseeable circumstances.

If using a Bitcoin mixer poses the risk of funds being frozen or other adverse consequences, then what is the point of using Bitcoin Mixer? It would essentially be no different from using a centralized exchange. Additionally, since mixers do not comply with law enforcement, it is not surprising that they are often banned by authorities. Therefore, one should not rely on mixers to protect against stolen or hacked coins. While this may benefit scammers or hackers, it is simply a consequence of the decentralized nature of

i think yes, i'm not an expert but AFAIK if they don't know the deposit address then how can they remember the receiving address plus you asked if authorities have the hacker address (containing $300 million), they i think it does not matter whether mixer knows the deposit address or not because they already have the hacker account details and can detect whenever the hacker try to make deposit on Mixer.
I don't think so, because they might not co-operate with them you can take the example of latest ban on Coinmixer, did they co-operated? idk, But in my view if such illegal cases happens then at least these mixer should co-operate with them because at one side we talk about it's mass adoption and other side they don't want to co-operate with authorities, i think they should co-operate with them in vital condition like these and should take extra measures to keep other anonymous while exposing only the hacker account.
I don't think they can block addresses rather other than using blocklist for addresses, answer has many probabilities as if they co-operate with authorities then authorities will ask mixer to not block it in fact they will ask them to seize it idk if they can access the seized money, but by blocking it they will lose the chance to get access to stolen money back. And If they are not co-operating with authorities then they could block it because why would they need problems. Honesty is the best policy.

I think that Monero is the only currency that provides you with high privacy in a decentralized manner, Bitcoin is Pseudonymous and therefore trying to enhance this privacy through mixing is not a good idea because privacy is a continuous chain of operations, any weakness in this chain means a complete weakness of the chain and then it is easy to break Your identity, but the question is, who wants to break your identity.

Therefore, the use of mixers means that you will not guarantee that at some point your data may be sent to the government or that it may be hacked in another way, such as your use of bitcoin explorer with a vulnerability, VPN, web browser, cookies data, ...etc.

Though a mixer is something else than only mixing hacker's stolen Bitcoin, they would be considered as fraud if they cooperate FBI or any other in such a case. Mixers are supposed to break the link of input regardless of wherever the input came from. No mixer would look at where BTC has come from if they are linked with any hacker unless they are the same ChipMixer honeypot of the FBI  
However, mixers are centralized and they can do all these things including freezing your Bitcoin from the order of FBI.

I doubt that the authorities will contact a mixer and will instruct them to monitor bitcoins from an specific address. If so, there will be no closure from the mixers that they've taken down before and they'll just instruct them to be honeypot of most transactions and have logs of it.
We've seen this type of cooperation from the exchanges but haven't seen this happen from a mixer. And if ever that happens, that breaks the purpose of why mixers have been made.

Since the mixers are operating in the gray area - let's be honest, at least in theory they protect privacy of both honest users and possibly money launderers too - they may simply not care where the money comes from. Of course, this is probably the official reason some mixers are targeted by law enforcement too (and it's better to honestly say "I didn't care, so I didn't know").

On the other hand, a mixer is just a private business as any. The mixer owner may take certain steps without announcing that (from locking and returning the stolen funds to keeping track of the transactions), but, since such things can hurt the image of a mixer, we will never know a mixer's real stance on that.

So I think that you're expecting too much.

Any mixer that cooperates and listens to government demands shouldn't be trusted. Today the reasons could be that the money is stolen or hacked. Tomorrow, it could be because the owner is black, white, Jewish, Muslim, in the opposite party, anti government, too liberal, fascist, pro gay, young, old, American, Russian, Iranian... No censorship at all. A little bit of censorship opens the door to keep raising that bar in the future little by little. 

Wasabi's coordinator zkSNACKs works with an unnamed blockchain analysis company to surveil and identity UTXOs they consider "unwanted", "dangerous" or simply "tainted" in their own definition of those words. If the company tags certain UTXOs as such, they will be banned from coinjoining.

In that case, I would make them aware of the existence of this thread. PM the forum representatives you would like to hear from. But remember, it's all about image. None of them will tell you they will cooperate with any government investigation. What would really happen is something only they know, and it's not for the public.   

This is not the case. If you operate in the USA or any EU country, or any other, you are subject to the laws and authorities of those countries. It is another thing if those authorities try to send you a request and all they find is an email. But what you say is like saying that an illegal immigrant is not going to answer to the authorities of the country where he is because he is not from there.

Furthermore, little by little, as regulations advance, mixers will be required to have a licence, which will make them lose much of their meaning, or they will be declared illegal, so they will not be in the legal limbo they are in now, and for example, advertising them here will be illegal advertising, which will not be allowed. But hopefully that's still a few years away.

So, with respect to the OP's point, mixers can either cooperate, potentially losing customers (albeit for the right ethical reason), or not cooperate and potentially end up as a Chip Mixer.

The cooperation mechanism depends on the type of blender and how much information the government can gather about that blender and pressure them.

So far, I have not heard of a decentralized mixer, where there is no single central authority that controls the mixing, and therefore most of the mixers that are currently operating can be stopped if the owner of the mixer is known, and do not forget that some mixers are run by some agents to collect data.

Mixers are a way to enhance the privacy of an ordinary user, but when it comes to hacking multimillion-dollar, it is not easy to “launder that money.” Even if he succeeds in breaking the link between him and the crime, suddenly having $ 300 million or withdrawing that amount to your bank account is enough to raise suspicion.

Hacker attacks end either by negotiating with the authorities or arrest/kill, or they are sponsored by a state that supports this activity.

When the FBI contacts you, believe me, you have suddently something more important to do than cooperating with their request  
Especially when you operate a mixer.

Also, scammers are not so dumb. They can smell the smoke before the fire

Authorities doesn't even care when an exchange is hacked or mandate every exchange to block the address track the hackers' address once it deposit to an specific exchange. Exchanges do it by themselves for the community and at least help the victims to bring the money back to hacked exchange.

How much more to mixers where they are considered as "illegal" by the authorities, as if mixers will respond as well. Also i dont even think mixers follow the requests of exchange to block  the deposit from hacked address because it will contradict the sole purpose of owning a mixer business.

Lol, not like that obviously  
No mixer will ever respond to authorities because even they may get traced down and these authorities don't like mixers at all if I'm not wrong, and especially they won't respond if the authorities send a message in the way you described.  

Just in case, they try to get the specific mixer's email address for support or let's say, PM them here on Bitcointalk, will they ever address the authority's concerns about a hacker's address and that he may deposit to their mixer? And even ask the mixer to block that very address?

Then even if the hacker moves coins to various sources, it'll still be known because they're not getting mixed.

PS. I'm looking for mixing services to come to this thread and respond so that my confusion regarding the same gets cleared. I mean, if they're interested to reply here...

So how do Authorities go about it?

Like "Hey Yomix, please do not mix coins coming from this address, if you refuse to comply, we know where you are and we shall arrest you"  

I think the fact that almost all the mixers around are not registered financial entities or under any regulatory board, they are not answerable to any authority except maybe their customers.

The only choice authorities are left with is to investigate and crack them down.

They don't need to, except possibly with the controversial wasabi wallet. I understand they can block certain inputs from "blacklisted sources.

This is what exchanges do, highly unlikely for mixers to do such a thing if you read their privacy and no log polices. How do you promise people privacy but then reveal private customer information to the Government. Then that's not a mixer.

We all know about hacks, scams, password leaks and all the shit that's happening in the crypto world and we also see lots of scammers using mixers to eradicate the possibility of them being caught at all (though there are traces, but using mixer saves these scammers at the least, not intentionally).

Now, let's say that a hack happened some day at some exchange for about $300 million (or even $3 million, just e.g.), and the exchange immediately opens up about the hack. For a second, just think that the scammer keeps the coins in his wallet and doesn't move them for some time, however FBI and other major authorities are aware of this hack and they give orders to mixers that if a specific address is provided to the mixers (if they know exactly on which address the hacker has kept the coins), and they ask them to immediately report them about the same, then let me ask some questions:

1. Do mixers know where they're getting a deposit from?
2. If yes, will they co-operate here with the officials and let them know about the deposit?
3. If they do, how will they stop the scammer from moving his funds out of their mixer?