Topic: Will Bitcoin mixers be considered illegal by worldwide governments? (Read 1868 times)

Exactly. The main reason why governments are against Bitcoin mixers is because they can't benefit from them whatsoever. Since Bitcoin is a decentralized cryptocurrency, it gives the power to the people instead of middlemen or third-parties. Once coins are mixed, it's nearly impossible to revert back transactions. While governments are able to shut down centralized mixers, they'll be unable to confiscate mixed coins because of the decentralized nature of Bitcoin. Even worse, non-custodial mixers like TumbleBit and even Bitcoin Cash's CashShuffle, have no single point of failure making them difficult for governments to stop them. At some point, it's believed that mixers/tumblers would be considered illegal by worldwide governments as they present the excuse of people using these services for tax evasion.

As long as Bitcoin remains a fully transparent cryptocurrency, governments will be able to track & trace individuals for taxation purposes. And if it stays that way, expect Bitcoin to see the approval of worldwide governments within the future. Other cryptocurrencies which are private by default (like Monero and Grin) will be entirely banned by worldwide governments. The reason of this is obvious as governments don't want anyone to achieve financial freedom. They will always spread lies to the people about Bitcoin and other cryptocurrencies, related to criminals using these alternative payment systems for money laundering and tax evasion. With this false propaganda, it's no wonder why a large portion of people worldwide haven't adopted the pioneer cryptocurrency yet. Time will tell us what will be the fate of Bitcoin mixing services, as governments devise laws either in favor or against them. Just my thoughts

I think so, mixers are being used to money laundering by many scammers, that's a very common way because of its simplicity. However, it becomes really serious topic any many associations which want to fight with such activities. For instance Coinfirm, leader in AML reports and reclaiming crypto, which is a partner of Ripple (and Binance) in analyzing cryptocurrency transactions to see if they were mixed and rate their risk level for AML compliance reasons. Next year may bring many positive changes when it comes to crypto crimes.

I can see centralized mixers being subjected to some kind of KYC regulations. There have been instances of mixers being used to obfuscate the trail of stolen coins, but such instances are very few, Chainalysis has some data on that: https://bitcoinmagazine.com/articles/chainalysis-most-mixed-bitcoin-not-used-for-illicit-purposes.

Regarding decentralized mixers, Wasabi and Samurai wallets have something along those lines - this article might help shed some light on it - https://medium.com/cobo-vault/bitcoin-mixing-a-brief-research-into-centralized-vs-decentralized-390ea83fa6ad

The fact is that today the cryptocurrency market is not controlled by the government and any financial transactions can be performed anonymously, apart from those actions on cryptocurrency exchanges where the user provided his passport data.  But if we talk about buying shares or other financial investments, they are controlled in almost every state and thus laundering money received illegally thanks very hard, especially if there is no specific assistant official who can contribute to this.  The government is engaged in the fight against illicit trafficking of funds because they cannot control it and cannot profit from it.

I don't get the government stands on the money laundering part. There is a lot of ways where you can clean your money from dirty work like buying stock from the market. I guess in the end it's all about they can't benefit from it that is why they're banning it. And yes, if this continues to happen, bitcoin mixers are going to be considered as illegal by most of the world's government.

But we can't still remove the fact that it is being used in illegal activities that may become the reason for the government to ban it sooner or later. Even if there are so many people who only wanted to have a complete anonymity when doing gambling or any transaction even if it is not illegal, the government will only see its dark side. It is unfair but that's the reality.

The possibility of illegalizing Bitcoin mixers in their entirety looks more closer than we've thought. There have been many governments against decentralized cryptocurrencies like Bitcoin and Ethereum, while they only favor Blockchain technology itself. The US mainly, is extremely strict towards crypto and Blockchain technology looking for ways to stifle its growth. Last time, the US arrested a prominent ETH developer by giving a conference to North Koreans about Blockchain technology. The country believes that the technology underpinning Bitcoin and other cryptocurrencies is powerful enough for avoiding sanctions and performing other illegal activities. Most governments' concerns have been related to money laundering and tax evasion using crypto. A currency that they cannot control (such as Bitcoin or Ethereum) would be on their target list without a doubt.

That's why I believe that sooner or later, all centralized mixers will cease their operations within the mainstream world. The only thing that will prevail in crypto land will be decentralized services with no middleman. If people want to mix their coins or achieve privacy in their transactions, they'd have no choice but to use decentralized mixing services or non-custodial mixers. Luckily, we have TumbleBit, CoinJoin, RingCT, Dandelion Protocol, Mimblewimble, and ZK-SNARKS to achieve complete privacy over our transactions. That's more than enough to achieve financial freedom without governments' intervention. Since these technologies are decentralized by design, they can resist governments' attacks in every way (censorship-resistance). That's not widely possible with centralized Bitcoin mixers of today since they have a single point of failure.

Nonetheless, it's hoped that worldwide governments have a friendly stance towards crypto and Blockchain technology in general. As long as they're able to properly tax digital assets, they'll give the "green light" for the industry to grow without disruptions. Time will tell us the fate of Bitcoin as governments devise a regulatory framework that could either stimulate or stifle its growth within the mainstream world. Just my thoughts

It is actually not only made for evading illegal activities in the market. Some people want absolute privacy especially if they do really have allot of cryptocurrency. People knowing them spending too much would just put them in danger. That is why they need the mixers to fully secure their anonymity. In this case, if people want complete anonymity when gambling, then mixers are beneficial for them. Just for the sake of explaining why mixers are important and for us not to see it as something that protects illegal activities.

Sometimes it's a matter of jealousy from governments side where they want to tax everyone and can no longer do it from crypto perspective.
Other times are just protection against hackers, illegal activities and so on (bad decisions by people using it).

I aggree that in some cases there will be way more mixers shutdown if they are not regulated with some overcontrol by the government.
But i don't want them to become illegal and it will probabily not be that way.

That's certainly true, mate. There are very few mixers within the crypto space, probably because most people don't care about their privacy. There's a misconception that Bitcoin is anonymous, when in fact, it's not. Only people that are "paranoic" about government surveillance resort to mixers. But even so, privacy-oriented cryptocurrencies like Monero and Grin offer a better degree of privacy than Bitcoin mixers themselves. Considering that most of these privacy services are centralized, they're easy targets for governments worldwide. We've already seen how the number of mixers available within crypto land, have been declining at a fast pace. After bitmixer when down, there are now very limited options for people to mix their Bitcoin.

Speaking of government intervention, I believe that their next target would be ChipMixer itself. They could come up with an excuse (like money laundering and tax evasion) in order to shut down the mixer in its entirety (even when the mixer didn't perform any illegal activities). Which is why, no Bitcoin mixer that it's centralized will survive in this world. Luckily, there are decentralized solutions like TumbleBit and CoinJoin that would be of great use to Bitcoin if put up to the test by its own developers. Personally, I prefer TumbleBit as it proves to be much more efficient than CoinJoin in preserving one's privacy. Even the Dandelion Protocol fits the bill nicely in achieving said purpose.

So, even if Bitcoin mixers are shut down by the government in its entirety, there's always other means for people to protect their coins against massive surveillance. Thanks to the decentralized and open-source nature of Bitcoin, privacy solutions can be built on top of the main BTC blockchain without fear of censorship or downtime. Once governments realize that their efforts were in vain, they could either ban Bitcoin in its entirety or simply join its cause. All in all, privacy is just the tip of the iceberg as scalability tends to be a real issue within the BTC blockchain today. Just my thoughts

If the owners are willing to provide the logs then what is the use of advertising as bitcoin mixers, either they must advertise that they will be showing the logs if the authorities will approach them through a legal process and if that disclaimer is crystal clear for the clients who use their service then they can provide those details and everyone can use their service according to their terms. The problem with that is some government might target bitcoin traders because of ban in their country and if they produce court documents then you cannot release those sensitive information to those government and where do you draw the line is the question,

The end of the mixer is inevitable. If we want bitcoin to be more widely accepted, all of our mixers must be turned off. The mixer makes transactions more difficult to access, which also means that when hacked, we will never know where our bitcoins move. For the same reason, the anonymous cryptocurrency has been deleted by exchanges from their trading system.

Bitcoin mixers were widely available in the marketplace once and after the bitmixer drop out we are not seeing plenty of the mixers available and usage also had been reduced when we compare it from few years before now bro. Let's look for the market problems we are facing now.

For my opinion, the time has already passed when Bitcoin mixers were in full demand.  The fact is that almost every cryptocurrency user wants to legalize Bitcoin, because this will lead not only to the demand for cryptocurrency in society, but also to increase its status throughout the world.  Of course, the government will always look for the culprits of fraud and therefore the legalization of the cryptocurrency is inevitable in order to control the cryptocurrency market.  Therefore, you need to carefully monitor your actions and the services of those resources that we use.

That's certainly true, mate. Most countries didn't seem to care about Bitcoin first, due to the lack of mainstream adoption. Even now with many people using the pioneer cryptocurrency, some governments have paid attention to it while others have remained likely the same. For example, the US has realized how big crypto has become lately, taking action against the whole industry in general. The government's SEC have played a large part in the diminished growth of ICOs within crypto land. On the other hand, countries in the third world (like Venezuela and Colombia), don't seem to care that much about Bitcoin at all.

Still though, if Bitcoin continues to grow at an unprecedented rate in terms of mainstream adoption, then I believe that at some point worldwide governments will take action against it. Right now, mixers don't have a lot of people using it, which leaves them under the radar of most governments worldwide. Once these privacy services become viral, you could expect every government taking proper actions against them. After all, most Bitcoin mixers are centralized. If governments have successfully shut down Bestmixer, then they could do the same to Chipmixer and other popular services known to date.

What really makes governments' efforts in vain, is a decentralized solution for the whole mainstream world to use. If people start using decentralized mixers more thoroughly, then there would be no way to circumvent privacy at all. Governments and other third parties will have a hard time trying to destroy decentralized privacy solutions and Bitcoin itself. In the end, they'll either join the revolution or be left behind in the dust. Just my opinion

It's already hard enough for me without mixers to prove banks that how did i came up with my bitcoins while being poor. Lot's of banks here in Finland have closed their doors from bitcoin related companies, most likely because they don't want to be associated with criminal activities (of yeah, the irony).

It doesn't actually help me to introduce more layers to that process when they are not sure if it's from a drug trading or not.
This is also the reason i don't touch privacy coins. I am just afraid that they freeze my account for suspecting illegal activities.

I think that they will be illegal just to make things even harder for us. I am hoping not though.

Government banning bitcoin mixers is reasonable since most of the time mixers are used in illegal doings in the crypto world because it can make your transaction untraceable and if that money came from illegal thing like scamming or whatever it is, mixers are mostly used by money launderer scammers out there so it's totally fine if they ban or consider it illegal in the future.

Mixers are pretty much about covering the money trail of your crypto coins whenever you spend them, which means if the government or anybody is on that money trail..it means it goes cold as new coins are sent out to the specified wallet leaving all coins sent to other wallets which to be honest is something that the government will never support or legalize.

I dont think that would happen in the near future. Maybe some strict countries like China and the like will do it, but worldwide? No. Most of countries' government even didnt care about bitcoin. it is just that some people hype bitcoin so much that they think government hates bitcoin. I mean, I dont hate bitcoin, I love it so much that is why Im here but let's be honest, most governments really didnt care about bitcoin's existence.

It is just like what Bittorrent and Piratebay are doing as far as file-sharing is concerned. They are not breaking any laws by sharing the files themselves. But the users can make use of the software/website to share files that can breach copyright rules. Megaupload of Kim Dotcom was shut down due to the same allegation. It didn't helped that they never did any piracy on their own.

Let's just get it straight. I don't have any doubt that the majority of the coins that are mixed using these sites are "dirty" (i.e originating from exchange hacks, scams such as PLUS token, revenues from dark market drug trafficking.etc). Unless the owners of these sites can show the authorities that they are taking precautions to prevent the flow of such dirty coins to the mixers, they will be considered as illegal by the government.