Can someone tell me if there's anything keeping mixers in dark from eavesdropping? So of I added 1200 nodes could I eaves drop on 50% of transactions?
50% of mixes, yes. It's a bit more complicated than that as far as following transactions, because mixing rounds are anywhere from 2-8 (or more if you want). So your chance of knowing who did what over # of rounds would be (% owned ^ n), which is quite small at 8 rounds even with 50%: 0.390625% chance (of recovering the information you're looking for specifically). Obviously if you're maintaining that %, you're going to find out
tons of info that you aren't necessarily looking for (or maybe you are if you're a TLA).
Another problem with this is if a masternode is deemed to be a MSB, or otherwise engaged in money laundering. For a discussion of US laws, see here:
https://bitcointalk.org/index.php?topic=421615.45000MSBs have to keep logs, which can be subpoenaed.
So if masternodes were generally considered to be MSBs or involved in money laundering, you would be relying on a masternode network that was either being opeated illegally, or in jurisdictions with lax enforcement of laws, neither of which should bring comfort.
Monero is interesting in this legal analysis as well. The Fincen guidance talks about "third parties" who are involved in the transmission of money needing to register, but exempts "users." "Users obtain virtual currency in order to purchase real or virtual goods and services." So one could argue that since there is no third party involved as with Darksend, people using Monero to buy goods are not breaking any laws.
I guess Fincen could take the position that with ring signatures, all the signing parties are somehow involved in each other's transmission, and thus merely using or mining Monero would be illegal. But its still more a stretch, and they would have to go after every user, rather than try and crack down on more centralized masternodes.
