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Author Topic: Will Bitcoin mixers be considered illegal by worldwide governments?  (Read 1506 times)
squatter
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August 10, 2019, 07:02:08 AM
Merited by vapourminer (1)
 #21

Mixers are otherwise perfectly legal (which was acknowledged by a blog of McAfee, a firm instrumental in the takedown) and I don't see that changing in the near future. Lawmakers don't ever talk about mixers and I would be surprised if majority of them knew mixers even existed. I could see mixers getting on their crosshairs if a single provider gets big and popular enough, but the service itself is so niche that even the most well known ones remain obscure to the general public.

Senators Feinstein and Grassley have tried twice (with some co-sponsor support) to re-define mixers as financial institutions. That would subject mixers to banking regulations, as ridiculous as that sounds. Nobody cared enough about cryptocurrency during the last couple legislative sessions for the bill to move forward, but that's probably changing. The FATF is just a veil for the US government, so we'll probably see a similar bill pushed by some very powerful people over the next year.

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August 10, 2019, 08:02:43 AM
 #22

They are going to have a hard time shutting them down, when they are hosted in a country with their own laws and regulations and complete sovereignty. Why do you think some illegal gambling operations are functioning from small islands in the Pacific?

Also, Mixer services will just adapt to the threat, by going decentralized or falling back onto creating more anonymous Alt coins that are already decentralized. So you are looking at a complex game of cat and mouse and the mouse has 1000's of little off-spring that would leave the nest, if the cat comes to close.  Wink

Remember, Cash is also anonymous in a way... so having a service giving you the same level of anonymity would not be deemed illegal in many counties. <You have a right to protect your financial interest>

Unfortunately there's a simple choice against that.

In the same way some wallets already have in their ToS (and checking!) that you don't use the coins for gambling, the reputed exchanges can add into their ToS that they don't accept Bitcoins coming from those mixers. Some will be able to go around that, but for average Joe it will be a deal breaker.

And again, average Joe will need a reputed exchange in order to get fiat from his Bitcoins if he wants to spend at the grocery store.


The chain may be broken when most merchants will accept Bitcoin. Then indeed, nothing can be done anymore. But isn't this maybe one of the things that makes Bitcoin acceptance at merchants increase this slow? (Of course, I sometimes tend to be concerned by things that are not a problem, and this may be such a case).

There will always be decentralized exchanges that would be willing to accept any coins, because those exchanges cannot be shutdown. You can also push those coins through online gambling sites, before you send it to exchanges. <There are many ways to bypass ToS restrictions>  Roll Eyes

Stricly speaking Mixer services are not illegal and if people want to go to court and defend this stance, then they will win. If I get cash from someone else and I spend it at a merchant, is that transaction anonymous or not? Why is mixing coins illegal, if you want to hide your wealth from hackers and thieves that might want to track your coins.  Roll Eyes

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August 10, 2019, 11:42:03 AM
 #23

In the eyes of governments around the world, coin mixers are infamous tools which facilitate illegal/underground activities. Since most mixers run parallel, both on the clearnet and a mirror on the dark web, it is a big giveaway that the coins linked with it are being involved in criminal activities. The so called untraceable funds are again used for similar purposes.


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August 10, 2019, 11:52:46 AM
Merited by Abiky (2), DdmrDdmr (1)
 #24

Stricly speaking Mixer services are not illegal and if people want to go to court and defend this stance, then they will win.

I think it's only a matter of time before things become a lot more demanding.

Centralised mixers are custodial services, even if it's for a very short period of time. It's clear that authorities have the desire to bring all custodians to heel. They'll argue that anyone in a position to receive and handle third party money must toe the line.

It doesn't matter whether you're complicit in money laundering, if your service has the potential to enable it you'll be expected to be just as uptight as Coinbase. Mixers in the form we're familiar with will have to go properly dark or properly corporate eventually.

 


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August 10, 2019, 11:53:55 AM
 #25

Here's the point we don't fully understand about Bitcoin. Bitcoin is decentralized. So technically nobody can forbid anything. We only need a true decentralized exchange, so we can completely runs our investment with transparently.

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August 10, 2019, 01:11:33 PM
 #26

If Money Laundering is the main excuse for closing down Mixers, then by the same rule of thumb at least the following industries should also be taken down:

- Banking
- Underground banking
- Futures
- Professional advisors
- Finance houses/building societies
- Financial transmitters
- Casinos
- Antique dealers/jeweller’s/designer goods suppliers
- Any internet based business
(see http://www.imlib.org/page9_bus_prone_ml.html).

It’s not really a Boolean decision, and they should not be demonized as a collective, but rather more on a case by case basis that study the degree of implication of all parties (corporation/platform, employees, customers, etc.). A boolean decision of a kind would have banned banks ages ago, and they they stand ...

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August 10, 2019, 03:25:20 PM
 #27

Mixers are helping in money laundering. This is what they are for, aren't they?
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August 10, 2019, 04:13:26 PM
 #28

There will always be decentralized exchanges that would be willing to accept any coins, because those exchanges cannot be shutdown. You can also push those coins through online gambling sites, before you send it to exchanges. <There are many ways to bypass ToS restrictions>  Roll Eyes

Stricly speaking Mixer services are not illegal and if people want to go to court and defend this stance, then they will win. If I get cash from someone else and I spend it at a merchant, is that transaction anonymous or not? Why is mixing coins illegal, if you want to hide your wealth from hackers and thieves that might want to track your coins.  Roll Eyes

Most gambling sites are also centralized and prone to being shutdown, depending where they operate. In that regard they are also like the exchanges and the mixers. Governments may at some point force them to inspect coins against some sanctioned list and who knows what criteria they will use for blacklisting.

Of course its not illegal, which is why they will explicitly make it illegal. Because those politicians write the laws remember? Its not about common sense or the people's needs, its about what they believe and their interests.

Bitcoin wasn't illegal anywhere, but some countries made it illegal, possession, mining, and trading. They are idiots and we already know that, but they have power over those places. And FWIW the same thing could be said about gambling, prostitution and drugs, just to name a few. Did you know in a certain Caribbean country homosexuality was illegal with 20 years prison? That was until last year when they finally rescinded that law. In some places its still a death penalty...

Never forget who makes those laws.

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August 10, 2019, 04:44:24 PM
 #29

We all know that the government hates anything they can not control especially the flow of money from one point to another point.  So there is a huge possibility that Bitcoin mixers will be considered illegal by the government.  I believe they are so wanting to shut them down but they cannot just close them without any legal reason.  They are just waiting for an opportunity to close these kind of establishment or some regulatory bills to be approved by the law making buddies to legalize any of their intentions to shutdown these kinds of business.
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August 10, 2019, 05:05:38 PM
 #30

Unfortunately Bitcoin mixers are apparently still used by hackers to obfuscate their funds.

Binance Hacker Still Laundering Stolen Funds through Mixers

According to Luxembourg-based cryptocurrency capital flow research team Clain.io, the hacker responsible for the May security breach is continuing to render his spoils untraceable with the usage of mixing services.

The Clain research team states that the 7,074 BTC of stolen funds are being laundered by means of mixing service Chipmixer. Clain reports that since June 12th, 4,836 BTC have been laundered through the service by the hackers. They also report that 814 BTC of the total 4,836 are likely to be confirmed as a result of the hack.

According to Clain’s report, Chipmixer had never before handled such high volume activity, leading the team to conclude that the majority of funds currently being outputted from Chipmixer stem from a single source: the Binance hacker. Chipmixer’s capital flow has spiked in weeks as shown in the image from Clain’s report:




https://en.ethereumworldnews.com/binance-hacker-still-laundering-stolen-funds-through-mixers/

 
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August 10, 2019, 05:08:50 PM
 #31

Still bitcoin isn't accepted by all over world governments. So we can't expect that they will accept bitcoin mixer. I think even bitcoin accepted by all over worlds government but they will not accept bitcoin mixer. Money laundering doesn't matter for that in my opinion. Still now people's using real money for crime more than crypto currency. But criminals would get benefits of mixer, that's why government would not accept mixer.

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August 10, 2019, 06:15:03 PM
 #32

It's only a matter of time, I believe. It already started with a lot of services being forced to do KYC to comply with AML regulations dealing with cryptocurrencies, else their license would be revoked or they'd receive some form of penalty. Governments don't like its people being sneaky to them, so there's really that huge chance wherein they'd ban mixers since they might find it as a way to launder money. Privacy coins might take a beating as well, although I can't fully understand how would they go on about it anyway.

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August 10, 2019, 06:23:36 PM
 #33

Unfortunately Bitcoin mixers are apparently still used by hackers to obfuscate their funds.

But they couldn't obfuscate the fact they use Bitcoin mixer, if government couldn't de-anonymize mixing activity or take control over the mixer, they'll force all exchange/services to black-list known output from mixing activity.

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August 10, 2019, 06:37:45 PM
 #34

Bitcoin mixers have a long history since they came into inception some time ago. They've been a viable alternative for people looking towards privacy within their Bitcoin transactions. While Bitcoin mixers are far from being perfect, they're still one of the best solutions for obfuscating transactions from third parties. The only concern would be that mixing services are centralized as they're provided by a middleman. In effect, this brings a single point of failure greatly defeating the purpose of privacy.

We've seen how Bestmixer got shut down by the authorities. They claim that Bestmixer encouraged money laundering activities which resulted in legal action. The truth is that Bitcoin mixers can be used for both good and bad things. Money laundering is mostly done with Fiat than with cryptocurrencies like Bitcoin or Ethereum. Still though, the perception of worldwide governments against mixers/tumblers seems to be different nowadays. Which makes me wonder whenever Bitcoin mixers will be considered illegal by such entities within the future?

If governments ban mixers/tumblers, then they could easily do the same to privacy-oriented cryptocurrencies like Monero and Grin. It's all a matter of power and control over people than anything else. What do you think about this? Huh
Do not confuse centralized mixers from anonymous cryptocurrencies.Upon any mixer you can impose a ban, alas, to impose a ban on anonymous cryptocurrency impossible.

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August 10, 2019, 06:42:58 PM
 #35

Unfortunately Bitcoin mixers are apparently still used by hackers to obfuscate their funds.

But they couldn't obfuscate the fact they use Bitcoin mixer, if government couldn't de-anonymize mixing activity or take control over the mixer, they'll force all exchange/services to black-list known output from mixing activity.

That's the logical trajectory we're on. Gemini already prohibits the use of mixers in its user agreement, presumably because they are already expecting a regulatory crackdown. I wonder how effective their analysis is, and how quick they are to terminate accounts. I believe we'll see other similar exchanges following suit in the not-so-distant future.

The next step after that will be for the white market exchanges to start shutting down accounts of customers who transact with non-compliant exchanges.

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August 10, 2019, 06:59:04 PM
 #36

Unfortunately Bitcoin mixers are apparently still used by hackers to obfuscate their funds.

But they couldn't obfuscate the fact they use Bitcoin mixer, if government couldn't de-anonymize mixing activity or take control over the mixer, they'll force all exchange/services to black-list known output from mixing activity.
Well you're right, it's a clever argument but I think it's technically rather difficult to detect "in live" if a transaction comes from a mixer or a legit service like an exchange, a custodial wallet, a gambling platform or any other thing. Moreover with some wallet like Electrum you can easily add several inputs and several outputs when you do a transaction.

 
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August 10, 2019, 08:34:59 PM
 #37

If this become a real problem, governments will do the same as exchange, these companies will have to inform KYC and all activities
With this, a mixer will not have any reason to exist, but it's a hard question to debate
I confess it's hard, but it's not the technology fault, people do wrong things

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August 11, 2019, 01:51:13 AM
 #38

Mixers are otherwise perfectly legal (which was acknowledged by a blog of McAfee, a firm instrumental in the takedown) and I don't see that changing in the near future. Lawmakers don't ever talk about mixers and I would be surprised if majority of them knew mixers even existed. I could see mixers getting on their crosshairs if a single provider gets big and popular enough, but the service itself is so niche that even the most well known ones remain obscure to the general public.

Senators Feinstein and Grassley have tried twice (with some co-sponsor support) to re-define mixers as financial institutions. That would subject mixers to banking regulations, as ridiculous as that sounds. Nobody cared enough about cryptocurrency during the last couple legislative sessions for the bill to move forward, but that's probably changing. The FATF is just a veil for the US government, so we'll probably see a similar bill pushed by some very powerful people over the next year.
I'm not really sure what you could define a bitcoin mixer as - they definitely aren't financial institutions, you definitely can't put them in the same industry as big banks. You'd probably need a new set of rules just for crypto activities and include mixers in that section.

Centralized mixers that are registered, etc, will be very easy to bring down. Decentralized exchanges, mixers and anything else are the only ones that are able to be safe from the regulations and still survive.

Anyway, I'd love to see what happens with mixers and their regulations, and how the governments deals with it.

 
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Herbert2020
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August 11, 2019, 05:18:35 AM
 #39

Anyway, I'd love to see what happens with mixers and their regulations, and how the governments deals with it.

i don't think the government can ever regulate mixers! by definition a mixer must remain unregulated. so all they could do is either shut them down and the mixers will either shut down or move away to somewhere that those governments can not touch them anymore.
and all this drama will only make things more decentralized. for example if they start shutting down mixers then things such as Coinjoin will become more popular, Anon coins like Monero would fly to the moon,...

bryant.coleman
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August 11, 2019, 05:40:23 AM
 #40

Looking at the current trends, it is difficult to believe that the US authorities are going to tolerate Bitcoin as a decentralized currency, and Bitcoin mixers are  further down the line. To put it bluntly, the government will never get comfortable to the level of anonymity provided by Bitcoin. Sooner or later, they are going to act against this. The mandatory KYC verification for exchanges is just the tip of the iceberg. In future, KYC will be mandatory everywhere, including wallets and crypto-related forums including Bitcointalk.

I don't know how many of the mixers have the required licenses and permits to operate. I doubt that the majority don't have any. Even those with the licenses may face hostile action from the government in the long term. Illegal mixers will be treated the same way as the authorities are treating the dark markets (such as Aplha Bay and Silk Road).
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