Will Bitcoin mixers be considered illegal by worldwide governments?

[squatter]

I have a feeling they will especially after BestMixer was seized by the Dutch Financial Intelligence and Investigation service.

The circumstances of that case are reminiscent of the Hansa darknet market shutdown in 2017, also compromised by the Dutch police. In fact, I wouldn't be all that surprised if Bestmixer was actually a honeypot run by the Dutch police.

History shows that any questionable service should keep their servers far, far away from the Netherlands.

[1714187306]

1714187306

[killat]

If cutting off electricity for miners would be a solution, or even possible, why don't the goverments turn off electricty for black hat hackers? I think you don't understand very well how electricity, the internet and goverments work.

As for making something illegal to trade with cash, that's even dumber, it would only raise the price of bitcoin more. Trading cash for drugs is illegal, that's why morphine costs pennies if you have a prescription but it costs a lot of $ in the streets.

[Abiky]

Anonymity on the Bitcoin mixer platform makes it difficult for authorities to track down people who act as money launderers from hackers or corruptors. Of course the government cannot stay silent. There may be times when KYC is needed for large transactions as a solution to the anonymity problem for security.

That's certainly true, mate. Based on this perception, we could say that Bitcoin mixers are a double-edged sword. It can be used for both good and bad things. Criminals will always look for ways to launder their money, and Bitcoin mixers prove to be the ideal solution for them. However, this privacy technique is also convenient for preserving people's privacy among transactions made on the Bitcoin blockchain from prying eyes. Still, the government doesn't seem to understand this, as it's mostly concerned about the negative implications related to Bitcoin mixing services.

Considering that centralized mixers don't comply with KYC/AML laws, they'll be easily targeted by governments worldwide. If these services want to continue their operations, then I guess that they'll have to implement KYC in the same way as Shapeshift did. Only then, governments will be able to open the path for centralized mixers as they require identity verification for every individual using them.

Despite this, the only way to achieve full-fledged privacy would be towards the decentralized route. Non-custodial mixing solutions would prove to be the ideal solution against oppressive governments worldwide. Slowly but surely, this is being implemented, where people have a choice to preserve their privacy without the need to comply with KYC. With CoinJoin-enabled wallets (like Wasabi and Samourai), CashShuffle (for Bitcoin Cash), and even TumbleBit, it'll be possible to mix your coins in the most decentralized way possible effectively removing the middleman.

Nonetheless, time will tell us whenever crypto will truly stand against restrictive governments for a long time. So far, they've done everything within their power to stop this revolution from happening within the mainstream world. But, their success will depend on how many people will allow them to take control of the decentralized realm. By the looks of it, most crypto services are largely centralized which is considered something bad as it enables a single point of failure (making these services easy targets for governments worldwide). Hopefully, more decentralized solutions would appear that would counteract the effects of restrictive regulations worldwide. Just my thoughts

[amishmanish]

There are two sides to this. There are people who would say, with enough precaution, you can do what you want by making yourself anonymous, hiding behind VPN etc etc. Yet, time and again, haven't we seen that if enough time is spent by them, the authorities do get to even the most well hidden entities?

you're giving law enforcement agencies too much credit.

think about it. you hear about cases where people were arrested/convicted, services taken down. you don't hear about all the cases where the authorities hit nothing but dead ends and couldn't identify or arrest anyone.

Does it matter to them figmentofMA if we give them credit or not? It doesn't change the fact that they are the one authorized to use batons, tap your communication and knock down doors. For people to run viable businesses on BTC or be their customers, they will all have to be on the right side of the law.
Nobody wants to do a business constantly looking over their shoulder. Of course a lot of people do just that but that isn't sustainable in the long run. Can BTC remain a currency which is only for the dare-devils who can hide themselves behind dead-ends?

[gentlemand]

https://bitcoinmagazine.com/articles/chainalysis-most-mixed-bitcoin-not-used-for-illicit-purposes

Less than 10% of coins are mixed for illicit purposes according to that, though who knows whether the people claiming it have the slightest clue. Privacy is the number one inspiration for its use.

[Kelvinid]

Keeping anonymous is likely we want to and keep it with the help of Bitcoin mixers but some of them illegally operated by scammers and hackers. Will it have to understand some governments banned crypto and have to expect also that some of Bitcoin mixers aren't recognized by the government.
Just like it happen to these https://www.zdnet.com/article/bestmixer-seized-by-eu-police-over-laundering-of-200-million-in-cryptocurrency/.

[iMark]

Anonymity on the Bitcoin mixer platform makes it difficult for authorities to track down people who act as money launderers from hackers or corruptors. Of course the government cannot stay silent. There may be times when KYC is needed for large transactions as a solution to the anonymity problem for security.

I think so, when regulations are made, of course KYC will be applied in various online wallets and exchange sites. mixer which is a means for money laundering will certainly be closed and prohibited its use. that's a very obvious thing, but is it possible that just a ban can make the mixer stop being used by many users?

[izanagi narukami]

The problem is not on the mixer but crypto itself.
When my government heard about crypto mixing , it's really annoying because the corruptor will have the advantage for using it !

[yoseph]

Anonymity on the Bitcoin mixer platform makes it difficult for authorities to track down people who act as money launderers from hackers or corruptors. Of course the government cannot stay silent. There may be times when KYC is needed for large transactions as a solution to the anonymity problem for security.

I think so, when regulations are made, of course KYC will be applied in various online wallets and exchange sites. mixer which is a means for money laundering will certainly be closed and prohibited its use. that's a very obvious thing, but is it possible that just a ban can make the mixer stop being used by many users?

The main question the financial authorities asks themselves is why would one engage in a service that makes their transactions anonymous to third parties and the answer is that they have something to hide that's why but with authorities going after bitcoin mixers, they should also look at monero which OP said highly anonymous. I am sure if the Bitcoin Mixers implement KYC it would help with all the negativity towards their services.

[tranthidung]

We've already seen a mixing service getting shutdown by authorities in Europe, I think there's very high chance it will happen again. More likely, it will be a part of some global regulatory framework, they can try to forbid all services from accepting coins from mixers if there will be an easy way to tell if a coin comes from mixers or not.

But on the other hand, I think governments understand the value of privacy, usually they want to be the only one's with backdoors. In the last year there was an article how Canada advised people how to buy weed privately, because the US was taking action against people who did it even in other countries. So, regulating mixers is another option, forcing them to keep records and share them with authorities.

From what theymos wrote in his guide: [Guide] Decent mixing methods. The probability to see mixing services discovered by authorities, and shut them down is not too low. He mentioned that even ChipMixer (it seems the best mixing service for now) can be shut down. In addition, mixing services do not truly provide full privacy for their customers, as they always promised.

Most "tumblers", like the now-defunct bestmixer.io or even ChipMixer, aren't great because they are needlessly expensive, you're trusting the service not to run away with your coins, and you're trusting the service not to keep logs. Maybe they're the best current solution for small amounts where lasting anonymity isn't mission-critical, but in most cases you shouldn't use them.

Anonymity is very difficult, especially with blockchain-based systems where so much data has to be public, but also in other areas (eg. there are several known weaknesses with Tor). You should always operate with the expectation that any anonymity system you use will eventually fail you. If you're ever confident in your anonymity, then you're wrong.
< ... >

[bernardos]

Whether you mix your Bitcoins or not, the moment you convert them to fiat currencies and send them to your bank or credit card, and most people do this sooner or later, your government can track you and there is now a name and a face associated with those coins. Anything that makes laundering money easier is a target for government agencies and bitcoin mixers can be used as such.

[LeGaulois]

...

So you expect to see a mixer (supposed to anonymize you) applying a KYC legislation? That doesn't make sense in any way.
Whoever uses such service does not necessarily mean he has something to hide, as well that doesn't mean he's doing anything illegal.

It's called having the right to privacy because people don't need to know what you do with your money. What would you say if your bank account history was accessible to everyone on a monthly basis?

[Oyarebu]

The government will eventually ban cryptocurrency mixers and pronouns them illegal. This may not be now but its a thing we all should wait for in the future if cryptocurrency. Now that most countries have developed interest in creating their own cryptocurrency, we should underrat the control that will come from the government.

[tranthidung]

The problem is not on the mixer but crypto itself.
When my government heard about crypto mixing , it's really annoying because the corruptor will have the advantage for using it !

Mixers are not bad or shady, only people whom use mixing services are bad. Bitcoin has to face with the same thing, bitcoin itself is not bad, only bad people whom used bitcoin for their shady things, money laundering are bad. They, in turn, affected reputation of bitcoin. If you search Bitcoin + Fraud (as key word), abundant results on Bitcoin is a fraud will be shown on your computer screen.

[nydiacaskey01]

Unless someone would state an actual example that it (Bitcoin Mixer) was used in an illegal transaction that's the time that they (Government) will start to consider or think of banning Bitcoin Mixers. Even if Bitcoin Mixer will be banned, those with criminal minds will still think of another way of how to launder their dirty money.

[yazher]

Mixers can't be mixers if they followed government rules and show their client identity. as long as they remain hidden and anonymous the governments will not let them do what they want that's why they are being shut one by one.

we see that they already shut big-name mixers but it's not an easy Job because shutting one of the best mixers right there is took a long time to shut down, like best mixers.

[Abiky]

From what theymos wrote in his guide: [Guide] Decent mixing methods. The probability to see mixing services discovered by authorities, and shut them down is not too low. He mentioned that even ChipMixer (it seems the best mixing service for now) can be shut down. In addition, mixing services do not truly provide full privacy for their customers, as they always promised.

Exactly. This applies especially to centralized mixing services as they provide a single point of failure to the crypto space. Which is why, I believe that the only way to obtain true censorship resistance for mixing coins would be via the decentralized route. We already have alternatives towards current centralized mixing services such as Wasabi Wallet, Samourai Wallet, and even Bitcoin Cash's "CashShuffle". By doing mixing at a protocol level, you take down the possibility of government's intervention within any point in time. This will prove to be ideal for people looking to preserve their privacy in order to protect their funds from prying eyes.

However, it's a double-edged sword as it proves to be extremely beneficial for criminals too. The only reason why criminals have used Fiat more than crypto for money laundering is because Fiat is stable in price. Once crypto's volatility in price comes to an end, then I believe that the space will become more attractive for these wrongdoers. After all, we not only have decentralized mixers, but also privacy-oriented cryptocurrencies like Monero and Grin. If government's efforts towards stopping the crypto revolution tend to become in vain, then they will join this trend no matter what. As a result, it will up to be people themselves to make good use of the crypto ecosystem in a responsible manner by preventing unwanted activities at all costs. Just my thoughts

[figmentofmyass]

I believe that the only way to obtain true censorship resistance for mixing coins would be via the decentralized route. We already have alternatives towards current centralized mixing services such as Wasabi Wallet, Samourai Wallet, and even Bitcoin Cash's "CashShuffle". By doing mixing at a protocol level, you take down the possibility of government's intervention within any point in time.

you're right, but the market is in a transitional state because decentralized tumbling methods don't always have adequate liquidity---cashshuffle in particular. someone looking to do high volume tumbling might use coinjoins in addition to multiple centralized mixers.

i'm excited for schnorr signature aggregation because it'll create new economic incentives (fee savings) for people to participate in coinjoins.

[Natalim]

I think if there is a standard law that will be followed, mixers will be considered illegal since it's the best tool to do money laundering.
Though we are fighting for our right here that mixers helps us to make our transactions anonymous and we want privacy that's why we are doing that, but the government are looking on the bad side which is the money laundering using the service of mixers.

Like the Anti Money Laundering Act or AMLA, the rules are standard so it's easy for the implementer to impose it.
Most financial service now are required to conduct KYC on their clients, and that's completely opposite to the service of mixers.

[figmentofmyass]

I think if there is a standard law that will be followed, mixers will be considered illegal since it's the best tool to do money laundering.
Though we are fighting for our right here that mixers helps us to make our transactions anonymous and we want privacy that's why we are doing that, but the government are looking on the bad side which is the money laundering using the service of mixers.

most governments won't make them illegal. what they'll do is classify them as financial institutions or money transmitters, subjecting them to AML/CFT regulations. the only way for mixers to comply will be for them to implement full KYC---laughable of course. once mixers refuse to comply, governments like the USA will have a legal basis to come after them.