Why not use Exchange instead of Mixer?

[SummerBliss]

So in short, it is very easy to do anonymous transfer by depositing funds on exchange and withdrawing to other addresses. Why to pay 1-3% fees on Mixers when it could be done for much less on Exchanges. Exchanges like Binance charge just 0.0005 BTC to process withdrawals.

You have a point in your argument, but exchanges require kyc which means that people can use exchanges only if they have funds from honest places. A criminal will not take stolen funds to exchange, he will take stolen funds to mixers, which is why I believe that in a few years governments will pursue the mixers more severely and I believe the punishment for executing a mixer may be as severe as possible. Note that most exchanges and even online casinos are asking people to do KYC and it won't be long before the wallets also make people do KYC

Agreed! More and more governments across the world are making it difficult for people to use cryptocurrencies without restrictions. Days are not far when mixers scope will be limited to very less countries. In my country, it is not possible to run a business like mixer. With time, more and more countries will start banning services like mixing.
Also, it is not correct to expect that people with dirty money will ever prefer Exchange over Mixers not matter how high are the fees.

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[bitbunnny]

I wouldn't say there is no difference if you use mixer or exchange. Although I beleive there is no more absolute anonimity in Bitcoin anymore, by using mixer you will get at least some privacy.
Exchanges are obliged to KYC, that is needed to run legitimate business and if any law enforcement agency requests such data they are obliged to give them, including the transaction history.

[o_e_l_e_o]

For example, you can deposit funds on Yobit, then create YoBit token and then redeem that token on other YoBit account and make withdrawals from that account. There you go, you are fully anonymous!

That is not even close to being anonymous. It will be completely obvious to anyone at YoBit exactly what you did, and they will be able to easily track your coins moving forward. Even people outside of YoBit would be able to be fairly confident that the coins were linked by looking at the size of the deposits/withdrawals. You should also assume that all exchanges are willingly sharing data with governments around the world because, well, most are. I'd actually say that your suggestion is less anonymous than doing nothing - you are giving YoBit data about your account names, email addresses, IP addresses, and deposit/withdrawal address which they otherwise would not have.

If big mixers like BestMixer can fall in the hands of authorities then just imagine how anonymous small mixers are.

Exchanges don't even need to "fall in the hands of authorities". They are quite willing to hand over your data whilst still operating. Just ask any of the thousands of Coinbase users now getting hounded by the IRS for tax money.

[mocacinno]

Exchanges don't even need to "fall in the hands of authorities". They are quite willing to hand over your data whilst still operating. Just ask any of the thousands of Coinbase users now getting hounded by the IRS for tax money.

Exactly, this was my main point... Sure, mixers *could* fall into the hands of the authority, they *could* be honeypots... However, exchanges usually have a direct link to the governement built-in as part of their procedure. The argument that it's better to use an exchange to mix your coins instead of a mixer because a mixer *could* be forced to hand over (hopefully nonexistent) logs in case they ever get traced is false (imho).

Using 2 or 3 mixers in a chain would decrease your risk even further, especially if you work over tor... As for the trust factor, do you know how many exchanges pulled an exit scam/went bancrupt/got hacked over the last couple of years? Don't trust anybody, that's the main idear...

[buwaytress]

Exchanges don't even need to "fall in the hands of authorities". They are quite willing to hand over your data whilst still operating. Just ask any of the thousands of Coinbase users now getting hounded by the IRS for tax money.

And not only are they quite willing, they have done it before and will continue to do it for as long as they're trying to cover their own asses.

I almost am tempted to talk about the incompetency of exchanges' own accounting systems and their shocking negligence in keeping compliant (if they were ever interested in doing that in the first place), but it's enough to say that they'll give up everything and anything -- even data they're not supposed to, as soon as the screws turn on them.

[nutella_11]

In my opinion, exchange is definitely better than mixer. But you need to find a great one, not every exchange is reliable.
Anyway, exchanges are safer, and you can trade there. Check out exchanges like Kraken or CoinDeal, these two are my favourites. In reference to CoinDeal, this is the most profitable exchanges for trading imo because they have free deposits and what's more - you can use Mistertango to deposit your funds in EUR (your funds will be settled in 3h).

[MetalGear]

So, Mixers provide service of shuffling bitcoins or provide addresses loaded with bitcoins along with private keys. In short, they provide service so to create anonymity between sender's and receiver's address so that no one can trace the transaction.
My question is why not use Exchanges? When we deposit funds on exchange, bitcoins get deposited on exchange's cold wallet. But when we withdraw funds, withdraw gets processed from exchange's hot wallet. So in short, it is very easy to do anonymous transfer by depositing funds on exchange and withdrawing to other addresses. Why to pay 1-3% fees on Mixers when it could be done for much less on Exchanges. Exchanges like Binance charge just 0.0005 BTC to process withdrawals.

 Mixers guarantees anonimity of the trader's address both the reciever and sender by breaking the links of both addresses making them essentially untraceable. Meanwhile, exchange requires log data, so if unfortunately the exchange got hacked and entered by hacker obviously your data will be put at an abvious risk including your bitcoin and the transactions that was supposed to be private. So why use mixers instead of exchange? It is simply because of the guaranteed anonimity of my identity, transactions, and address.

[serjent05]

Ofcourse I am talking about using exchanges without KYC. Binance allow unverified accounts to make withdrawals upto 2BTC per day which is quite ok.
About timestamps, who knows mixers too maintain logs of every mixing performed on their site. It is not difficult task in PHP to maintain such logs.

The transaction can still be traced even if you are using an exchange that does not require KYC.  They keep their logs of transaction unlike mixers which I believe clear their logs after sometime.  So that is the huge difference.

...but if you trust the mixer, it's much more anonymous than an exchange.

Yes, but there’s a higher risk of getting bitcoins from the mixer, which can be marked as “dirty”.

I think exchanges are not exempted to receive "dirty"  Bitcoin, they do not regularly check where these Bitcoin are coming from.  So from an exchange that does not require KYC, there is a possibility that this thing may happen.

[Decksperiment]

So, Mixers provide service of shuffling bitcoins or provide addresses loaded with bitcoins along with private keys. In short, they provide service so to create anonymity between sender's and receiver's address so that no one can trace the transaction.
My question is why not use Exchanges? When we deposit funds on exchange, bitcoins get deposited on exchange's cold wallet. But when we withdraw funds, withdraw gets processed from exchange's hot wallet. So in short, it is very easy to do anonymous transfer by depositing funds on exchange and withdrawing to other addresses. Why to pay 1-3% fees on Mixers when it could be done for much less on Exchanges. Exchanges like Binance charge just 0.0005 BTC to process withdrawals.

Choosing between exchanges and mixers depends on your needs such as the level of anonymity you prefer.  If you were just an ordinary crypto enthusiast who is not privacy centric and doesn't a need to hide any crypto transaction you might have, then you can choose the service of an exchange, otherwise, you need to use the services of Bitcoin mixers.

[Artemis3]

An exchange without KYC doesn't matter and doesn't really help. It can be easy to find which exchange your address belong to and since they keep your IP, etc... It can be enough to identify you because they will have no problem to snitch and will be very happy to do it.

Logs are kept a minimum, few days, exchanges store your information for years.

As far as I remember, BestMixer provided most of the mixing data to Dutch Authorities once they were confiscated by Dutch law.
We cannot rely on mixers too. They are not as anonymous as we think. If big mixers like BestMixer can fall in the hands of authorities then just imagine how anonymous small mixers are.
So it can be easily assumed when interfered by authorities, both exchanges and mixers can't be trusted.

Of course the mixer could be not keeping logs or erasing them after some hours, but the problem remains: How do you know?

If Bestmixer didn't keep logs, then after gov seizure they would find nothing and the only result would be one less company.

But the problem remains: How do YOU know? Who can audit the mixers? They cannot let you inspect the thing. Same can be said of exchanges.

The country where the service operates could simply order them to provide the data or else...

[bhabygrim]

So, Mixers provide service of shuffling bitcoins or provide addresses loaded with bitcoins along with private keys. In short, they provide service so to create anonymity between sender's and receiver's address so that no one can trace the transaction.
My question is why not use Exchanges? When we deposit funds on exchange, bitcoins get deposited on exchange's cold wallet. But when we withdraw funds, withdraw gets processed from exchange's hot wallet. So in short, it is very easy to do anonymous transfer by depositing funds on exchange and withdrawing to other addresses. Why to pay 1-3% fees on Mixers when it could be done for much less on Exchanges. Exchanges like Binance charge just 0.0005 BTC to process withdrawals.

It all depends on our needs and our capital.
Lets say mixer would just get 1-3% fee from using it while on exchange we would pay some transaction fee us well and if you would only send a small amount then using an exchange would cost you more,
And of course it would be different amount of fee in every exchange.

[gentlemand]

Depends on your purpose.

If you want to gamble or buy drugs then obviously an exchange is not going to work. If you just want to make sure no one who has your addresses can trace future transactions, other than the exchange, then you may as well use an exchange. I do it fairly often.

I would only do it with a place I was fully KYC'd on and had plenty of track record. And if you did it constantly they may eventually ask you to bugger off.

[darkangel11]

Exchanges will not protect your anonymity. Even using a casino is a better choice.

Using 2 or 3 mixers in a chain would decrease your risk even further, especially if you work over tor... As for the trust factor, do you know how many exchanges pulled an exit scam/went bancrupt/got hacked over the last couple of years? Don't trust anybody, that's the main idear...

At some point you should start thinking if it's worth it. You could use 3 mixers in a row but think of the cost. Only the richest people with the biggest transactions will go this far to protect their anonymity. You also have to trust the mixer enough and there aren't that many trusted mixers to safely shuffle your money between them. Especially if this is big money.

[Theb]

BTC is not made to be anonymous, and every service that envolves a third party is also not anonymous as you need to trust the third party (unless the third party can prove that there is absolutely no info retained about the service - not sure if this is feasible)
If you need privacy or anonimity, you need to look for privacy coins... not all of them provide a solid service, as there are also some coins like Dash that envolve third parties... I would check out monero, beam, veil, grin... and so on

But what will you choose to send and receive Bitcoins with a crypto exchange who has your KYC documents or a Mixer who can do the service for you without even knowing who you are? If you are smart enough and you really want to have the best chance to remain anonymous then you can go with the latter as that is just really your best option right now. Plus if you go with a mixer you won't have the common problems being faces by crypto exchanges when it comes to sending cryptocurrencies on a large amount like your transaction being hold, or certain flags being raise because of an unusual amount.

[pixie85]

Mixers are just better and this is why they exist and remain popular. It's not even about you being the good or the bad guy. It's good to be safer and if you can do it for a few dollars then why not?

You never know what will happen 2 or 3 years from now? What if exchanges decide they should not serve customers with coins coming from a big hack or scam and will have a software to easily detect coins that aren't mixed? What if one day the police asks you to explain all your transactions because you have stolen coins? I don't know what will happen but mixers aren't a bad thing for the ecosystem.

[mazdafunsun]

It is not anonymous if you do it on Binance or other exchange and you have done KYC.
The mixers are not doing their job, if I recall correctly there was a thread on this forum where it was described with sources that mixers can be easily cracked with simple analysis.

[squatter]

simple: mixers are created to provide you anonimity, exchanges are not...

Exchanges usually require KYC info, they keep logs of all addresses, ip's, timestamps,... Mixers promise to do none of these things.

Ofcourse I am talking about using exchanges without KYC. Binance allow unverified accounts to make withdrawals upto 2BTC per day which is quite ok.

Binance regularly works with law enforcement agencies and regulators. They also hire blockchain analysis companies like CipherTrace to analyze customer activity. If they flag your inputs or activity as suspicious, they freeze your funds and demand KYC from you.

Mixers don't do any of that.

Exchanges like Binance are fine for things like obfuscating the source of gambling withdrawals. Withdrawing directly from a sportsbook to Coinbase, for example, would put your Coinbase account at risk of closure. It's not against Binance's terms, though, so they're a fine intermediary in this case.

However, I wouldn't risk sending DNM bitcoins or otherwise tainted bitcoins to Binance. That's asking for trouble.

[hatshepsut93]

You can in certain situations use exchange after a mixer to make your coins look more innocent . Let's say a country outlawed mixers and made a regulation that doesn't allow local exchanges to accept coins from mixers, and they are able to detect that coins come from mixers. If you have an access to some foreign exchange that doesn't have your KYC data, you can send your coins there after mixing and withdraw, and then deposit to your local exchange - they shouldn't be able to tell if your coins were at some point mixed, to them it would look like they come from an exchange. Of course they still would be able to ask that exchange directly about your deposits, but chances are their request will be refused.

[adzino]

So, Mixers provide service of shuffling bitcoins or provide addresses loaded with bitcoins along with private keys. In short, they provide service so to create anonymity between sender's and receiver's address so that no one can trace the transaction.
My question is why not use Exchanges? When we deposit funds on exchange, bitcoins get deposited on exchange's cold wallet. But when we withdraw funds, withdraw gets processed from exchange's hot wallet. So in short, it is very easy to do anonymous transfer by depositing funds on exchange and withdrawing to other addresses. Why to pay 1-3% fees on Mixers when it could be done for much less on Exchanges. Exchanges like Binance charge just 0.0005 BTC to process withdrawals.

You can't use an exchange as a mixer because of the limits set by the exchange. If you will want to increase your limit or remove your limit you will have to verify yourself. This means that you will have to provide identification documents to the exchange. So you can eventually be tracked anyways. As far as I know, in a mixer you don't have to provide kyc stuffs and you also don't have any limits.

[Zeke_23]

So, Mixers provide service of shuffling bitcoins or provide addresses loaded with bitcoins along with private keys. In short, they provide service so to create anonymity between sender's and receiver's address so that no one can trace the transaction.
My question is why not use Exchanges? When we deposit funds on exchange, bitcoins get deposited on exchange's cold wallet. But when we withdraw funds, withdraw gets processed from exchange's hot wallet. So in short, it is very easy to do anonymous transfer by depositing funds on exchange and withdrawing to other addresses. Why to pay 1-3% fees on Mixers when it could be done for much less on Exchanges. Exchanges like Binance charge just 0.0005 BTC to process withdrawals.

You can't use an exchange as a mixer because of the limits set by the exchange. If you will want to increase your limit or remove your limit you will have to verify yourself. This means that you will have to provide identification documents to the exchange. So you can eventually be tracked anyways. As far as I know, in a mixer you don't have to provide kyc stuffs and you also don't have any limits.

mixer provides anonymity to its users by spending a small percentage from your transaction, without having a limit you remain anonymous. while in an exchanger, you can generate new address but I know it has a limit, unless you do KYC like what you have mentioned. they prefer to use mixer due to its use of service.