Hackers and their use of mixing services

[o_e_l_e_o]

If I ran one any directly traceable stolen funds would be going straight back along with instructions as to where to ram their monies.

It's not quite as simple as that, though. If you want to refuse to accept stolen coins, then for every deposit you accept, other than highly publicized media cases, you are going to have perform blockchain analysis on it to ascertain who deposited it and where it came from, which defeats the entire point in the first place. It also sets the precedent that you may refuse coins which are deposited to your service if you ascertain them to be "tainted" in some way. That all defeats the very point of a mixing service. I'm not doing anything illegal, but I'm certainly not going to use a mixer if I know they are spending time trying to analyze my deposits and identify my coins.

People tend to always focus on the negative aspect of mixing and whatnot, while they completely forget that the same privacy hackers enjoy, is also beneficial to all of us normal folks. Criminals use what they deem useful (Bitcoin, cash, gift cards, prepaid debit cards, Gold, etc) and whatever they deem useful is also useful to us.

Exactly. Whenever governments or corporations try to "ban encryption" or some other such nonsense, such as Facebook putting backdoors in to WhatsApp so they/law enforcement can still read all your messages despite their "end to end encryption" lie, I always make the same argument: Only the stupidest of criminals are going to communicate on a platform they know is being monitored. They will simply move to other platforms, or in some cases, build their own. Both Al-Qaeda and ISIS were known to build their own encrypted messaging software, and the initial developer of TrueCrypt was a drug cartel leader. It's cliche, but if you make privacy illegal, then only criminals will have privacy. The same is true of mixers and other bitcoin privacy services. Criminals are always going to find ways to cover their tracks and launder money. If you make coinjoin or mixing illegal, then only innocent people suffer.

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[Slow death]

This type of article is very funny... when someone invented the knife I believe that the person invented the knife for people cut food. But how many times we watch news that someone took a knife and killed other people?? People created a mixer to promote privacy of other people, if someone uses it to commit a crime, I believe that the blame should not be on the mixer, the fault is of the person who uses the mixer for bad things

[coinfinger]

I've already think that this would happen a few years back, however they can't mixed a large amount of stolen bitcoin since for what I've known mixers only have a minimum amount to be mixed a day.

But this is the first time I heard that it was really used by the hackers, well maybe I just didn't focused on news that's why maybe I missed some news regarding this kind of matter and if this is the case I don't think we're be able to track them down.

I do not really agree with you that the mixers have a minimum amount of limits to mix the coins. These mixers can even mix larger amount of coins instantly. There is not a single mixer for which the hacker has to rely onto to mix his coins each day in some intervals, but instead there are a number of mixers which would allow the hacker to mix all his coins in a single day and keep on mixing them until they leave no track behind.

This has attracted a lot of hackers and scammers into the field of blockchain as they feel these transactions are secure for them. There some be some aid for this problem. This is what keeps bitcoins or any other cryptocurreny far away from getting legalized.

[sheenshane]

snip-
This has attracted a lot of hackers and scammers into the field of blockchain as they feel these transactions are secure for them. There some be some aid for this problem. This is what keeps bitcoins or any other cryptocurreny far away from getting legalized.

No one will be hacked and no will be scammed if we tighten our security level and also those weak exchanges should high their security level, that is our responsibility. So we blame Bitcoin mixer because we feel that they are helping hackers to hide their identity, no, that is the wrong perception. Many things might be abused but Bitcoin mixing isn’t for fraudsters. The purpose of having Bitcoin mixing are these, for the privacy, security, and convenience of using it.

But the fact no one will become pseudo-anonymous transactions now, Yes, bitcoin transactions can be tracked.

[Timelord2067]

You might be sending mixed (no pun intended) messages by both promoting a mixing service in your signature at this time and also posting observations about how those same services can be used for evil instead of niceness...

[Bttzed03]

The blog linked in the OP says that Lazarus Group (referenced in the OP chart) specifically was using CoinJoin more frequently. The analysis does not break down a mixer verses CJ transactions.

I haven't seen any of the data that Chainalysis used/looked at, but I presume Lazarus started using Wasabi Wallet, and is comfortable with its privacy. If this is true, they are probably comfortable with the privacy from Wasabi when all outputs are equal, except each person's change.  

It's an excerpt from their 2020 Crime report. They said they'll release the full version late this month. You can subscribe to their mailing list if you wan tto get a copy. I guess that's where they will include all the details you are looking for.

~
Also, to comment on the release in specific: Isn't it a little weird how they're tracking such a big increase from one year to another for mixing? I get a feeling that the scope of this research might be a little narrow... Not to blame them, it's a vast amount of data an parameters, but I doubt they had comparable data to indicate a reliable increase from year to year.

Yes, I was hoping someone would also point this out as I was also wondering how they were able to come up with the figures.

You might be sending mixed (no pun intended) messages by both promoting a mixing service in your signature at this time and also posting observations about how those same services can be used for evil instead of niceness...

I already had this thought even before I applied for the campaign. As I mentioned in my previous reply, I consider wallets with coinjoin features and mixing services as mere tools that are both available to legit users and hackers. I was thinking of the same knife analogy mentioned by @Slow death

[ReiMomo]

Just a quick question since I do not quite have knowledge of mixing coin or bitcoin tumbler process.
In a mixing service, how many times they will tumble the coins before it will be done?
The second one is, is there a possibility that a mixer company will tract any transactions they had. This case perhaps they will help to solve hacking incidence if hackers used their service.

[TheGreatPython]

Mixing services are really causing a pain in the neck. A lot of mixers are been introduced which might be giving a boost to all those hackers to convert their hacked funds into unknown funds which would than make it easy to get whitelisted.

Mixing services tend to keep the cryptocurrency transactions more secure and anonymous. Even it might be possible to track the transactions underwent through the mixers but if by any chance the hacker uses multiple mixers to mix the same coins than it would never be possible for us to track the transaction. In this case, we have no options left. The mixers too can't shut down just for this reason as there also are some legitimate use of such mixers.

[shield132]

Personally I appreciate why smart bitmixer's owner was, this person is great. He created the most amazing mixer and also he closed it himself. To make it more clear, only in 2015 year bitmixer was roughly mixing up to 60K-70K coins monthly (they launched service in 2014 year). Then in 2016, bitmixer owner stated himself that their website mixed 1 million coin. So what do you think, how many people were using it for just protecting their privacy during online shopping? I think maybe some percent only, max 4-5%. See how many websites were seized and how many still aren't and how many things are done without websites via different messengers.
Nowadays mixers aren't used for good purposes, it may was in 2014-2015 year just for the interest of mixer.

[jostorres]

Personally I appreciate why smart bitmixer's owner was, this person is great. He created the most amazing mixer and also he closed it himself. To make it more clear, only in 2015 year bitmixer was roughly mixing up to 60K-70K coins monthly (they launched service in 2014 year). Then in 2016, bitmixer owner stated himself that their website mixed 1 million coin. So what do you think, how many people were using it for just protecting their privacy during online shopping? I think maybe some percent only, max 4-5%. See how many websites were seized and how many still aren't and how many things are done without websites via different messengers.
Nowadays mixers aren't used for good purposes, it may was in 2014-2015 year just for the interest of mixer.

Currently mixers are been used by maximum community who have scammed someone and now want their bitcoins to get mixed up so that it might never be possible for anyone to catch them. Also most wider use of mixers are been done on the deep web or dark web where almost each of the site used a bitcoin mixer in order to mix their transactions. That is where the maximum illegal funds gets rolled into bitcoins and also spoil the reputation of bitcoin.

Mixers give boost to such illegal platforms and hence there are a lot of mixers which were been forcefully shutdown by the legal authorities. Bitcoins are naturally anonymous which makes tracking the transactions a bit difficult(but not impossible) and these kind of mixing services literally make tracking the transactions almost impossible.

[AdolfinWolf]

Personally I appreciate why smart bitmixer's owner was, this person is great. He created the most amazing mixer and also he closed it himself. To make it more clear, only in 2015 year bitmixer was roughly mixing up to 60K-70K coins monthly (they launched service in 2014 year). Then in 2016, bitmixer owner stated himself that their website mixed 1 million coin. So what do you think, how many people were using it for just protecting their privacy during online shopping? I think maybe some percent only, max 4-5%. See how many websites were seized and how many still aren't and how many things are done without websites via different messengers.
Nowadays mixers aren't used for good purposes, it may was in 2014-2015 year just for the interest of mixer.

Currently mixers are been used by maximum community who have scammed someone and now want their bitcoins to get mixed up so that it might never be possible for anyone to catch them. Also most wider use of mixers are been done on the deep web or dark web where almost each of the site used a bitcoin mixer in order to mix their transactions. That is where the maximum illegal funds gets rolled into bitcoins and also spoil the reputation of bitcoin.

Mixers give boost to such illegal platforms and hence there are a lot of mixers which were been forcefully shutdown by the legal authorities. Bitcoins are naturally anonymous which makes tracking the transactions a bit difficult(but not impossible) and these kind of mixing services literally make tracking the transactions almost impossible.

There are so many things wrong with what you're saying that i don't know where to start.

Yes, bitcoin mixers are used by criminals, but by far the most people using them are simply privacy-oriented persons, https://bitcoinmagazine.com/articles/chainalysis-most-mixed-bitcoin-not-used-for-illicit-purposes

There have only been 2? 3? mixers that were shut down, the others either exit scammed or closed down themselves.

Bitcoins are naturally anonymous which makes tracking the transactions a bit difficult(but not impossible) and these kind of mixing services literally make tracking the transactions almost impossible.

They are quite literally the opposite of anonymous. Every bitcoin leaves a clear "trace" which can be chained to a person on each and every offramp (exchange).

[SquallLeonhart]

Legitimate uses of these kind of mixers were stopped long ago. In the early 2014 to 2015 these kind of mixing services were been used to keep the money anonymous and out of reach of hackers or scammers but after that time, mostly the hackers and scammers are the ones who use mixing services. These kind of services might perhaps not be needed anymore because we people earning from legitimate source should never worry about the origin and destination of our funds.

We should always be confident about our funds. It should not be us who are motivating the use of mixing services. Sometimes I even think why are these kind of mixers even needed if they support blacklisted people who have intentions to scam or hack and nothing more. These kind of mixing services are giving boost to such people.

[AdolfinWolf]

Legitimate uses of these kind of mixers were stopped long ago. In the early 2014 to 2015 these kind of mixing services were been used to keep the money anonymous and out of reach of hackers or scammers but after that time, mostly the hackers and scammers are the ones who use mixing services. These kind of services might perhaps not be needed anymore because we people earning from legitimate source should never worry about the origin and destination of our funds.

We should always be confident about our funds. It should not be us who are motivating the use of mixing services. Sometimes I even think why are these kind of mixers even needed if they support blacklisted people who have intentions to scam or hack and nothing more. These kind of mixing services are giving boost to such people.

Again such a stupid post based on nothing but your “experience”.
 If you had just looked at my previous post it would have been obvious that there is at least the possibility *some* users of mixers are in fact not immoral/criminals.

I’m dumbfounded by your arguments against mixers.

Perhaps not be needed anymore because we people earning from legitimate source should never worry about the origin and destination of our funds.

We should always be confident about our funds. It should not be us who are motivating the use of mixing services.

Do you have any clue what bitcoin is about?

[stompix]

Currently mixers are been used by maximum community who have scammed someone and now want their bitcoins to get mixed up so that it might never be possible for anyone to catch them. Also most wider use of mixers are been done on the deep web or dark web where almost each of the site used a bitcoin mixer in order to mix their transactions. That is where the maximum illegal funds gets rolled into bitcoins and also spoil the reputation of bitcoin.

I really think we should start by closing down exchanges that are not requiring KYC for deposits and withdraws under a certain amount.
After all, it's not mixers that are the ones swapping "illegal" funds into fiat, right?

Legitimate uses of these kind of mixers were stopped long ago. In the early 2014 to 2015 these kind of mixing services were been used to keep the money anonymous and out of reach of hackers or scammers but after that time, mostly the hackers and scammers are the ones who use mixing services.

I'm having problems understanding how mixing your coins is protecting you from scammers.
Was there some process implemented in mixers where for every satoshi mixed you get a new brain cell?

These kind of services might perhaps not be needed anymore because we people earning from legitimate source should never worry about the origin and destination of our funds.

Since you're that confident about the legitimacy of your funds can you please post here a statement of your bank account?
It's all legitimate right?
Let's make it like the blockchain where once you know an address is connected to someone you can check his entire history and how much coins he has at least.

Do you have any clue what bitcoin is about?

With bitcoin sir, you can earn money from posting sir. You can also trade sir and earn money while posting sir!
Anyhow, I think we are wasting our time, those guys are never going to visit this thread again and engage in a real discussion.
Btw, check their profiles   the same pattern, 2+3 lines of text in 90% of the cases.

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LE:
Not to make another post.

I really think we should start by closing down exchanges that are not requiring KYC for deposits and withdraws under a certain amount.

What about people like me who trade exclusively peer to peer and never touch an exchange? Better just shutdown bitcoin altogether to be safe.

People that have more than 3 "_" in their nickname should be banned from everything
I'm sure that if we dig around we find out there is something illegal regarding your name somewhere on this planet in some 15th century forgotten town.   ;

[o_e_l_e_o]

Anyhow, I think we are wasting our time, those guys are never going to visit this thread again and engage in a real discussion.

They're not, but it's still worth correcting their nonsense for anyone else who will read this thread and may erroneously believe that only criminals deserve privacy.

Chainalysis, who are probably the biggest blockchain analysis company and who have over 200 customers including Binance, Bitstamp, and Bitpay, found that only 8% of funds passed through mixers are from illicit sources, with the majority of funds coming directly from exchanges, meaning the most common use of mixers is individual users seeking privacy from the prying eyes of centralized exchanges. You can see their webinar on the topic here: https://register.gotowebinar.com/recording/8980410054773689612. The section about the source of mixer funds is at 37:12 (you can type any old nonsense in to the name and email boxes to "register" to view the webinar).

I really think we should start by closing down exchanges that are not requiring KYC for deposits and withdraws under a certain amount.

What about people like me who trade exclusively peer to peer and never touch an exchange? Better just shutdown bitcoin altogether to be safe.

These kind of services might perhaps not be needed anymore because we people earning from legitimate source should never worry about the origin and destination of our funds.

Nothing to fear, nothing to hide, is an utterly nonsense argument:

I don't need to spend a lot of time dismantling the "nothing to hide" argument, because it is already widely discredited. I will share one of my favorite quotes on the topic though:

The old cliché is often mocked though basically true: there’s no reason to worry about surveillance if you have nothing to hide. That mindset creates the incentive to be as compliant and inconspicuous as possible: those who think that way decide it’s in their best interests to provide authorities with as little reason as possible to care about them. That’s accomplished by never stepping out of line. Those willing to live their lives that way will be indifferent to the loss of privacy because they feel that they lose nothing from it. Above all else, that’s what a Surveillance State does: it breeds fear of doing anything out of the ordinary by creating a class of meek citizens who know they are being constantly watched.

[JollyGood]

Mixers are also businesses, like the exchanges.
Nothing stops them from an arrangement to not mix stolen coins.
Of course I don't know if this exists, nobody will confirm that.

Regarding mixers and exchanges, you rightly said both provide a service, both are businesses. Both of them have been used to accommodate the transfer of stolen coins or those gained from illegal or maybe illicit sources. Whereas some exchanges might pull the KYC and investigation card, mixers do not do that.

I recall a few weeks ago certain users were openly stating they were happy to display either the Yobit x10 banner because they saw no difference between Yobit and mixers and argued anybody showing a mixer in their signature should be getting the same treatment as those showing a Yobit or x10 banner. Obviously the two do not correlate but that was the false justification put forward saying mixers were almost exclusively used for illegal activity. Moving forward, there is no doubt some users have taken advantage of the anonymity mixers (claim to) provide in order to hide some sort of criminality but as was pointed put in the previous post, the estimated figure currently stands at around 8% and that is fairly low considering the reputation some users are trying to paint about mixers in general.

For me the ethical concern surrounding mixers in the argument of illicit activity versus general users sending their funds from their exchanges direct to mixers in order to make their holdings effectively unknown after they are moved from any centralised exchange - is a non-argument. Mixers are providing a service for users that do not want anybody to know how much crypto they hold, if a tiny minority of users take advantage of that service and use it for illegal activity then there is not much that can be done at this moment in time.

With bitcoin sir, you can earn money from posting sir. You can also trade sir and earn money while posting sir!
Anyhow, I think we are wasting our time, those guys are never going to visit this thread again and engage in a real discussion.
Btw, check their profiles   the same pattern, 2+3 lines of text in 90% of the cases.

This does not surprise me. The forum is full of posts where questions or semi-questions have been asked from not so commonly known individuals then they never post back in the same thread, or if they did they would completely disregard what they wrote before or others have written then ask another question or semi-question.

[crispyjay]

It shouldn't come as a surprise that authorities won't like to see such advancements in Bitcoin because it took them years to get to the point they are today

Not to mention Chainalysis and similar businesses charging somewhere close to $50k / year for access to their database.

A few limits and common sense policies do reduce the laundering. But the direction this chainalysis thing is going, within a few years we will see many stories of random people's houses being searched and their lives ruined essentially because they didn't buy their coins from a regulated exchange - even small amounts. And that's bad for crypto. Not for criminals, they'll be fine. Just regular crypto users.

[NeuroticFish]

Regarding mixers and exchanges, you rightly said both provide a service, both are businesses. Both of them have been used to accommodate the transfer of stolen coins or those gained from illegal or maybe illicit sources. Whereas some exchanges might pull the KYC and investigation card, mixers do not do that.

The fact they can do that will never imply that they will do that, indeed.

I recall a few weeks ago certain users were openly stating they were happy to display either the Yobit x10 banner because they saw no difference between Yobit and mixers and argued anybody showing a mixer in their signature should be getting the same treatment as those showing a Yobit or x10 banner.

I use to believe that the community, this community, as a whole, knows better. And the fact that Yobit banners are usually not welcome is a result of many things, not only the way they are running their business (and sorry, but whoever still believes in ICO fairy tales may deserve their fate).
Since there's freedom of speech, users with those banners may be tolerated, but in some cases having that banner in the history may harm the reputation, no matter how they convince themselves it's ok to wear the culprit banners.

Obviously the two do not correlate but that was the false justification put forward saying mixers were almost exclusively used for illegal activity. Moving forward, there is no doubt some users have taken advantage of the anonymity mixers (claim to) provide in order to hide some sort of criminality but as was pointed put in the previous post, the estimated figure currently stands at around 8% and that is fairly low considering the reputation some users are trying to paint about mixers in general.

For me the ethical concern surrounding mixers in the argument of illicit activity versus general users sending their funds from their exchanges direct to mixers in order to make their holdings effectively unknown after they are moved from any centralised exchange - is a non-argument. Mixers are providing a service for users that do not want anybody to know how much crypto they hold, if a tiny minority of users take advantage of that service and use it for illegal activity then there is not much that can be done at this moment in time.

I am a fan of Monero, so I know very well what you mean. Some things can be used for illegal activities and will be used for illegal activities (and I keep telling that US dollar bills fall in the same category), but that doesn't make them automatically bad, illegal or fair to be presented as tools for criminals.
I don't like people to look into my pockets and Bitcoin allows that too easy. Mixers fix that. Monero also fixes that. Is that illegal, I don't feel so.
Could the mixers "behave" better? Maybe. It may also be up to the centralized exchanges and big holders to approach them with some interesting proposals.

All in all, wasn't also Bitcoin "advertised" by media as drug money and so on? But time has shown that they are wrong. Haters are always gonna hate.

[o_e_l_e_o]

I don't like people to look into my pockets and Bitcoin allows that too easy. Mixers fix that. Monero also fixes that. Is that illegal, I don't feel so.

Not at the moment, but I can see a future where it is. Governments the world over are prying more and more in to the lives of their citizens. Wikileaks, Snowden, etc. have shown the world that mass surveillance is commonplace. William Barr and other high ranking officials keep pressuring companies like Facebook to build backdoors in to WhatsApp and similar apps to allow the government to snoop on encrypted messages. Governments regularly request data from Google, Apple, Microsoft, health insurance companies, etc., who hand it over in the vast majority of cases. Surveillance states are growing in both number and reach, and it won't be long before governments start using blockchain analysis to ascertain exactly how much bitcoin everyone is holding, if they haven't started already.

All in all, wasn't also Bitcoin "advertised" by media as drug money and so on? But time has shown that they are wrong.

I've always been a fan of Andreas Antonopoulos' response to the argument that bitcoin is used to buy drugs, which is essentially along these lines: Drugs are the second most traded commodity in the world, after food. The entire definition of money is that it can be traded for goods and services. If you can't buy the second most widely traded good in the world, then what you have isn't actually money.

[NeuroticFish]

All in all, wasn't also Bitcoin "advertised" by media as drug money and so on? But time has shown that they are wrong.

I've always been a fan of Andreas Antonopoulos' response to the argument that bitcoin is used to buy drugs, which is essentially along these lines: Drugs are the second most traded commodity in the world, after food. The entire definition of money is that it can be traded for goods and services. If you can't buy the second most widely traded good in the world, then what you have isn't actually money.

Yes, it's a very nice and common sense explanation he made, but most don't care / ignore it.
The Bitcoin-as-drug-money ad was trying to make people believe that buying drugs on darknet is the only use for Bitcoin.

I don't like people to look into my pockets and Bitcoin allows that too easy. Mixers fix that. Monero also fixes that. Is that illegal, I don't feel so.

Not at the moment, but I can see a future where it is. Governments the world over are prying more and more in to the lives of their citizens. Wikileaks, Snowden, etc. have shown the world that mass surveillance is commonplace. William Barr and other high ranking officials keep pressuring companies like Facebook to build backdoors in to WhatsApp and similar apps to allow the government to snoop on encrypted messages. Governments regularly request data from Google, Apple, Microsoft, health insurance companies, etc., who hand it over in the vast majority of cases. Surveillance states are growing in both number and reach, and it won't be long before governments start using blockchain analysis to ascertain exactly how much bitcoin everyone is holding, if they haven't started already.

That would be a sad future if it'll happen. I hope it won't ever happen.
The fact that they try to keep everything under surveillance is not new and the phenomenon is expanding at a very fast rate, although in some cases common sense starts to prevail (CMIIW, but I think that public face recognition postponed in Europe until the software gets more mature and harder to be abused).
ToR is not illegal. So I can hope that Monero will also not become illegal. It's just a clever software after all.

(There's also a very odd reverse-psychology explanation: they'll always allow into existence some tools that - among other features - allow illegal operations too to justify the existence of the law enforcement agencies and their funding  )