Exchanges are now potentially banning btc sent to a mixing/conjoin services

[malevolent]

If crypto exchanges include such "anti-mixer" rule in their Terms of service,we have no choice but to follow this rule.With all the regulations and KYC,the crypto exchanges don't want "dirty money" in their wallets,so it's normal for them to ban transactions coming from BTC mixing services,because someone,who uses a mixer service clearly has something to hide.There's no other reason to use a Bitcoin mixer.

You yourself have put "dirty money" between quotation marks, why then are you normalizing their behaviour?

And there's nothing wrong in wanting to maintain some privacy.

https://en.bitcoin.it/wiki/Privacy#Examples_and_case_studies

[KonstantinosM]

I hate all of this. I guess that's the way to find out if your mixer was worth anything to begin with. I guess you can just swap coins with somebody from another part of the world, probably give them a small tip and then use one of these snoopy snoopy compaines.

It's only natural that they would start doing this. All of those money services licences from the government come with strings and chains attached. The good part is that unlike banks, we can take our funds into our sole and exclusive ownership. Hopefully with the lightning network anonymity will increase drastically.

[ene1980]

Remember back in mid December, someone also reported that Binance freezes his account because he sent it to Wasabi wallet.
 

That is bad news for everyone who prefers privacy and that is utter bullshit as everyone needs privacy to safe guard our asset and how come the exchanges come to know that the funds are indeed sent from mixers, do they have a team to monitor every transaction and identify from where they arise, these are actually not good news for anyone who prefers privacy as i do not want anyone to monitor my source funds which is my hard wallet and i am yet to come across this obstacle. If someone could come up with a list of exchanges that restrict mixing service that would be great.

[figmentofmyass]

If you fund somebody's address that's engaged in an illegal activity, it's up to law enforcement to ask the exchange for the KYC info, not for the exchange to behave like law enforcement.

i agree in spirit, but we're sadly entering an era where bitcoin exchanges are increasingly being classified as financial institutions (ie banks) and money transmitters by governments. the FATF (which is really just a front for the USA government) has also been pushing its "risk-based approach" to AML/CFT quite hard.

whether we like it or not, proximity to so-called "risky" services (according to chainalysis: P2P exchanges, mixing services, high risk exchanges, and gambling sites) is therefore a problem for compliant exchanges:



so we should expect exchanges to increasingly target the low-hanging fruit and close their accounts. that's the mission of the FATF's "risk-based approach"---to get financial institutions (and now bitcoin exchanges) to stop doing business with "risky" customers.

besides gambling sites, wasabi wallet coinjoins are probably one of the lowest hanging fruit of all. until the implementation is less obvious, i don't recommend using them. use a mixing service with superior liquidity and less obvious algorithms.

EDIT: you're right, OP posted 2 cases: one of a user mixing and one of a user coinjoining with wasabi wallet... I focussed on the latter

both cases = wasabi wallet. https://twitter.com/RonaldMcHodled/status/1222195787112673281

[maydna]

If I am in those situations, I will send my bitcoin to another wallet, and then I will send it into mixing services. That will solve the problem without they know that we send the bitcoin to the mixing. The other way you can do is convert your bitcoin first into an altcoin, send it into another wallet for that altcoin but which support converting back to bitcoin. The exchanges will think that you send the altcoin to another wallet, but they don't know if you turn your altcoin to bitcoin and send it into the mixing services.

You can use a separate wallet that doesn't connect to another exchange, so they cannot do anything if, finally, they know that you send it to the mixing services. I hope that can help us to solve the problem, but I am sure that perhaps, another exchange will send an email to you because of sending it to the mixing services.

[maxreish]

Exchanges has been alarmed by increasingly used of bitcoin mixers by the purpose of illegal acts. We should respect exchange's platform in the first place. If one should insist of transferring btc to a btc mixer, then find another exchange that allowed it. Or you can simply transfer it to a personal digital wallet before transferring to a btc mixers. There's always a way. We knew that bitcoin mixers reputation nowadays was not that good because of the previous issues.

[mocacinno]

I see far to many people defending the exchanges engaging in these behaviours in this thread... Really... I'm astounded that the general consensus isn't shunning these exchanges and making a public list as to which exchanges should be avoided at all costs.

I tought about a relatively analog situation... It's actually the other way around from the post made by the OP, but it's equally valid.

The situation
Person A sells guns on openbazaar accepting BTC
Person B sells his kid's second hand toys on openbazaar (a digital garage sale) accepting BTC

Since openbazaar uses a HD wallet for the seller, the buyer (that can potentially be law enforcement or a criminal) is now able to follow the trail of unspent outputs untill they are exchanged on one of the many KYC exchanges. If the buyer is Law enforcement, they are now able to get a warrant and tie the identity of the seller to the sale. In case the buyer is a criminal, he can wait untill the exchange is hacked, he can hack the exchange himself, he can blackmail an exchange operator, he can bribe an operator,...

Bottom line is that, as a seller, it doesn't matter if your client is the police or a thief, you have to be realistic and know that in the future, it might be possible for either seller to find out how much BTC you hold and where you live.

In case of the gun seller, this is good if law enforcement can tie his identity to his sales (so they can arrest him)... In case for the garage sale it's VERY bad (since the thief now knows how many BTC person B holds, and knows where he lives).

Now, i hope i've made my point that both person A and person B have added benefit when mixing, coinjoining or exchanging to an anonymous coin. I hope this makes it clear that it's NOT the act of mixing/coinjoining/exchanging is illegal. There are, in fact, perfectly legal reasons to mix/coinjoin/exchange. It's NOT up to the exchange to lock users because they want privacy. It's up to law enforcement to track illegal gun sellers down, and only get warrants for people that are doing illegal stuff. An exchange, even if it's looked upon as a financial institution, is NOT a valid form of law enforcement. They do not have the right to meddle, track, block, ban,... The only thing they are allowed to do is keep the KYC information SAFE untill law enforcement comes around with a legal warrant to request this information. A warrant based on concrete evidence that the person that's being investigated has a high probability of having done something illegal, a warrant signed by a judge.

If exchanges are forced to do act like law enforcement by the law of the country they operate in, we should switch to exchanges that are located in countries where the laws aren't completely retarded. If exchanges took it upon themselfs to play "world police" they should be dropped, shunned, avoided, sued,...

Would you like it if you FIAT bank decided to block your account because you worked for a brewery, and since drinking and driving is illegal, they no longer accept the money of people that have anything to do with alcohol or tobacco? Would you be OK if they blocked your bank account because they saw you walking out of a pub at night? Would you be OK if they blocked your account and did not want to release your money before you gave them an absurd amount of personal information? Would you be OK if they plain blocked your account and did not give you any way of getting your money back?
The answer is: NO, you would not be OK... If this happened to you, you'd be searching a lawyer by now, you would have contacted the newspapers, you would be calling your relatives to withdraw all their money from said bank... Why on earth do people think this behaviour is not OK with FIAT, but perfectly fine with crypto?

[figmentofmyass]

If I am in those situations, I will send my bitcoin to another wallet, and then I will send it into mixing services. That will solve the problem without they know that we send the bitcoin to the mixing.

if you're using wasabi wallet for coinjoins, that's probably not good enough. in fact, the first example in the OP put multiple hops between his exchange withdrawal and the coinjoin. he still got flagged.

[Polar91]

Apparently, we know that bitcoin is hard to control or manipulate especially with a third party that will put up some restrictions to what people could freely do with their funds and wallets. But it is evident that they are now making their step to somehow regulate the transaction of bitcoin, because mixing it will provide the best option for the user to stay anonymous, maybe this is their initial step to tax trading profits of most of the users, basically to avoid them being free which turns out to be alarming as it removes the freedom we should have in the first place. So, in my opinion, decentralized bitcoin exchanges will be our future hopes.

[blckhawk]

Seems like part of their KYC and AML regulations. And while it's good for detecting suspicious activities, smaller amounts shouldn't been filtered out.

However, one problem in this method is that a criminal could just split up his withdrawals on smaller amounts, therefore bypassing the threshold at which the withdrawal is blocked.

One basis of exchanges for blocking transfers to mixing services might be the total amount of holded Bitcoins of an account.

Whichever case it might be, just send it first to your own wallet, then you can freely send it to the mixing service. You'll just sacrifice a few fees, but knowing you have more than enough bitcoins, it wouldn't really hurt your wallet.

[malevolent]

Now, i hope i've made my point that both person A and person B have added benefit when mixing, coinjoining or exchanging to an anonymous coin. I hope this makes it clear that it's NOT the act of mixing/coinjoining/exchanging is illegal. There are, in fact, perfectly legal reasons to mix/coinjoin/exchange. It's NOT up to the exchange to lock users because they want privacy. It's up to law enforcement to track illegal gun sellers down, and only get warrants for people that are doing illegal stuff. An exchange, even if it's looked upon as a financial institution, is NOT a valid form of law enforcement. They do not have the right to meddle, track, block, ban,... The only thing they are allowed to do is keep the KYC information SAFE untill law enforcement comes around with a legal warrant to request this information. A warrant based on concrete evidence that the person that's being investigated has a high probability of having done something illegal, a warrant signed by a judge.

If exchanges are forced to do act like law enforcement by the law of the country they operate in, we should switch to exchanges that are located in countries where the laws aren't completely retarded. If exchanges took it upon themselfs to play "world police" they should be dropped, shunned, avoided, sued,...

Would you like it if you FIAT bank decided to block your account because you worked for a brewery, and since drinking and driving is illegal, they no longer accept the money of people that have anything to do with alcohol or tobacco? Would you be OK if they blocked your bank account because they saw you walking out of a pub at night? Would you be OK if they blocked your account and did not want to release your money before you gave them an absurd amount of personal information? Would you be OK if they plain blocked your account and did not give you any way of getting your money back?
The answer is: NO, you would not be OK... If this happened to you, you'd be searching a lawyer by now, you would have contacted the newspapers, you would be calling your relatives to withdraw all their money from said bank... Why on earth do people think this behaviour is not OK with FIAT, but perfectly fine with crypto?

Unfortunately, it appears that because coins can often be feasibly tracked, Bitcoin has on numerous occasions been lauded for its transparency, and because the user has to go out of their way to maintain a semblance of privacy, we have arrived at this place where strict surveillance is slowly becoming something most have gotten used to. Changing the direction we're heading to might be difficult, unless Bitcoin/wallets undergo some serious changes.

[wozzek23]

Things are really getting to another level you will only be having this kind of problem when you’re making use of centralized exchanges, and most people in the cryptocurrency community are making use of these exchanges which means they are probably dominating the space. I hardly see people that use decentralized exchanges, you wouldn’t have this kind of problem when making use of DEX.

I don’t make use of coin mixers, I haven’t used them for once, because I don’t even have a reason to do so. People I have heard that are using are mostly hackers and scammers, and of course people that wants to stay pretty much anonymous.