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

[Baofeng]

Here is an another examples of how crypto exchanges are not going to act if they suspect you of using a bitcoin mixing services.

https://twitter.com/RonaldMcHodled/status/1222172084610027523




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

https://twitter.com/bittlecat/status/1207621591820951552

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[AB de Royse777]

This sucks however the easy solution is to send the coins to your own wallet first then why not send them to the mixers?
Yes, the way now they spy on the bitcoin transections is basically killing the beauty of using crypto. There are too many chain analysis company and this industry is getting bigger.

[magneto]

I remember the bittlecat tweet. Looking back at it, it was an amount smaller then half a bitcoin, so I am pretty sure the reason for the flag would have been automatic. I don't see Binance support approving transactions that small personally, it would make sense if it was higher then 20 BTC, or something. I am curious to know how they found out the wallet from just a single address? Via twitter responses: "Wasabi uses a static fee address which would have most likely been the immediate next transaction that the new bc1 address would have been immediately associated with.", it seems like a combination of static fees + previous withdrawals to Wasabi.

Back on topic, it seems that the Wasabi fees have been flagged and is causing an issue for people. However, this response is a bit scary
.
https://twitter.com/RonaldMcHodled/status/1222181343922049025

So it looks like the exchange did post-chain anaylsis, and was able to detect that the user was doing a mixer transaction, even though the first address wasn't even to a mixer? There are no rules against this, and it's pretty shocking that this could have happened - the bittlecat instance is understandable, but this is taking things onto a next level.

[mocacinno]

This sucks however the easy solution is to send the coins to your own wallet first then why not send them to the mixers?
Yes, the way now they spy on the bitcoin transections is basically killing the beauty of using crypto. There are too many chain analysis company and this industry is getting bigger.

Wasabi isn't a mixer... Wasabi is a wallet with an extra feature that allows you to participate in a coinjoin from the gui... It's up to you wether you do this, or just use wasabi because it's an open source, HD, native bech32 wallet with easy tor integration.

The only thing we (as a community) can do is to raise awareness and AVOID exchanges that engage in this behaviour like the plague. I get why they have to implement KYC procedures for anybody that wants to exchange CRYPTO <--> FIAT, but when you want to withdraw said fiat crypto, they have no business with which address you fund. 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.

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

[mk4]

The only thing we (as a community) can do is to raise awareness and AVOID exchanges that engage in this behaviour like the plague.

And also, probably coinjoin the crap out of everyone's coins till we reach the point that pretty much the majority of circulating coins already have been through a coinjoin, hence these exchange really wouldn't have a choice but to accept them.

Apparently this "Bull Bitcoin" exchange has Wasabi Coinjoin integrated in their backend which is remarkable if you ask me. Unfortunately though, it's a Canada-only exchange.

[davis196]

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.

[mocacinno]

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.

Sure there is a choice: don't use those exchanges... Really, if you have a choice between two otherwise equal exchanges: an exchange that will ban you for mixing and an exchange that won't ban you: chose the latter...

There are many good reasons for mixing, coinjoining or switching to a more anonymous coin (like XMR). For example: there are a (very limited) number of people on this forum that have the ability to dox me, Theymos also keeps my ip records on file for a while. I don't want anybody to be able to tie my crypto funds to my physical person, since i don't want my daughter to be kidnapped and helt for crypto randsome.


BTW: this thread wasn't about an exchange not accepting funds that came from a mixer, but about an exchange that locked a user's account because that user coinjoined/mixed using an unspent output from an unspent output that was generated by an exchange...

[rosezionjohn]

Okay, please enlighten me here...

Is this how the events happened?
1. From exchange to his private wallet
2. From private wallet, sent to a mixer
3. From mixer, to another private wallet
4. A few days later, he got an email that he violated the terms for sending his btc to a mixing service.

If that is the case, isn't that invasion of privacy already? It's like a bank telling you that you can't deposit your money to any institution that they don't like.

[bitmover]

Okay, please enlighten me here...

Is this how the events happened?
1. From exchange to his private wallet
2. From private wallet, sent to a mixer
3. From mixer, to another private wallet
4. A few days later, he got an email that he violated the terms for sending his btc to a mixing service.

If that is the case, isn't that invasion of privacy already? It's like a bank telling you that you can't deposit your money to any institution that they don't like.

I believe there is a much easier way to bypass those exchanges that are banning your mixed coins.

1 -mix your coins
2 - send them to your wallet
3- send to another address within your wallet again
4- do that 6-7 times until you think it is enough,  always using 1 sat/byte  fees and changing quantities
5 - your coins are clean again.

[DooMAD]

Any company placing unnecessary barriers in their client's paths are jeopardising their business model.  It's as simple as that.  As others have said, leverage your cumulative power as consumers, vote with your pockets and avoid using those services en masse.  Name and shame.  Tell other people to avoid using them.  Don't simply bend over and take it.  Your privacy is worth fighting for.

Privacy features are currently being developed at protocol level as well, so any exchanges engaging in this practice are likely going to face some pretty interesting quandaries once those are implemented.

[o_e_l_e_o]

Behavior like this is yet another reason I am so glad I don't use any centralized exchange. The very fact that users have even received an email like this means the exchange is performing blockchain analysis on your coins both before they reach the exchange and after they leave it, which should be enough on its own to turn any sane person off, even without their draconian rules regarding where you can and cannot send your coins to. Not content with invading your privacy, collecting all your personal details and KYC documents, selling your info to third parties, and taking control of your coins, the exchanges even want to dictate what you are allowed to do with your own money.

These exchanges are starting to behave more and more like fiat banks. They are starting to become antithetical to bitcoin's very purpose.

Trade decentralized.

[Timelord2067]

There's always been the capacity to mark coins with a tag that others can use to identify those coins down the road.  They are refereed to as coloured coins - I would have preferred them to be called by another name, but I'm sure alt coins hadn't been dreamed up at that time.  I haven't heard many people talk about coloured coins for a while now.

[aioc]

People should be aware of the rules their exchanges are implementing if they are not, they will be in trouble sooner or later, like this rule they can get your account in trouble you should follow their rules if you want to sent it to a mixer just do so after you sent it to your wallet, soyou will avoid penalties.

[shield132]

That's great, especially I love the accident that happened in this screenshot. Why? Because when you use mixer, you have to feel confident that your privacy is protected and if they are easy enough for exchanges to catch, then this means that mixer was just piece of shit. When exchange can detect that you used "famous" mixer, that hugely affects your privacy.
Bitmixer did very correct thing, owner of that mixer wasn't stupid to shut down huge money making machine for nothing. He earned a lot of money and when understood that he wouldn't be able to last that long and protect his and customers privacy, decided to shut down his service.
Would love to see what will happen around other mixers, what will come: a new trend or new shutdowns?

[Ryker1]

Well, I expected this to happen. It's just that it's too early to show up in the forum. The sense of Bitcoin is really starting to vanish. I find it hard to accept that we couldn't do anything we wanted with our Bitcoin even though we have the private keys. Perhaps the solution we have right now is to have clean money. AML isn't really a bad thing though it just needs to protect the people from the dirty money. A person wouldn't need to use Mixer if their Cryptocurrency assets came from a good deed or something clean. Probably that is how it works.

[Yaunfitda]

It's going to be a cat and mouse game, so it ever a mixer shutdowns, a new one will come in with new algo's and stuff.

Would love to see what will happen around other mixers, what will come: a new trend or new shutdowns?

To be honest, I didn't see this coming, I mean we all know that if we used tumblers or conjoiners we "thought' that we're safe. Anyway, the best thing to do is to just stay away from exchanges like this one, and as others have pointed out, DEX should be answer.

[The Sceptical Chymist]

There are no rules against this, and it's pretty shocking that this could have happened

I agree, and it's unfortunate that some exchanges do this.  Coinbase is notorious for closing customers' accounts if coins are sent to gambling sites and probably other ones as well.  I'm not sure if they're required to do this by their government regulators or if they're doing it as a precaution, so they don't get linked to criminal/shady activities themselves.  Regardless, it sucks.

Never heard of Paxos, but I'd definitely avoid them if I were looking for any services they offer.  Most exchanges don't do what Paxos and Coinbase do as far as I know.  I've never heard stories of Kucoin, Binance, or any of the bigger exchanges tracing where their customers' funds are going once they're withdrawn. 

[thesmallgod]

Everybody is condemning this but nobody has stated maybe there is some negative impact associated with users sending bitcoin to the bitcoin mixer. If not one or two centralized exchange is doing this, then there should be a cogent reason for this and by the way, I do not think Binance will query users for this if it is not stated explicitly on their term of service. I believe this is part of the thing that differentiates the centralized exchange platform from the decentralized one, so if you wanna use the centralized exchange, you gotta follow their T&C. I use coinbase a long time ago but when I heard the news about them blocking the account of users that send a coin to a gambling site, I heard to switch to bitpay wallet.

[fortunecrypto]

The exchange should send this notification to all their traders and investors, they will be surprised to find this out later, many traders are in fact doing this, and although ignorance of the law or rules excuses no one, at least these exchanges will do their part to warn their users or else they will be blame for not sending a notification.

[20kevin20]

And this is how control is slowly imposed, step by step.

To users wondering why would they block coinjoin/mixer transactions when you can transfer the BTC to your own wallet, they're probably doing so because when you send coins coming from a mixer to your wallet, they both link and your identity could be found.

It's just like I suspected in a thread I've posted earlier on the forum. These are all absurd consequences of trying to keep your identity to yourself, because your information is worth hella lot of money.

Regarding the tweet from the OP, if I was the person in that situation I would not answer them anything and I'd immediately cease using my account through their platform. It's not their business what we're doing with our money after it leaves their platform, is it?