Why mixers?

[BlackHatCoiner]

Recently a man was deceived by someone who had change the electrum source code on an old version of it. He lost 1400BTC(!)

I had made a similar question in the past, but the answer didn't satisfy me. Why should that hacker use a mixer? If he try to sell the bitcoins from his main address (the one with the 1400BTC) he will get caught, because he will prove that he is the hacker.

If he send 1BTC to 1400 owned addresses, though, no one can prove that the person that owns those 1400 addresses is the hacker, right? They can only ask them where did you get that one bitcoin.

[1715152660]

1715152660

[Bitcoin_Arena]

Who has time to create 1400 Addresses so as to split the 1400 bitcoins? 
A hacker would be the last person you would expect to do this when there are a couple of good bitcoin mixers right under his nose. Just a couple hours and what the wants has been done by the mixer

If he send 1BTC to 1400 owned addresses, though, no one can prove that the person that owns those 1400 addresses is the hacker, right? They can only ask them where did you get that one bitcoin.

There are some chainlysis tools that are even said to be able to unmask the source of mixed bitcoins. Imagine how easy it will be to trace the source of the tinted 1400 BTC even in different addresses

One of them is walletexplorer.com, it's able to link addresses from one HD wallet so even if one tries to generate many addresses using one HD wallet (This is the easiest way to generate 1400 BTC addresses) It will be no work done

[Tytanowy Janusz]

Recently a man was deceived by someone who had change the electrum source code on an old version of it. He lost 1400BTC(!)

I had made a similar question in the past, but the answer didn't satisfy me. Why should that hacker use a mixer? If he try to sell the bitcoins from his main address (the one with the 1400BTC) he will get caught, because he will prove that he is the hacker.

If he send 1BTC to 1400 owned addresses, though, no one can prove that the person that owns those 1400 addresses is the hacker, right? They can only ask them where did you get that one bitcoin.

And one day he will recive a letter from local police station that he is being summoned for a questioning as a witness in a crime. He will have to take a day off and appear at the police on pain of a fine or restriction of liberty.
Explain himself, provide source of this 1 BTC. As part of the investigation, the police may confiscate computer / telephone for months. What for? Just mix and pay 1-5% fee. Or deposit to exchange x, exchange to monero, deposit to exchange Y, withdraw bitcoin.

[BlackHatCoiner]

Who has time to create 1400 Addresses so as to split the 1400 bitcoins?  

It is one command on electrum. Anyway, you didn't answer my question. Yes, mixers is a good solution for the hacker, but can someone prove that he owns the addresses?

Recently a man was deceived by someone who had change the electrum source code on an old version of it. He lost 1400BTC(!)

I had made a similar question in the past, but the answer didn't satisfy me. Why should that hacker use a mixer? If he try to sell the bitcoins from his main address (the one with the 1400BTC) he will get caught, because he will prove that he is the hacker.

If he send 1BTC to 1400 owned addresses, though, no one can prove that the person that owns those 1400 addresses is the hacker, right? They can only ask them where did you get that one bitcoin.

And one day he will recive a letter from local police station that he is being summoned for a questioning as a witness in a crime. He will have to take a day off and appear at the police on pain of a fine or restriction of liberty.
As part of the investigation, the police may confiscate computer / telephone for months. What for? Just mix and pay 1-5% fee. Or deposit to exchange x, exchange to monero, deposit to exchange Y, withdraw bitcoin.

That's an answer. Thanks. I didn't know that police is searching for bitcoin scammers.

[o_e_l_e_o]

If he send 1BTC to 1400 owned addresses, though, no one can prove that the person that owns those 1400 addresses is the hacker, right?

Lets say there is the following chain of transactions:

1,400 BTC from a known hacked wallet to a known hacker's address
That 1,400 BTC is then split in to 1 BTC chunks and sent to 1,400 other addresses
Someone then deposits 1 BTC from one of those addresses to an exchange

What is the chance that the hacker has sold all 1,400 BTC simultaneously in exactly equal 1 BTC chunks and sent them to 1,400 different addresses? How did he sell them all so quickly? How did he find enough buyers? Why did every buyer want exactly 1 BTC? The chances of this happening are astronomically small. The only logical conclusion is that the same person depositing that 1 BTC is the same person who hacked the 1,400 BTC. Best case scenario then is his coins are seized by the exchange; worst case the exchange are handing his IP and KYC details over to law enforcement. Even if the hacker bounces the 1,400 BTC around multiple different addresses in multiple different amounts over multiple different transactions, it is still fairly trivial to trace them all back to the initial address.

That's why you use mixers. Good mixers will completely break the chain between inputs and outputs.

[BlackHatCoiner]

That's why you use mixers. Good mixers will completely break the chain between inputs and outputs.

Why are mixers legal? The only purpose I find on them is to money launder. They are literally useless if you don't have anything to hide.

[NeuroticFish]

Good mixers will completely break the chain between inputs and outputs.

Doesn't this mean that somebody else will receive coins (from the mixer) from the "tainted" "source"?

Why are mixers legal? The only purpose I find on them is to money launder. They are literally useless if you don't have anything to hide.

You like people look into your pocket? Is the content of your bank account shown on your FB wall?
Do you use curtains at home? Is your door open?
You always have something to hide. I remember that at some point somebody came here asking for advice since he was threatened by somebody who knew him and who has seen how many bitcoins he (legally) owned.

[Tytanowy Janusz]

Why are mixers legal? The only purpose I find on them is to money launder. They are literally useless if you don't have anything to hide.

Mixers are used to hide your identity not only from governments/police but also from thieves, cheaters, kidnappers. Will you do a deposit to crypto exchange that you did KYC on from a wallet where 100 BTC is? I would not. There is no certainty that there is no black market for data linking large wallets to individuals for kidnappers to know where to strike for big easy money.

[Bitcoin_Arena]

It is one command on electrum. Anyway, you didn't answer my question. Yes, mixers is a good solution for the hacker, but can someone prove that he owns the addresses?

It quite obvious because when the hacker tries to cashout to fiat. That's when problems come in. Remember, almost all big crypto to fiat exchanges require some sort of KYC. Most are centralized and can handover KYC details, email addresses plus IP logs to the authorities when they trace the transactions to the exchange's address.

That's an answer. Thanks. I didn't know that police is searching for bitcoin scammers.

If you didn't know, then know it from today. Here is a perfect example of how the twitter scam hackers were arrested, they tried to cashed out their unmixed stolen bitcoins - https://www.digitaltrends.com/news/tampa-teen-twitter-bitcoin-scam-arrested/

[o_e_l_e_o]

Why are mixers legal? The only purpose I find on them is to money launder. They are literally useless if you don't have anything to hide.

Why would swapping some bitcoins for other bitcoins be illegal?

Analysis has shown that the majority of mixers' traffic comes directly from centralized exchanges, by users who are simply looking to increase their privacy from the prying eyes of exchanges. There are a thousand good reasons a user might want privacy despite doing nothing illegal. If you truly believe that you don't need privacy unless you have something to hide, then please share your real name, address, internet browsing history, bank statements, email accounts and passwords, and social media accounts and passwords publicly in this thread, so we can all have a good look through your private life and publicly share what we find. After all, you don't have anything to hide, do you?

The "nothing to hide" argument as been widely debunked:

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.

[Jawhead999]

Why are mixers legal? The only purpose I find on them is to money launder. They are literally useless if you don't have anything to hide.

The purpose is to obfuscate the trail, money launder is the bad/negative side of mixers.

Privacy is a matter in crypto world, let's say if you own huge amount Bitcoin and anyone know what's your name, your location, your home etc. You'll potentially getting attacked by $5 wrench attack from thieves.

[BlackHatCoiner]

@o_e_l_e_o, I didn't say that privacy doesn't matter. Of course it does. But let me ask you a question, if I wanted to mix 1400BTC, then the bitcoins would first pass from the mixer's addresses. Won't the police know that the stolen bitcoins are now owned by the mixer's company? I don't understand why the whole scam is solved with just a mixer and how the hacker can now spend them all without being afraid of getting caught.

[UserU]

@o_e_l_e_o, I didn't say that privacy doesn't matter. Of course it does. But let me ask you a question, if I wanted to mix 1400BTC, then the bitcoins would first pass from the mixer's addresses. Won't the police know that the stolen bitcoins are now owned by the mixer's company? I don't understand why the whole scam is solved with just a mixer and how the hacker can now spend them all without being afraid of getting caught.

I don't think the mixers would want to make themselves known publicly (in terms of IRL information) in the first place.

Also, there's a possibility that a mixer could also send the Bitcoins to another mixer before sending them to the addresses. Just to make things even more difficult to trace.

[seoincorporation]

That's why you use mixers. Good mixers will completely break the chain between inputs and outputs.

Why are mixers legal? The only purpose I find on them is to money launder. They are literally useless if you don't have anything to hide.

I was thinking as you mate, why mixers still legal?

The exchanges have to send the bitcoin back if they come from a hack but why no one says the same for Mixers? Those are money laundering machines and no gov is interested in stopping them.

Maybe governments are ignorant and they don't know a tool like this exists. That's why they are not getting banned yet. But they will not live forever.

[kryme]

It is one command on electrum. Anyway, you didn't answer my question. Yes, mixers is a good solution for the hacker, but can someone prove that he owns the addresses?

It quite obvious because when the hacker tries to cashout to fiat. That's when problems come in. Remember, almost all big crypto to fiat exchanges require some sort of KYC. Most are centralized and can handover KYC details, email addresses plus IP logs to the authorities when they trace the transactions to the exchange's address.

That's an answer. Thanks. I didn't know that police is searching for bitcoin scammers.

If you didn't know, then know it from today. Here is a perfect example of how the twitter scam hackers were arrested, they tried to cashed out their unmixed stolen bitcoins - https://www.digitaltrends.com/news/tampa-teen-twitter-bitcoin-scam-arrested/

To add to this, Binance US doesn't even require a warrant to hand over user information to law enforcement. Below are their requirements.

· information of the agent (If possible, full name, phone number, email address, etc.) investigating the incident reported;
· the official seal of the law enforcement authority;
· explicit requirements from Binance US, such as IP logs, identity documents, etc.

[hatshepsut93]

Why are mixers legal? The only purpose I find on them is to money launder. They are literally useless if you don't have anything to hide.

Probably because governments still don't care that much to look into regulating Bitcoin.

Recently a man was deceived by someone who had change the electrum source code on an old version of it. He lost 1400BTC(!)

This is wrong, Electrum's source code wasn't compromised, what are you referring to is a bug/oversight that allowed Electrum servers to send messages to clients that looked like wallet notifications.

If he send 1BTC to 1400 owned addresses, though, no one can prove that the person that owns those 1400 addresses is the hacker, right? They can only ask them where did you get that one bitcoin.

It's actually fairly obvious that all those addresses belong to a hacker or otherwise linked to him, because such strange transactions don't happen under normal circumstances.

[kryptqnick]

That's why you use mixers. Good mixers will completely break the chain between inputs and outputs.

Why are mixers legal? The only purpose I find on them is to money launder. They are literally useless if you don't have anything to hide.

I believe some people use mixers just because of being obsessed with privacy while at the same time preferring Bitcoin to, say, Monero. I'm sure that not all mixer users are doing illegal stuff. Some people might just want to ensure that nobody traces their money. Others might want to do things that are not illegal but are confidential or just something one would reasonably want to hide (financing a political party, spending money on something your close ones would not approve of or something like that). But there's a good chance that mixers are used primarily for illegal activities, I think, so I would not mind them becoming illegal.

[Artemis3]

That's why you use mixers. Good mixers will completely break the chain between inputs and outputs.

Why are mixers legal? The only purpose I find on them is to money launder. They are literally useless if you don't have anything to hide.

Except there are many places where criminals are looking to extort, kidnap or worse, rich people. And a key to identify rich people, is finding out what their finances are. So yeah it "sounds nice" that you need to explain your gov where your fortune comes from to deter crime, but it isn't great when this info falls in the wrong hands, and in some places, such criminal organizations have ties with the very same gov or entities regulating this.

You see, its a catch22. Suppose the Mixer requires you to KYC to comply with regulations. Then this mixer (or the KYC processor) is "hacked" and the info sold in the "dark web". Then some local crimelord with a cyber arm finds out about you...

But yes, it could make easier to launder too. Those who live in "nice countries" (ie. low crime rate) would seem to willingly surrender their privacy. What could possibly go wrong? But many living "less nice" places, where crime and police are often one and the same, their privacy means their life, quite literally.

What is the crime in becoming rich by honest means? Its not a crime, but criminals would love to find you... And then they will launder what they take from you. Or maybe lets forget KYC and educate people to not do foolish things like holding a large sum in an online wallet, reusing addresses, and leaving traces that could make third parties correlate address with person.

Well i guess you could also diversify and invest in other things. Laundering is nothing new, and has been always done with fiat. Bitcoin is not at fault, and things like KYC are an external artifact from an outdated system/society.

[20kevin20]

Recently a man was deceived by someone who had change the electrum source code on an old version of it. He lost 1400BTC(!)

I had made a similar question in the past, but the answer didn't satisfy me. Why should that hacker use a mixer? If he try to sell the bitcoins from his main address (the one with the 1400BTC) he will get caught, because he will prove that he is the hacker.

If he send 1BTC to 1400 owned addresses, though, no one can prove that the person that owns those 1400 addresses is the hacker, right? They can only ask them where did you get that one bitcoin.

Nice try, hacker! (jk)

This probably goes as bad as receiving a paycheck from someone right after they've finished a murder goes. Both the issue and the way it could go depends solely on the other parties. In your case, depends on the way the exchange sees it. If the coins were received by the exchange from an address that received the said BTC straight from a hack/crime, the coins will automatically be considered suspicious and, in consequence, will probably be seized until authorities decide whether you are innocent or not.

Guess they could prove that it's the same guy if the guy didn't protect his identity in the process (and by identity, I am talking about IPs as well). And honestly, I personally think that intel agencies are sometimes going a bit deeper into the line than the laws allow them to..

But why send money to another address you own directly when you can just take a few more minutes of your time and lower the chances of getting caught?

Who has time to create 1400 Addresses so as to split the 1400 bitcoins? 

Oh man, give me 1400BTC and I will happily split them into even 20k addresses! i'd actually love to do so!

[o_e_l_e_o]

But there's a good chance that mixers are used primarily for illegal activities

Analysis has shown this is not the case. The majority of funds deposited to mixers comes directly from exchanges such as Coinbase and Binance from people looking to increase their privacy. Only a minority of mixer coins come from darknet markets or other potentially illegal sources.

I think, so I would not mind them becoming illegal.

Cash is used to scam people. Should we make that illegal? Encryption is used by criminals. Why isn't that illegal? The internet is used by pedophiles, cars are used by bank robbers, guns are used by terrorists.

If you make illegal perfectly legitimate goods or services which have been misused by some, then pretty much everything would be illegal. As with most things privacy related, governments and law enforcement sticking their noses in to your business, building backdoors in to messaging apps, trying to ban encryption, tapping your phone lines, monitoring your internet history, or even banning mixers, does next to nothing to stop criminals and terrorists. It is a mass surveillance tool, nothing more.

I can't understand why anyone involved in bitcoin would be pushing for less privacy, not more.