Why do mixing companies want stolen bitcoins?

[Pffrt]

Most of them send bitcoins they receive back to their next clients sooner or later..
Mixing is basically breaking the link between 2 wallets, it does not mean that the funds you receive as an output from the mixer cannot be coupled to any illegal activity... And that shouldn't be a problem either: can you prove that any fiat money in your wallet was never stolen or used to buy illegal narcotics?

Then will not someone be affected with that? Some people may use mixing service just for privacy, so that no one can trace how much BTC they have. Now, if they receive BTC originated from a scam, what would be the result if once they got caught. For example, if I use a mixing service for privacy and receive BTC which originated from hacking or such activities and later I have moved that fund to any exchange, wouldn't that result me tagging as the hacker?

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[posi]

Why do mixing companies want stolen bitcoins?

The purpose of mixing companies was enhance people anonymity since Bitcoin have a public ledger of all transactions which could make people vulnerable to attack but if hackers make use of mixing company thats not the company fault and the company tracing the source of fund mean they broke their side of the deal.

Don't they get tracked by the FBI? Even if 1 bitcoin is stolen, it can be tracked.

The FBI and other authority track them but their search is always die end.

What do they do it after they receive it? Do they sell it for monero?

Only people that work behind the mixing scheme know about that.

[teosanru]

I'm not going to talk about those who use mixing companies just for privacy, but for those that use it to launder their money. Mixing companies mix people's bitcoins by giving them other funds that are not address connected with the stolen ones. This way, the thief can use his bitcoins without worrying about anything. (Although, he has to trust the mixing company)

As a fee for this procedure, mixing companies charge their users an amount of coins. I think they pay analogously of how many coins they want to mix. Anyway, here's the question:

Why do mixing companies want stolen bitcoins? Don't they get tracked by the FBI? Even if 1 bitcoin is stolen, it can be tracked. What do they do it after they receive it? Do they sell it for monero?

Generally they don't have any record of the person who is getting it exchanged. Moreover it's pretty difficult for them to trace out whether the money is money of fraud or not. Yes FBI or similar agencies can hunt these mixers but they generally are located at offshore places where you can barely touch them as per the local laws. Moreover most of them clearly indicate on their websites about their user policy. Moreover i think if there is a complete investigation using a summon or subpoena these mixers would just provide the information about how the coins were mixed and that would be suffice for them to get out of the Radar of such agencies so mixers are always on profit in such situations.

[Quidat]

Why do mixing companies want stolen bitcoins? Don't they get tracked by the FBI? Even if 1 bitcoin is stolen, it can be tracked. What do they do it after they receive it? Do they sell it for monero?

Mixing companies doesnt like it either but basing on the service that theyre giving then they are much pretty aware that it would really be part of their day to day operation
where stolen or hacked funds will surely flow into the system.This is why we do see several mixing companies do really face up some charges due to this kind of issue
but still there are some who do continue to operate after all these years.I do agree on some points that those received coins from people who get involved on hacked or
scam will really be pass up into other clients as well, so the output or coins been generated by mixers itself cant really be considered to be clean and you wouldnt know
on when it do generated but most like this will be the case.

[NotFuzzyWarm]

And there can be a huge problem with false positives, since every coin has some percentage of taint to it

Not mine. Every Satoshi I have were earned via mining and are/were New coins.

Now for folks that buy coins, ja some coins or some part of them may be tainted.

[pixie85]

I treat BTC like I treat cash. I don't check my cash for traces of drugs, blood or semen so why should I care where my Bitcoins come from?

I think that mixers should offer their services to everyone just like doctors cure everyone. They don't discriminate between good and bad people they just do their job.

[Distinctin]

Why do mixing companies want stolen bitcoins? Don't they get tracked by the FBI? Even if 1 bitcoin is stolen, it can be tracked. What do they do it after they receive it? Do they sell it for monero?

Mixing companies never wanted it to happens, stolen Bitcoin or any crypto are sent to the other wallet using their services to get unnoticed by the authorities that are likey it pertains to happen. To the fact that these companies are not asking where it comes, no KYC, all of us are welcome to use them whether it is coming from illegal activities or not.

Any claims that put mixers as a tool to make transaction untraceable and the person who did this is true but even the authorities know it, there is no wat to catch those people who use their services, they keep themselves anonymously, it never makes sense having those transactions at all since they can still put them in jail.

[DoublerHunter]

Why do mixing companies want stolen bitcoins? Don't they get tracked by the FBI? Even if 1 bitcoin is stolen, it can be tracked. What do they do it after they receive it? Do they sell it for monero?

Mixing companies never wanted it to happens, stolen Bitcoin or any crypto are sent to the other wallet using their services to get unnoticed by the authorities that are likey it pertains to happen. To the fact that these companies are not asking where it comes, no KYC, all of us are welcome to use them whether it is coming from illegal activities or not.

^ Because that was designed just for the privacy concerned against also from the theft, revealing your identity if there is no mixing service also will probably risk your fund. Although we can't deny the fact that bitcoin mixing service is prone to use by scammers but this is a natural thing. We have nothing to do with this, even in fiat there is also a hacking incident. All form of valuable currencies was the same as bitcoin, there is clean and dirty. Nevertheless, if the bitcoin address were was marked as a scam, bitcoin mixer services will easily to spot this address, probably they can able to stop dirty money or stolen bitcoin to mix their service.

[Tipstar]

Why do mixing companies want stolen bitcoins? Don't they get tracked by the FBI? Even if 1 bitcoin is stolen, it can be tracked. What do they do it after they receive it? Do they sell it for monero?

Mixing companies never wanted it to happens, stolen Bitcoin or any crypto are sent to the other wallet using their services to get unnoticed by the authorities that are likey it pertains to happen. To the fact that these companies are not asking where it comes, no KYC, all of us are welcome to use them whether it is coming from illegal activities or not.

^ Because that was designed just for the privacy concerned against also from the theft, revealing your identity if there is no mixing service also will probably risk your fund. Although we can't deny the fact that bitcoin mixing service is prone to use by scammers but this is a natural thing. We have nothing to do with this, even in fiat there is also a hacking incident. All form of valuable currency was the same with bitcoin, there is clean and dirty.

There are many mixing companies that were shut and their fund confiscated. The one's that are surviving are mostly out of reach for US.
Though there are many people that uses mixers for privacy rather than money laundering but their proportion are similar to people using torrents for file transfer than piracy.
What's good money and bad money again is a matter of debate. What a government of a nation finds illegal may not be illegal everywhere. There are many countries in the world that happily launders money legally.

[Sadlife]

First of all they don't actually know if the given funds to mix, is stolen. It takes time to throughly verify Bitcoin amount in the blockchain. Unless its a big company with a lot of technical personnel to quickly take action. But the hacker, could easily convert it to privacy token such as Monero, and back to Bitcoin so it wont get track by the authorities.

[Insanerman]

Why do mixing companies want stolen bitcoins? Don't they get tracked by the FBI? Even if 1 bitcoin is stolen, it can be tracked. What do they do it after they receive it? Do they sell it for monero?

Mixers never 'WANT' stolen bitcoins. In fact, mixers doesn't really care about the source nor the reason behind the bitcoins they mix at all. Mixers are made to make the bitcoin untraceable (obviously). Yes, they somehow can, but they would find a lot of addresses connected to the main source, both from any sources that uses the mixer as well., hence it would be tough tracking dozens of addresses connected to their target. Also, if they use mixer, their coins can and might be also mixed with other illegal bitcoins, therefore making it require a broader investigation about each and every addresses and bitcoins mixed with their target.

[CryptopreneurBrainboss]

If I ran a mixer I absolutely would reject stolen coins that are directly traceable.

I think it is doable and won't be that difficult to execute, sure it'll drive away scammers and illegal customers from patronizing you also cut off some huge volume as they're mostly those that mixed their coins but still it'll be worth it. Some positive development in the community has made it possible to alert the general public on wallet address associated a certain hack event before the hacker is even done hacking the exchange or what ever centralized platform they're working on.

Having system put in place that blacklist funds coming from that address or any other associated one would be appreciated provided the funds are safely returned to the exchange or platforms been stolen from.  I understand this is exactly what the banks are doing that most bitcoiners don't welcome but since most mixers are centralized, having them use that to the advantage of the community would be a welcomed development.

[btc78]

Why do mixing companies "WANT" stolen bitcoins?

Seems like the word you use is Foul,Mixing company wanted them but they accept anything mixed in their system knowing all has gone thru process in legal matter,
so i think you need to edit the term instead of using WANT better use the word ACCEPT that
 two word has different meaning.

Don't they get tracked by the FBI? Even if 1 bitcoin is stolen, it can be tracked. What do they do it after they receive it? Do they sell it for monero?

These question is not in our knowledge to answer because this is technicalities .

[Yogee]

....I think that mixers should offer their services to everyone just like doctors cure everyone. They don't discriminate between good and bad people they just do their job.

But aren't hospitals or doctors suppose to file a report of patients wounded from gun shots, knives, or any objects that indicates they got it from a fight? Imagine if mixers would do the same thing and report all deposits from their customers to authorities. I doubt you would want that.

[crwth]

....I think that mixers should offer their services to everyone just like doctors cure everyone. They don't discriminate between good and bad people they just do their job.

But aren't hospitals or doctors suppose to file a report of patients wounded from gun shots, knives, or any objects that indicates they got it from a fight? Imagine if mixers would do the same thing and report all deposits from their customers to authorities. I doubt you would want that.

That's the thing with mixers, they don't ask, they just receive the coins and that's what people find convenient whether dirty or not. The faster you could do the transaction the better. I don't think they would use the mixers in which you have to fill out where it came from though.

For the OP, I'm quite curious about where they indicated they want stolen bitcoins?

[Yogee]

....I think that mixers should offer their services to everyone just like doctors cure everyone. They don't discriminate between good and bad people they just do their job.

But aren't hospitals or doctors suppose to file a report of patients wounded from gun shots, knives, or any objects that indicates they got it from a fight? Imagine if mixers would do the same thing and report all deposits from their customers to authorities. I doubt you would want that.

That's the thing with mixers, they don't ask, they just receive the coins and that's what people find convenient whether dirty or not. The faster you could do the transaction the better. I don't think they would use the mixers in which you have to fill out where it came from though.

I'm just adding to the comparison made by pixie85. Doctors would gather information about the patient and make a report. Wounded patients who are likely criminals or offenders would be considered the same as tainted BTC. If mixers should offer their service as doctors do, they will be obliged to submit data too. 

[mocacinno]

--snip--
Then will not someone be affected with that? Some people may use mixing service just for privacy, so that no one can trace how much BTC they have. Now, if they receive BTC originated from a scam, what would be the result if once they got caught. For example, if I use a mixing service for privacy and receive BTC which originated from hacking or such activities and later I have moved that fund to any exchange, wouldn't that result me tagging as the hacker?

But ARE you the hacker? If not, you should have nothing to worry about... The same with the serial number on the 50€ note in my pocket: if i go to a bank later today, and i deposit said banknote, but as soon as i hand it over to the teller he discovers the banknote was once stolen from an ATM, do you think i'll be in trouble? No, because i wasn't the one who stole it. Worst thing that'll happen is that the police might take my fingerprints and my picture so they can rule me out as a suspect. Or maybe they'll ask me if i remember where i got the 50€ note.
Not fun, but not terrible either.

I'll make a fictive case study here, i'm assuming a huge fee of 0.01 BTC/tx, irregardless of it's size (a dumb thing to do), i'm also assuming transactions 1 input + 1 output (no change, no multiple inputs):
1Victimaddress was funded with an unspent output of 1 BTC
A Phishing mail convinced him to spend his 1 BTC and fund address bc1PhisherAddress with 0.99 BTC
The Phisher mixes his funds by sending 0.98 BTC to the mixer's deposit address 1MixerAddress, he receives 0.96 BTC to his address 1CleanAddress
Some days later, you mix your 0.98 BTC and you get the unspent output that was funding 1MixerAddress as a return, so the mixer is funding 1Youraddress with 0.96 BTC.
You deposit these mixed funds to an exchange: 0.95 BTC to bc1ExchangeAddress

If we follow the uspent outputs and see wich addresses they fund, we see something like this:
1Victimaddress => bc1PhisherAddress => 1MixerAddress => 1Youraddress => bc1ExchangeAddress

Now, this is an over simplified example. You have multiple inputs, multiple outputs, the mixer does some internal reshuffeling (usually)... But even here: if the exchange sees this chain, how are they going to prove you are the owner of bc1PhisherAddress? They simply cannot because the funds passed trough 1MixerAddress. They can tell you those funds have a taint, sure, but they can never ever prove you are the phisher. Even if they would contact law enforcement, it wouldn't really matter, there simply isn't a 1:1 relationship, even in this over-simplified example.

[witcher_sense]

It is safe to assume that in the transparent bitcoin network there is literally no user or business, including mixing companies, who wants intentionally to be connected to any criminal activities in general, and stolen bitcoin in particular. As a rational participant in the network, every bitcoin user would rather transact with "clean" coins and avoid using "dirty" coins at all costs. In short, no one wants stolen bitcoins. The "problem" here is that bitcoin is designed to be censorship-resistant. That basically means no third party is able to prevent you from sending or receiving coins. If bitcoin weren't a censorship-resistant coin, it would be no better than digital fiat controlled and censored by banks. Mixing companies value that feature of bitcoin and have never tried to act as traditional banks, which are always eager to separate legal and illegal money.

[Slow death]

Why do mixing companies want stolen bitcoins?

and how will the mixer service know that funds are stolen? someone can steal many bitcoins and after years of starting to mix bitcoin in parts on the mixer service do not suspect that they are stolen bitcoins. there is one thing to note:

If governments are forcing exchanges to comply with KYC, then the mixer itself is already illegal (obviously KYC is crap that forces customers to do KYC while the owners of the exchanges are anonymous) and governments (who are people corrupt or immoral in most cases) will start chasing mixers

Don't they get tracked by the FBI?

i think the mixer owner knows that any slip will be stuck, i wonder how will the mixer owner live? he must live in fear

[davis196]

I'm not going to talk about those who use mixing companies just for privacy, but for those that use it to launder their money. Mixing companies mix people's bitcoins by giving them other funds that are not address connected with the stolen ones. This way, the thief can use his bitcoins without worrying about anything. (Although, he has to trust the mixing company)

As a fee for this procedure, mixing companies charge their users an amount of coins. I think they pay analogously of how many coins they want to mix. Anyway, here's the question:

Why do mixing companies want stolen bitcoins? Don't they get tracked by the FBI? Even if 1 bitcoin is stolen, it can be tracked. What do they do it after they receive it? Do they sell it for monero?

First answer:Because this is their "target market" and scammers/hackers are the main customers of mixing services.
Second answer:They actually "don't want" stolen bitcoins and they don't have any legal responsibility for the coins mixed by using their service.Bitcoin mixing is still legal,but the users who are mixing stolen bitcoins are the ones committing a crime.The Bitcoin mixer isn't responsible for any illegal activity committed by other people.
This is just my theory,I might be wrong.