Bitcoin Mixer Penalized by FinCEN for Violating AML Law

[LeGaulois]

Surely not everybody here but we remember about Helix, which was a popular Bitcoin mixer a few years back. It was a popular service on the dark web, especially Alphabay.

https://www.justice.gov/opa/press-release/file/1249026/download

The person behind this site was arrested a few months ago. Accused of laundering millions of dollars and they say to have succesfully identified about 300 000 bitcoins

https://www.justice.gov/opa/pr/ohio-resident-charged-operating-darknet-based-bitcoin-mixer-which-laundered-over-300-million

Today the FinCEN has fined the owner with $60 million USD for violations of the Bank Secrecy Act, unregistered money services business (MSB).
In short, for not being registered with FINCEN and didn't ask for KYC to customers.
(Yeah sure, a Bitcoin mixer with a KYC verification)


https://www.fincen.gov/news/news-releases/first-bitcoin-mixer-penalized-fincen-violating-anti-money-laundering-laws

It surely won't be the last if they're able to get the owner.  Who's next?

[notblox1]

Post title say 'First Bitcoin “Mixer” Penalized by FinCEN' and that only means that other mixers will follow next.
I am not sure what is the right solution for this, but surely doing KYC customers for mixer is very stupid.
Regulations are getting crazy, and what if they start to track and arrest not just owners but regular people and users?

Who's next?

Take your pick.

[FinneysTrueVision]

The developers of Wasabi Wallet must be feeling nervous right now. This is why they make you agree to certain terms and conditions when you first install the software; to try and cover themselves legally should governments start going after mixing services.

[BChydro]

Today the FinCEN has fined the owner with $60 million USD for violations of the Bank Secrecy Act, unregistered money services business (MSB).
In short, for not being registered with FINCEN and didn't ask for KYC to customers.
(Yeah sure, a Bitcoin mixer with a KYC verification)

These are scare tactics by the authorities so that the mixers that are running the mixers should close their doors and move on, if not they will be coming after that and it is a clear warning they are giving by fining the owner $60 million and no one would want to risk that much to run a mixing service when the authorities are after them.

[rhomelmabini]

The possible scenario is either this mixing service will comply with FINCEN's regulation or just stop the service. I wonder if it will still be called a mixing service when in fact your identity was known to anybody, mixing service should be preserving your privacy and anonymity.

LOL! Who will ever provide an identity on a darknet based bitcoin mixer operating on the darknet markets? Surely, regulators are sometimes dumb IMO, furthermore, it's a mixer and that's how it suppose to be. Well, he has been charged already and whoever comes next, "surprise surprise" says the regulators.

[carlfebz2]

Today the FinCEN has fined the owner with $60 million USD for violations of the Bank Secrecy Act, unregistered money services business (MSB).
In short, for not being registered with FINCEN and didn't ask for KYC to customers.
(Yeah sure, a Bitcoin mixer with a KYC verification)

These are scare tactics by the authorities so that the mixers that are running the mixers should close their doors and move on, if not they will be coming after that and it is a clear warning they are giving by fining the owner $60 million and no one would want to risk that much to run a mixing service when the authorities are after them.

There would be always an endless battle towards government and these mixing services.We have seen in the past that Bitmixer and other who had followed the path.
https://venturebeat.com/2017/07/25/bitmixer-shuts-down-to-make-bitcoin-ecosystem-more-clean/

Its just obvious that their reason is just trying to divert but actually theyre scared on possible things that might happened ahead.

Wont be surprised if this one will happen on recent Mixers at the moment.

[jackg]

try and cover themselves legally should governments start going after mixing services.

Yeah try sounds kinda significant there, I doubt it'd actually hold if they ended up in court in the US...


I don't think the US have come out like Europe have and said that cryptocurrencies are fairly relaxed regulation wise. This is either the government trying to make bitcoin more mainstream, trying to kill it or just a show of power for what they could do...

[DarkDays]

I am not sure what is the right solution for this, but surely doing KYC customers for mixer is very stupid.

I agree and it is surprising that especially for a mixer many people still go for KYC. KYC is questionable even in gambling and pretty much everywhere involving crypto, so doing KYC for a mixer is not such a good idea.

Regulations are getting crazy, and what if they start to track and arrest not just owners but regular people and users?

It would not make any sense for the government representative bodies to try and go for the 'small fries' where in actual fact the issue lies with providers. There will be nothing in for them, and costs and resources won't be justifiable or at least this is what my thoughts are 

[aesma]

Meanwhile fiscal paradises are doing fine, including US ones. All such services must look at relocating to such places (not US ones, though) ASAP, I don't know which would be the best.

Also keep as much info about the people involved (owners, developers etc.) secret.

[hatshepsut93]

What's going to happen if Bitcoin will get privacy updates and will essentially become one big mixer? Are these authorities going to ban Bitcoin? Or pressure developers, many of whom are public figures, to install backdoors or revert the updates, even under threat of imprisonment?

[TravelMug]

Today the FinCEN has fined the owner with $60 million USD for violations of the Bank Secrecy Act, unregistered money services business (MSB).
In short, for not being registered with FINCEN and didn't ask for KYC to customers.
(Yeah sure, a Bitcoin mixer with a KYC verification)

These are scare tactics by the authorities so that the mixers that are running the mixers should close their doors and move on, if not they will be coming after that and it is a clear warning they are giving by fining the owner $60 million and no one would want to risk that much to run a mixing service when the authorities are after them.

I don't now if FINCEN is sending a strong signal or just want to show example of future takedown.

Bitmixer.io The lagest Bitcoin mixer is about to stop working for one voluntarily shutdown their business in 2017, while BestMixer is gone, seized by the Financial Crime Investigation.

I'm sure those behind bitcoin mixers is doing everything they can to be anonymous, so it will be a cat and mouse game, not sure who's next though, your guess is as good as mine.

[hd49728]

(Yeah sure, a Bitcoin mixer with a KYC verification)

Who will use Bitcoin mixer if privacy is broken with KYC verification. It is a joke story. Unfortunately I believe that more governments will try to force companies to do KYC verifications on users, from exchanges to casinos and maybe bitcoin mixers.

Fortunately, like as happened with crypto casinos, there are nations accept crypto casinos and bitcoin mixer companies can move to nations accept their services without law enforcements with KYC verifications.

[bbc.reporter]

It appears that everyone who wants or needs anonymity and fungibility must begin to remove themselves from bitcoin and stop delegating their privacy to the owners and administrators of mixers.

[hugeblack]

When the big companies start entering the market, they will start looking for ways to ensure that it is difficult to evade tracking, so the censorship will become tighter and more people will be arrested.
Helping others hide their personal data and concealing information is a crime, so it is easy to find the legal wording for the arrest.

It surely won't be the last if they're able to get the owner.  Who's next?

When the NEXT mixer makes a mistake.

[sunsilk]

Bitmixer.io The lagest Bitcoin mixer is about to stop working for one voluntarily shutdown their business in 2017, while BestMixer is gone, seized by the Financial Crime Investigation.

I still remember this sudden closure of Bitmixer and we can connect it with this thing. Which we can say that if there will be no voluntarily stop in operation, they would be seized by fincen or any governing body of the government that's tracking the owners of it.

(Yeah sure, a Bitcoin mixer with a KYC verification)

Who will use Bitcoin mixer if privacy is broken with KYC verification. It is a joke story. Unfortunately I believe that more governments will try to force companies to do KYC verifications on users, from exchanges to casinos and maybe bitcoin mixers.

That's what fincen wants to happen but do they think that people supports anonymity would be blind to follow what they're trying to say? no way.

[NeuroticFish]

It surely won't be the last if they're able to get the owner.  Who's next?

When the NEXT mixer makes a mistake.

This is quite concerning. Clearly the authorities don't like mixers (they actually don't really like Bitcoin neither) and whenever they can they will fine them, close them and most probably also try to get all the info they can about the transactions in order to track the money flow. It's a cat and mouse game and the fact they fined mixer for not enforcing KYC tells it all: basically all mixers found in their jurisdiction can easily have the same fate.

[pooya87]

I am not sure what is the right solution for this,

an easy one, more decentralization. when there is no "owner" to catch, there is no "KYC" to force onto them and there is nothing they can do.
wanting privacy is everyone's right and they should be able to achieve it one way or another. the more KYC rules the government forces on different services the more advanced and popular the privacy improvement methods such as CoinJoin will get.

[error08]

I am not sure what is the right solution for this,

an easy one, more decentralization. when there is no "owner" to catch, there is no "KYC" to force onto them and there is nothing they can do.
wanting privacy is everyone's right and they should be able to achieve it one way or another. the more KYC rules the government forces on different services the more advanced and popular the privacy improvement methods such as CoinJoin will get.

indeed, no doubt that the government always trying to track down any illegal activities including linked to bitcoin transactions.
Remember what happened to bitmixer.io in 2017?
"On July 24 the operator of the website and bitcoin mixing service Bitmixer.io announced the operation is now ending its mixing services.
Although many Bitcoiners assumed the closure was due to law enforcement pressure the owner insists it is due to a change in his ideology."
"I hope our decision will help to make Bitcoin ecosystem more clean and transparent.I hope our competitors will hear our message and will close their services too. Very soon this kind of activity will be considered as illegal in most of countries.
Whoever owns a mixing service, better to remain anonymous for the good sake of us. we definitely need a mixer.

[KIZILAGA]

It appears that everyone who wants or needs anonymity and fungibility must begin to remove themselves from bitcoin and stop delegating their privacy to the owners and administrators of mixers.

soon they will wake up

[stompix]

This is certainly not the best bell for the mixing industry.

Not the best time to congratulate you on joining the CM gang, isn't it? 

Back to the topic, judging by the text in the link helix did a lot of things wrong, and the worse of it was that its mixing service sucked.

Working in tandem with other sites, he sought to be the ‘go-to’ money launderer on the Darknet, but our investigators once again played the role of criminal disrupters, unraveling the interlinked web from one tentacle to another.  We thank the Belizean authorities and other law enforcement agencies for their assistance on this case.”

Besides, he ran his mixing service aimed directly at the darkweb, advertising it for exactly this purpose and building other related services on it. He simply bit more than he could ever chew. I simply don't think they will go after all the mixing services, common, in three years two have been shut down and one has decided to close its door, how many more are still there and running? I think its a matter of not crossing a line, don't involve yourself directly in stupid business, they know they can't shut down all of them and stop new ones popping up, they just wanted to send a warning message so that things don't get out of hand completely.

When the big companies start entering the market, they will start looking for ways to ensure that it is difficult to evade tracking, so the censorship will become tighter and more people will be arrested.

If every single company starts requiring KYC for every damn bitcoin purchase then from a utopia we're turning 180 degrees to the mother of all dystopian futures, when the authorities will know with a  single click what you have purchased, what money you have, what's your real income, what savings you have...creepy!