Bitcoin Mixer Penalized by FinCEN for Violating AML Law

[Lucius]

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

Next is the one who does something like this in a way that doesn’t protect himself. If this kind of service operates from a country that really do not care what the US thinks or says, and if the owner has protected his identity, then I don't see why we should worry that the mixers won't survive.

There is no doubt that some governments would do anything to completely prevent mixing, but they would also be very happy to be able to find a way to destroy Bitcoin - none is something that will have a positive outcome for them, no matter how much time and money they spend.

[1715237586]

1715237586

[1715237586]

1715237586

[1715237586]

1715237586

[shield132]

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?

At first, people still complain about crypto exchanges asking for KYC documents and is there really someone asking for bitcoin mixer and KYC verification? It's very hilarious.

For me, Bitmixer was just a legend that happened in the crypto world. This website started well, offered an innovative product, did an amazing job, got a hell of a profit and ended up well. This is how real professionals act! They knew a time when to stop.
But... Another legend is Chipmixer. If I didn't know the background story of bitmixer and most of the things about them, then I would directly prioritize chipmixer. They started their business during the most dangerous time, they started when even bitmixer decided to close, were under the attention of media because a lot of bitcoins were laundered under using their service and still continue operation. I have no words to say...

Also, there is one thing: When you solve one problem, the second one arises. In history, there was time when they weren't able to identify and track bitcoin users and now this time came, they are great at catching people (and that's good if they catch scammers and this kind of people). But, tomorrow things will develop further and they won't be able to track again for a while. This is an endless cycle where the rabbit runs and then catcher follows it.

[yazher]

I have read this kind of investigation and it took them years to finalize the suspected Mixers or Blenders to get penalized and finally shut them down. Most of those sites just close their services before such things happened but those who are caught and found guilty with the said violations will get penalized like what we have seen in this topic.

In most cases, they just stop their services no matter how long they have been working. That's why we better be careful about choosing which Bitcoin Mixers we will use to avoid such things in the future.

[witcher_sense]

Precedent. The Ministry of Justice first called the Bitcoin Mixing a crime.

Bitcoin mixing is simply a process of obfuscating of bitcoin transactions, we ourselves can mix our transactions without having to involve any third party solutions such as mixing services or coinjoin coordinators. I can create a transaction with many inputs and outputs, for example, and therefore obfuscate it. From the protocol point of view, I am just using its capabilities, nothing else. Will it be considered money laundering, if it is not possible for surveillance companies to determine the source of funds and identify the participants of the transaction? Mixing itself is not a crime, because mixing might be done for various reasons and different purposes.

Let us assume, for example, that bitcoin is completely fungible and untraceable like physical cash is. You and your friend Bob hand over Alice two bitcoin banknotes, which are absolutely indistinguishable from each other. Alice gives you Bob's banknote, the other banknote goes to Bob. As it turned out, Bob was a drug dealer and obtained his banknote selling illegal stuff. What Alice did is act as a mixing service, that is, according to FinCEN, commit a crime. What she actually did is give you someone else's fungible bitcoin banknote. Does it make sense? Can Alice be accused of money laundering? Doesn't it sound like an attack on fungibility of bitcoin?

[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.

soon they will wake up

I disagree. There are many people in the cryptospace that do not want or need anonymity and privacy. Mixers are a needed solution for some bitcoin holders, however, they should know that it is not perfect.

[Lordhermes]

Is bitcoin mixing system really bad,? I dont think is appropriate to conduct KYC and the whole system is supposed to be anonymous, releasing identify isn't fair to some extents with mixing industries, I really doubt if the victim would agree with FinCEN or else will take them to court if actually he knows what to do.

[davis196]

I remember Helix,but I've never used it.
Every darkweb marketplace/BTC mixer owner should be aware that the police is going to catch him,sooner or later.
I think that the remaining darkweb markets are switching towards monero,because most Bitcoin mixers aren't reliable.

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.

More decentralization means that everyone will become an "owner",which means that everyone using such decentralized platform is a possible suspect of a police investigation.

[pooya87]

I disagree. There are many people in the cryptospace that do not want or need anonymity and privacy. Mixers are a needed solution for some bitcoin holders, however, they should know that it is not perfect.

every human being both needs and wants privacy. anyone who claims they don't need it don't understand what privacy means until theirs is invaded then start their moaning about how the invaders wronged them!

[Shasha80]

If like this is how our privacy when making Bitcoin transactions can be threatened, however the government wants to avoid people from
using Bitcoin mixers. Hopefully in the future the government will not go any further by banning the use of mixing systems. If that happens
it could threaten the future of the mixing industry, even though I really need a Bitcoin mixer to be safe from hackers.

[witcher_sense]

I disagree. There are many people in the cryptospace that do not want or need anonymity and privacy.

Who are these people who don't want to be protected from a 5$ wrench attack? They must be stupid or frivolous. In public, transparent systems of money such as Bitcoin blockchain, it is compulsory to never disclose your identity to unwanted persons and give them any information about your addresses, history of your transactions and amounts of bitcoins you have. You simply have to preserve your privacy unless you are eager to get robbed by some bad guy.

[Sithara007]

Do you guys remember what happened to Bestmixer.io? Their domain was seized by the Dutch authorities, and the funds were confiscated. I don't think that it is possible for Bitcoin mixers to exist publicly. They need to move their operations to the dark market. Otherwise, it is just a matter of time before the authorities seize the funds and arrest whoever operates the mixer.

[NotATether]

This is why you should never run a mixer in the US, or any bitcoin trading service for that matter. They equate trading bitcoin with "money transmitting without a license", such licenses and permits are impossible for a normal person to get because they still think that bitcoin needs the same laws as banking because they can't physically see bitcoin like you can see cash.

Governments have never liked privacy post-2001 anyway.

[dansus021]

This is why you should never run a mixer in the US, or any bitcoin trading service for that matter. They equate trading bitcoin with "money transmitting without a license", such licenses and permits are impossible for a normal person to get because they still think that bitcoin needs the same laws as banking because they can't physically see bitcoin like you can see cash.

Governments have never liked privacy post-2001 anyway.

Yep i mean any government mostly doesn't like about privacy with reason to "protect the citizen" against crime, and before this i heard the news about https://www.zdnet.com/article/money-from-bank-hacks-rarely-gets-laundered-through-cryptocurrencies/

[tippytoes]

Do you guys remember what happened to Bestmixer.io? Their domain was seized by the Dutch authorities, and the funds were confiscated. I don't think that it is possible for Bitcoin mixers to exist publicly. They need to move their operations to the dark market. Otherwise, it is just a matter of time before the authorities seize the funds and arrest whoever operates the mixer.

Their last tweet that you can see from their account - https://twitter.com/bestmixer6?lang=en



But when you check the site mentioned, it is showing Apache 2 Test PAge. Seems that they are not successful in re-launching their business.

Bitcoin mixers should register their business in a more friendly crypto countries. I don't know what the government is thinking about asking KYC from bitcoin mixer's clients. Are they really ignorant about the purpose of bitcoin mixers? Have anyone heard a particular bitcoin mixer requiring KYC from their clients? I don't think so.

[stompix]

Their last tweet that you can see from their account - https://twitter.com/bestmixer6?lang=en
But when you check the site mentioned, it is showing Apache 2 Test PAge. Seems that they are not successful in re-launching their business.

That's not the original bestmixer, it's a scam , see the topic here
The original was .io not biz, it's just one of the thousands of scams with similar domain names trying to fool newbies.

[dikobraz123]

Well, if the authorities/banksters have BTC mixers in their crosshairs now, this will probably give even more momentum to XMR.

[FACE 2 FACE]

The bitcoin mixer business is too lucrative to stop doing it. I'm sure that even if the owner of this mixer is found and imprisoned for 50 years, there will still be those who want to continue this epic, because the prospect of making $ 300 million is worth the risk)

[acquafredda]

The main point in this whole story (and in many similar others) is that mixing businesses are centralized services.
As long as there is a single point of failure, namely a guy running a specific service, nobody can think of keeping their anonimity sheet clean. We know the same is applicable to any other service provider, exchange, payment processing company, atm operator etc.
The very reason why bitcoin is still around after 11 years is that, as we speak, there is no single point of failure in the network.
This is why decentralized solutions are being developed.

[LeGaulois]

Do you guys remember what happened to Bestmixer.io? Their domain was seized by the Dutch authorities, and the funds were confiscated. I don't think that it is possible for Bitcoin mixers to exist publicly. They need to move their operations to the dark market. Otherwise, it is just a matter of time before the authorities seize the funds and arrest whoever operates the mixer.

Just thinking about it

What about if every mixer is forced to be registered on jurisdiction and needs to abide by the laws (I'm talking about the KYC verification).
The business could still exist and be viable. Why? Because the persons using such service don't get privacy from the business but still get it from the blockchain, and that's what people are looking to get

Sure, let's say you're laundering money, the authorities won't be able to know which mixer you used. And the majority of people do not wash bitcoin for illegal purposes

[bbc.reporter]

I disagree. There are many people in the cryptospace that do not want or need anonymity and privacy. Mixers are a needed solution for some bitcoin holders, however, they should know that it is not perfect.

every human being both needs and wants privacy. anyone who claims they don't need it don't understand what privacy means until theirs is invaded then start their moaning about how the invaders wronged them!

I agree from that perspective, however, I was telling the one who replied that many people presently do not need it or do not care to need it because most of them only use bitcoin as a speculative investment.

It will come back to them and might cause them problems, however.