First mixer sanctioned by US authorities (blender.io)

[TryNinja]

I haven't seen a single mention about this on the forum.

U.S. Treasury Issues First-Ever Sanctions on a Virtual Currency Mixer, Targets DPRK Cyber Threats

WASHINGTON – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned virtual currency mixer Blender.io (Blender), which is used by the Democratic People’s Republic of Korea (DPRK) to support its malicious cyber activities and money-laundering of stolen virtual currency. On March 23, 2022, Lazarus Group, a DPRK state-sponsored cyber hacking group, carried out the largest virtual currency heist to date, worth almost $620 million, from a blockchain project linked to the online game Axie Infinity; Blender was used in processing over $20.5 million of the illicit proceeds. Under the pressure of robust U.S. and UN sanctions, the DPRK has resorted to illicit activities, including cyber-enabled heists from cryptocurrency exchanges and financial institutions, to generate revenue for its unlawful weapons of mass destruction (WMD) and ballistic missile programs.

This is a first, but the same could happen agaisn't Chipmixer and/or other mixers. Is anyone else worried about what may happen if you move funds from a mixer to big exchanges after this? Of course one could always do another hop to "unlink" a set of coins from a mixer, but how many would be enough?

[stompix]

Is anyone else worried about what may happen if you move funds from a mixer to big exchanges after this? Of course one could always do another hop to "unlink" a set of coins from a mixer, but how many would be enough?

I think that's the least of your worries if you're in the US.
Lately exchanges have increased their demands about the funds inch by inch, asking you when you get them, where you get them, proof on how you've got them, with what funds, probably ending with questions about the the pubic hair color of the dog of the cousin of the one that sold you the coins. So just obfuscating the chain of transactions won't help too much you in these cases.

That being said, I made once stupid mistake of sending coins mixed through CM directly to Bitstamp the mother and father of all KYC, nothing has happened yet, deposit and SEPA without a hiccup, so probably it's not yet such a big deal. Exchanges will try to delay any such actions as long as they can, they are losing money and volume, they might want to obey the law but not to the point when it strat costing them money.

[logfiles]

As we speak, Blender.io and their wallet, Blenderwallet.io are offline.

At first, they said that blenderwallet was hacked in July last year - https://bitcointalk.org/index.php?topic=5335884.msg57299512#msg57299512

And then they announced that they are shutting down the wallet and mixer for "maintenance" on 5th April this year - https://bitcointalk.org/index.php?topic=5052876.msg59765651#msg59765651

Services blender.io and blenderwallet.io are closed for maintenance. Completion dates for technical work will be announced later.
Your funds in Blender Wallet are safe. You can wait for the service to open or access them with a mnemonic and passphrase in the Electrum wallet or any other compatible wallet.
For those who have not received mixing results, they will be sent when the service starts.
We apologize for the inconvenience, please do not worry, the services will be resumed in the near future

Sincerely, which kind of service can shut down for over a month to carry out maintenance?

I think that was their exit plan, and they are not coming back. Perhaps they noticed they were being watched. Some of us remember how Bitblender left the scene?

[PX-Z]

I think that was their exit plan, and they are not coming back. Perhaps they noticed they were being watched. Some of us remember how Bitblender left the scene?

So far, no users posted complains regarding locked account/funds or whatsoever there on their ann. So it's good to assume that no users faced a problem there unlike bitblender, well, maybe in the next few months.

Is anyone else worried about what may happen if you move funds from a mixer to big exchanges after this?

That's a big no for me. Even just gambling website funds to an exchange is risky, how much more from a mixer.

But if in any case that chain analysis can detect/linked the addresses of any mixer then its really fuck up.

[LeGaulois]

but how many would be enough?

3 hops for something like an exchange, and 5 hops for something like a government (since a government has more resources) That's what is supposed to be but generally, it's the opposite. Most governments have fewer resources than companies using blockchain forensic companies.

The number of hops was something Andreas was talking about in a video long ago, and he argumented. I'm too lazy to look what's the exact video but it should be a video about coinjoin or mixers

As for blender.io, I was smelling something like this the last month but since the proof is only what matters and I didn't have...
It won't be the last for sure but the persons running such service should anticipate before. It's all about being pro-active

That being said, I made once stupid mistake of sending coins mixed through CM directly to Bitstamp the mother and father of all KYC, nothing has happened yet, deposit and SEPA without a hiccup, so probably it's not yet such a big deal.

I did it so many times before with ChipMixer and Kraken and never got a single problem (but yeah I admit bitstamp is the whore of the KYC). I have probably never used the Kraken account for something else other than CM. Account 100% chipmixed and kraken were happy with me

[Husires]

I remember that last year one of the blenders was Sized in the Netherlands or one of the European countries on charges of money laundering, but I do not think that such blenders will ever operate in the United States.

if the United States wants to stop the activities of the mixers, they can do so easily if they have the resources and for a mixer like chipmixer will try to drain all the available chips, the site will provide new chips, they can monitor who sells it to Chipmixer and they will be able to reach the state or the party that runs the site, and so on for all blenders.

If blenders don't keep customer records, that's good news.

For the average user, most likely he will not have a problem using the blender, but he must be confident that these blenders do not provide 100% privacy.

[dkbit98]

U.S. Treasury Issues First-Ever Sanctions on a Virtual Currency Mixer, Targets DPRK Cyber Threats

I think this was done mostly because Blender is Russian based mixer, and with current situation everything that comes from that country is considered bad.
This world we live in today is starting to look more and more like one from George Orwell's book 1984, ''War is peace, Freedom is slavery Ignorance is strength''.
Now that people are fighting each other who is wrong and who is right, they can go ahead with their plans and control everything and everyone more than ever.

Is anyone else worried about what may happen if you move funds from a mixer to big exchanges after this? Of course one could always do another hop to "unlink" a set of coins from a mixer, but how many would be enough?

Best solution would be not to use centralized exchanges that can one day block your account or seize your coins just because of your haircut, way you walk, or because you speak anything against government.
Using decentralized exchanges and P2P trading is always possible and I know people are doing face to face trades more than ever, but using anything else you should be ready for anything to happen.
There are some tools we discussed before that can check if addresses are ''tainted'' and risky or not, but I think it's all bias and controlled by some central authority.
If you think this is bad, what if in near future we have CBDC crap that can be spent only for things that is allowed to be spent in specific time period and than it's gone, that is next level craziness and they are working on it.

[bbc.reporter]

This is a first, but the same could happen agaisn't Chipmixer and/or other mixers. Is anyone else worried about what may happen if you move funds from a mixer to big exchanges after this? Of course one could always do another hop to "unlink" a set of coins from a mixer, but how many would be enough?

I cannot find the video, however, Charlie Lee said it would take at least 7 hops before an exchange will not mind where your coins came from anymore. The question however was only about avoiding problems on your account in Coinbase if your coins came from a gambling site. We cannot be quite certain if it would work if the source of your coins was from something more criminal.

[crwth]

This is new to me, and I haven't seen anything about it being the first mixer sanctioned by the US. I think the people affected have been in the US, and they have a lot to fight for in that hack. There are a lot of people affected by the Axie Infinity hack. I didn't know that Blender was used to mix the funds etc.

My question would be is "Would this affect the different mixers as well?"

[o_e_l_e_o]

like chipmixer will try to drain all the available chips, the site will provide new chips, they can monitor who sells it to Chipmixer and they will be able to reach the state or the party that runs the site

No one sells coins to ChipMixer. The chips they distribute are created from consolidated outputs from other users' deposits. For a large entity to "drain all the available chips", as you put it, they would first have to deposit at least as much bitcoin as the total value of all the chips. If they then drained all the available chips, then ChipMixer could simply recreate the same number of chips again from the deposit they received from said entity. There is no one selling coins to ChipMixer and so no one to track or monitor.

Government simply could use service offered by those blockchain forensic companies though. It's more effective (and might be cheaper) than creating their own forensic from nothing.

We already know that dozens of different government departments in the US alone spend tens of millions of dollars on the service of blockchain analysis firms. For example:

https://www.usaspending.gov/keyword_search/chainalysis
https://www.usaspending.gov/keyword_search/ciphertrace
https://www.usaspending.gov/keyword_search/coinbase
https://www.usaspending.gov/keyword_search/elliptic

I cannot find the video, however, Charlie Lee said it would take at least 7 hops before an exchange will not mind where your coins came from anymore.

Pure guesswork, and it highlights just how stupid taint and taint analysis is. Some exchanges might think coins are clean after 3 hops, some might think 7, some might want more. Completely arbitrary nonsense.

[BlackHatCoiner]

Is anyone else worried about what may happen if you move funds from a mixer to big exchanges after this?

But, isn't this a problem since KYC became a thing? What's new now? Bitstamp, Binance, Coinbase etc., always treated bitcoin as non-fungible and enforced these arbitrary rules against mixing. You're not affected if you don't use centralized exchanges.

And, to be honest, I find it unreasonable to do such thing; you have obfuscated your outputs, made your activity hard to trace, enhanced your privacy and you'll end up handing out all of your personal info to some corrupted companies which will then sell it to politicians, private companies, the dark net etc.? Doesn't make sense. You either protect your privacy or not.

Of course one could always do another hop to "unlink" a set of coins from a mixer, but how many would be enough?

[NeuroticFish]

Bitstamp, Binance, Coinbase etc., always treated bitcoin as non-fungible and enforced these arbitrary rules against mixing. You're not affected if you don't use centralized exchanges.

I did sell at Binance coins mixed at Chipmixer in the past year. Nothing bad has happened, everything was processed just like other non-mixed coins.
So for now I think that the "fear" of mixing may be a bit exaggerated. Or maybe it depends on the exchange too.

Of course, reading TOS is a must. Of course, testing the waters may be useful. Of course, keeping too much money on centralized exchanges is (and was) never a good idea.

[BlackHatCoiner]

So for now I think that the "fear" of mixing may be a bit exaggerated. Or maybe it depends on the exchange too.

It's not certain that your coins will be held until you provide more info, neither that they won't be accepted because they're blacklisted, but is it worth it? I mean, you're mixing to get privacy, but you're going straight to those anti-private and ambiguously deceitful companies? That's like pulling the devil by the tail.

I'm in the favoring position to have never used any centralized exchange. I only exchange decentrally whenever I want, whatever I want, with whoever I want. I'm mixing, because I can; because it's primarily a smart decision. Using a centralized exchange, hoping that your coins will be approved means you're somewhat agreed with this "taint" rule, which is against the principles of bitcoin.

And that's just one of the many reasons you should avoid CEX.

[NeuroticFish]

It's not certain that your coins will be held until you provide more info, neither that they won't be accepted because they're blacklisted, but is it worth it? I mean, you're mixing to get privacy, but you're going straight to those anti-private and ambiguously deceitful companies? That's like pulling the devil by the tail.

Well, let's say somebody has 1000 BTC as a single input. Maybe he doesn't want to tell the CEX he has 1000 BTC and a mixer does that even if only 0.1 BTC is mixed and the rest is kept "clean".
It's not my case (I wouldn't have mind it was ), but privacy can go in various ways.

I'm in the favoring position to have never used any centralized exchange. I only exchange decentrally whenever I want, whatever I want, with whoever I want. I'm mixing, because I can; because it's primarily a smart decision.

It's a smart decision indeed, and I think that you're one of the lucky few that could actually do that. I think that the majority just won't. Unfortunately.

Using a centralized exchange, hoping that your coins will be approved means you're somewhat agreed with this "taint" rule, which is against the principles of bitcoin.
And that's just one of the many reasons you should avoid CEX.

True. But I don't think that they're keen to lose customers and get some drama instead.
Of course, if one sends 1 mixed BTC to CEX in one step, he's "asking for it".


What I've done was basically testing with rather small amounts.

[BlackHatCoiner]

Well, let's say somebody has 1000 BTC as a single input. Maybe he doesn't want to tell the CEX he has 1000 BTC and a mixer does that even if only 0.1 BTC is mixed and the rest is kept "clean".

This is the distinction I'm talking about.

One may have 1000 BTC, another may not want to reveal he's the owner of a hundred UTXOs, another may not want to reveal he's mined a block himself, another may not want to reveal he was a user of another exchange before etc. But, that's a private matter.

The "taint" nonsense is a political matter. CEX's ask for KYC, sell info to basically everyone, mark some coins as "dirty", not because they will prevent money laundering, tax evasion etc., but to gain data, which is ultimately a weapon of control. If everyone abruptly refused to continue using Binance, because of this, be sure that they'd change their ToS before tomorrow morning.

It's a smart decision indeed, and I think that you're one of the lucky few that could actually do that. I think that the majority just won't. Unfortunately.

Better late than never.

Of course, if one sends 1 mixed BTC to CEX in one step, he's "asking for it".

It doesn't have to be a mixed one. Your coins may be "tainted" and you may not have a clue. Just don't use a CEX, end of story.

[buwaytress]

Had to say I was had by the title (thinking, how on earth could they sanction Blender, did they buy them out?), then my "oh" moment came.

Could be the start, but you have to say sanctions against Bitcoin addresses haven't really worked out well for them -- and then there's the complex issue of taint as pointed out above, if someone were to want to sabotage a wallet, or taint spray attacks.

Great explanation from  o_e_l_e_o on ChipMixer and how unscientific any of the current analytics people are and how vulnerable they would be to a taint spray attack generating majority of false positives. Just thinking, even if they could find a link (track someone sending CM coins), they couldn't easily follow the path if they intended to since chips aren't even chronologically linked to the source inputs.

[o_e_l_e_o]

You have zero privacy when you use a CEX. Everyone knows that. So here's the way I see it:

Withdrawing coins from a CEX:
It makes sense to mix these coins. If you don't mix them, then the exchange in question will absolutely track everything you do with these coins, link that info to your real identity, and then share and sell this data. The only reason you might not want to mix your coins is if your only plan is to hold them in your own wallet and later transfer them back to the same exchange, although even then you probably want to mix them to prevent the exchange from tracking exactly how many coins you are holding and in which addresses you are holding them in.

Depositing coins to a CEX:
Mixing coins before you deposit them to a CEX will prevent the CEX from knowing where your coins came from. If the source of your coins is the same CEX, then mixing them achieves very little at this point. If the source is another CEX, then you may have a reason to mix them if you don't want one CEX to know about your activities at another CEX. If the source is somewhere else, then mixing them may very well be a good idea, for example if the CEX would otherwise refuse your coins since they came from a gambling site. Once the coins are on the CEX, though, then your privacy is zero.

A better option all round is, of course, to stop using services which spy on you and censor you.

[LeGaulois]

Government simply could use service offered by those blockchain forensic companies though. It's more effective (and might be cheaper) than creating their own forensic from nothing.

I don't want to be a politician but a government shouldn't use a 3rd party to run government activity because that's something that can become harmful to the country's interests. It's not specific to the crypto sphere but for almost anything. We can see the result in The U.S. with the health system or more recently with the war in Ukraine (yes I take examples that are extreme)... Or European data sent to US servers and fuck people's privacy...

Being too dependent on someone (person/company/country) can be detrimental to you and can even prevent your development.

On the other side, I do agree with your point about the cost. It's surely cheaper to outside the job but developing your own infrastructure from scratch and exactly tailored to your need in the long term can be more rewarding. They have rather chosen this approach in our country and started 2 years ago by recruiting all kinds of specialists. People with real crypto expertise are so rare and in-demand that as you can imagine, they are extremely well paid.

You have zero privacy when you use a CEX. Everyone knows that.

One of the problems now is that since taxes and regulations emerge, some citizens don't really have the choice to use a CEX otherwise you become a cheater (without really wanting to become one)

A precision about this news:

all transactions made by Americans in the United States via Blender.io are blocked, unless an authorization is issued

an authorization is issued  
Please Sir, can i mix my coins? Great project!

[bitmover]

The number of hops was something Andreas was talking about in a video long ago, and he argumented. I'm too lazy to look what's the exact video but it should be a video about coinjoin or mixers

I Believe this is the video you are talking about
https://www.youtube.com/watch?v=BILcJ3WtdLQ

There is no exact number of how many hops you need.
Antonopoulos says in the video that most of the coins have been in mixers in the past, and if they say they need a high number of hops they will find that most of the coins have been there.


I have been searching about how many coins have been through mixers and I found some interesting graphics.


https://www.coindesk.com/layer2/privacyweek/2022/01/25/how-popular-are-crypto-mixers-heres-what-the-data-tells-us/

The most interesting is this chart. Fresh coins are coins that have never been mixed before.




Those charts shows basically that near 70% of all mixed coins per month have never been through a mixer before.

So the number of "tainted" coins is growing day by day in a fast rate.

[BlackHatCoiner]

I Believe this is the video you are talking about
https://www.youtube.com/watch?v=BILcJ3WtdLQ

I'm surprised a bitcoin evangelist like Andreas didn't say anything about the utter fatuity that is "tainted coins". The things he explained is what's a tainted coin and how to make them "clean" by doing K+1 hops, which is not the kind of behavior I'd expect from him. It'd be much more reasonable to say "Don't deal with folks who don't want your privacy", instead of "This is how you'll deal with folks who don't want your privacy".

So, what happens once exchanges begin requiring more stuff to mark your coins as "clean"? What if despite K+1 hops, they also want from your transactions to not be included into the same block(s), as that'd show you're cheating? What if they start asking you to tell them where did you find your coins? Et cetera.

You shouldn't try to make them "clean", but refuse to accept they're tainted, which means, to say no to the exchange.