How wide reaching can the consequences of Chipmixer money laundering be?

[JollyGood]

EDITED: Chipmixer has been seized by the FBI and a warrant for arrest issued for the owner/operator.

I have obfuscated the real name of the owner/operator of the Chipmixer website by replacing what appears on the FBI website with XXX instead. The original images of the FBI website and most of the original OP here will be moved to the Investigations board.

The FBI website states this about him:

Remarks:
XXX has basic training in cryptographic engineering and previously worked in decrypting communications and cyber reconnaissance. In 2016, XXX earned a PhD in electronic engineering in Taiwan.

Caution:
XXX is wanted for his alleged direct involvement in stealing identities and engaging in money laundering activity in furtherance of obfuscating and facilitating the functionality of the ChipMixer service.  Through this conduct, XXX has allegedly facilitated the laundering of approximately $3 billion USD worth of Bitcoin.  A large portion of the funds are directly associated with the victimization of people worldwide through ransomware attacks, cryptocurrency heists, the purchase of illicit drugs, the distribution and production of child sexual abuse material, and other crimes.

On March 14, 2023, XXX was charged with Money Laundering, Operating an Unlicensed Money Transmitting Business, and Identity Theft in the United States District Court for the Eastern District of Pennsylvania, Philadelphia, Pennsylvania, and a federal warrant was issued for his arrest.


-----------


What signal does this international operation to seize Chipmixer send out to other mixers? I am no expert but as far as I can see, in the end, they all will be marked by various international agencies for eventual seizing and the arrest and trial of their owners and employees.

According to news outlets, German authorities seized servers and crypto worth $46 million. US authorities have accused Chipmixer of laundering over $3 billion since 2017. If international authorities will try to seize all funds related to Chipmixer as they are deemed to be illicit, then it is possible that an attempt could be made by authorities to retrieve all the funds that have been paid out as signature campaign fees as they have effectively promoted/advertised the service.

This could end up being very messy for a lot of members in the forum that participated in their signature campaigns if the FBI and US justice department decide to force forum members to repay all the money they received from Chipmixer as signature campaign income.

How do those that participated in the Chipmixer signature campaign feel about this? Do you think you will be asked to repay all the money you received for promoting Chipmixer since the FBI and other international agencies have attributed them to money laundering?

[1714819742]

1714819742

[1714819742]

1714819742

[joker_josue]

I believe some mixer owners will get scared, and try to review their privacy level.

But even though one or two mixers might shut down for fear, most will continue to operate normally. Most will take advantage of this situation to capture more users.

I think as long as a mixer stays small, not too big like the ChipMixer, it should be able to operate without significant problems.

And for that to happen, we as users also have some responsibility. For being more diversified in using mixers, and avoiding always using the same one. If we use several different mixers, it is less likely that one mixer will get too big, and at the same time, we run less risk if any mixers are closed by the authorities.

[TryNinja]

According to news outlets, German authorities seized servers and crypto worth $46 million. US authorities have accused Chipmixer of laundering over $3 billion since 2017. If international authorities will try to seize all funds related to Chipmixer as they are deemed to be illicit, then it is possible that an attempt could be made by authorities to retrieve all the funds that have been paid out as signature campaign fees as they have effectively promoted/advertised the service.

They should first go after Google for receiving money for scam advertising (which happens on a large scale, every single day).

This could end up being very messy for a lot of members in the forum that participated in their signature campaigns if the FBI and US justice department decide to force forum members to repay all the money they received from Chipmixer as signature campaign income.

Eh... seems like a waste of time. Not everyone is from the US, and I don't think mixers by themselves are illegal.

The paper on ChipMixer by the DoJ implies that their crimes were:

1. money laundering;
2. operating an unlicensed money-transmitting business;
3. identity theft.

Would CM be hunted if they specifically analyzed the coins received before mixing them? Like, imagine them contacting Chain analysis and asking if the coins a user sent came from a DNM, and if so, prompting the user for his KYC documents... (crime 1)

Would they be hunted if they disallowed US customers and enforced that by also taking KYC documents (thus not being an "unlicensed money-transmitting business" in the US?) (crime 2)

And last, if ChipMixer didn't register his PayPal accounts with bought/stolen documents? (crime 3)

https://www.justice.gov/opa/press-release/file/1574581/download

[NotATether]

I'm already on a list. So I'm not scared of anyone.


Do you think, we would advertise a service that is only used by criminals and money launderers? I mean, that is the go-to excuse used by everyone.

Chipmixer distributed about ~300 BTC and then some (since the $300 cap was introduced) via signature campaigns during its operation, which is a small fraction of the "$3 billion money laundering" the reports like to talk about. It had an average value of (you guessed it) $300 * 55 * 383 weeks = about $6.3 million dollars at the time each of the payments were made, or $100K for each person.

The actual total is much less than that since the campaign had a few hundred users over the past 6 years and most people did not get the maximum $300 p/w (it was more like $150 on average). So the average person who stays in the campaign makes just $7,800 a year. This is a far cry from even the seized 1,909BTC. In fact it's not even 1BTC so it makes no sense for the feds to bother with such a small (to them) sum.

The other thing is how are you going to extort all these people (such as me) to pay up? Please don't tell me they will hire Lauda to do that they can't do anything, because they can't serve 300+ users all living in 50+ jurisdictions, and good luck serving users who have vanished such as figmentofmyass and yogg.  

We advertised a service that was good for the people who wanted to protect their privacy. We, like other sane people, do not support and strongly condemn immoral uses of mixers.

You should watch "Coded Bias" on Netflix. It's about AI, but you can still get Big Brother ideas out of it.

[joker_josue]

We advertised a service that was good for the people who wanted to protect their privacy. We, like other sane people, do not support and strongly condemn immoral uses of mixers.

The authorities go after the big ones, not the little ones. Furthermore, the advertisers have not committed any illegality or done anything wrong.

Users who participated in the campaign do not have any responsibility for how the company's business is done.

TryNinja gave the example of Google, but the same happens with newspapers, television, radio. They advertise many products and services, which later become mean. They just did what they were paid, within the law, everything else is beyond them.

Therefore, this is a concern that no one here should have.

[dragonvslinux]

This could end up being very messy for a lot of members in the forum that participated in their signature campaigns if the FBI and US justice department decide to force forum members to repay all the money they received from Chipmixer as signature campaign income.

I'm not convinced this will be the case, for the exact reason TryNinja explained:

They should first go after Google for receiving money for scam advertising (which happens on a large scale, every single day).

There's also a difference between knowingly advertising a service that's been deemed illegal, and unknowingly, at least as far as I understand. There's an argument for everyone still wearing the signature to now remove it for this reason, but at the same time the signature is no longer advertising an "illegal service" - because the website is no longer operational. So is kind of irrelevant either way imo.


More relevant though imo, a particularly strange part of the court documents highlights how far the reach of warrants to different services extended (or records provided) by the likes of; Google, Yahoo, Protonmail, Paypal, Binance, Dropbox, Apple, LinkedIn,, Twitter, Reddit, Hetzner, DigitalOcean... basically everyone and anything to do with the inveestigation, but bitcointalk wasn't referenced as included?

At least it's not referenced that bitcointalk provided information or received a warrant. I understand when referencing the "ChipMixer persona" - as it's reasonable to assume ChipMixer profiles would represent the ChipMixer service based on public posts - but when in reference to "hotpassion" that is accused of being the suspect's alt, there was apparently no information provided or warrant used? Would they not request information in order to double check IP addresses further, with hotpassion and/or ChipMixer profile? Maybe they did and the IP's didn't match their narrative so weren't used as evidence? Just a theory at least.

This is one part of the investigation I can't get my head around. Either bitcointalk was an exception to the rule, and was one of the few (or only) websites that didn't didn't provide records or receive a warrant, or otherwise they didn't use evidence of it (ie reference it) as it wasn't useful/accurate to their investigation. As otherwise worst case scenario there is an ongoing investigation to do with bitcointalk and chipmixer, so they didn't want to use any of the evidence in the documents - as would then have to reference the records/warrant provided - and tip users off. I don't mean to be a conspiracy theorist here, but it's super weird imo.

Ideally theymos could clarify whether any US agencies requested information, or if any was provided. Because if he can't, then it'd be an argument for bitcointalk using a canary in future.

[BitcoinGirl.Club]

How do those that participated in the Chipmixer signature campaign feel about this? Do you think you will be asked to repay all the money you received for promoting Chipmixer since the FBI and other international agencies have attributed them to money laundering?

This is bitcointalk forum not Chipmixertalk. Chipmixer was just a service like many others who advertised or advertising on the forum. So let's not make it sounds like Bitcointalk is Chipmixer.

For some reasons if they seize Google then are you asking them to seize the money of everyone who are earning from Google Adsense, Youtube monetization and many others Google service? Okay say they do, good luck with that.

More than 38 million websites worldwide use AdSense, data from 2018. Add four plus years with it. Good luck with that.
Every year, Google pays over $10 billion to its publishers, data from 2018 again. Get all those money.
Source: https://oko.uk/blog/adsense-facts

I am very lazy now to find data for YouTubers.

Fair enough, Google may comply with financial laws but don't you think today or tomorrow, by any chance when the authority will get upset for some reasons and accuse Google for privacy violation? Google even knows what key you are typing when you are using any of their application. Type a word in compose email, don't do anything else, take off your hand from the keyboard. Open the email from another device, check your draft. They are taking everything from you. With them you have no privacy. My privacy worth more than any money related things. So it's bigger crime. How long they will continue like this. Today, tomorrow, a few years from now. Then someday the eyes of authorities will open. They will shut down Google. It's what they do. Aren't they trying it with Facebook already?

Anyway, you may not aware (you should be) posting others real image, data of birth, address, phone number or even email address is prohibited. Only you can post such information on the investigation board. It does not matter if the information are even everywhere on the web. You can not post it here. So, either move it to investigation board or remove it. I will be reporting the topic after the post. If I am not wrong then, for such careless posts, you may get banned too.

[Zlantann]

I am not in Chipmixer campaign but I don't think any member of the forum is aware that the company is promoting money laundering or other illicit business transactions as alleged by the FBI and others. I am sure many participants would have left the campaign if they are aware of these allegations. These members were paid for the legitimate service they rendered to the company, hence there is no legal justification for a request to pay back what that have earned until it is proved that these members are aware or part of these alleged crime. It's really sad to see this happen, let's see how fair and just the investigation will be.

[Saisher]

This could end up being very messy for a lot of members in the forum that participated in their signature campaigns if the FBI and US justice department decide to force forum members to repay all the money they received from Chipmixer as signature campaign income.

How do those that participated in the Chipmixer signature campaign feel about this? Do you think you will be asked to repay all the money you received for promoting Chipmixer since the FBI and other international agencies have attributed them to money laundering?

This is just a speculation FBI and the US justice department's first concern is to put the owner on trial and trace hackers and scammers on the databases they seized, I've seen so many hacks and scams on the internet but there are no decisions that put the advertisers and marketers as accomplishes, they always go for the owners and perpetrators.

The FBI knows how internet marketing is being done and they never put the liability on the third-party advertisement platform there is not even a ruling on this that we can cite.

[JollyGood]

I believe some mixer owners will get scared, and try to review their privacy level.

That is one outcome, another could be that some could try to simply close shop and move on to other businesses as they could deem it a business not worth carrying on with if the threat of arrest and imprisonment looms over them all the time.

They should first go after Google for receiving money for scam advertising (which happens on a large scale, every single day).

I remember when people were making the case that search engines and websites (especially Google/Youtube) that were allowing copyright material to be uploaded and linked should be shut down on the lines of pirate video websites therefore using the same analogy I understand why you said that. Google and other search engines allow any nonsense to be indexed and then shared without any fear yet the people who have probably become victims after finding scams and siphoning website directly from hyperlinks have no way to accuse them.

We advertised a service that was good for the people who wanted to protect their privacy. We, like other sane people, do not support and strongly condemn immoral uses of mixers.

You should watch "Coded Bias" on Netflix. It's about AI, but you can still get Big Brother ideas out of it.

Exactly, we all condemn the use of illegal activity but we all would like to have privacy respected.

Thank you about "Coded Bias", I will try to check it out as soon as I have enough time to watch it.

Ideally theymos could clarify whether any US agencies requested information, or if any was provided. Because if he can't, then it'd be an argument for bitcointalk using a canary in future.

Maybe theymos will make a comment on the subject. I hope he does provide clarity on your comments.

I will be reporting the topic after the post.

What a pathetic post

It's really sad to see this happen, let's see how fair and just the investigation will be.

We all are waiting to see the outcome, let us see how far the FBI are willing to go link Chipmixer to any individual or organisation. As long as a fair and transparent investigation takes place that is all that is expected.

~

What a ridiculous post

The FBI knows how internet marketing is being done and they never put the liability on the third-party advertisement platform there is not even a ruling on this that we can cite.

I hope the issue stays to the point between FBI vs Chipmixer and that is all. If it gets to a point where campaign participants are targeted it would set a very dangerous precedent on the privacy of forum members and that would be unacceptable to most.

[TryNinja]

I remember when people were making the case that search engines and websites (especially Google/Youtube) that were allowing copyright material to be uploaded and linked should be shut down on the lines of pirate video websites therefore using the same analogy I understand why you said that. Google and other search engines allow any nonsense to be indexed and then shared without any fear yet the people who have probably become victims after finding scams and siphoning website directly from hyperlinks have no way to accuse them.

If only... I don't blame them for the indexing. The thing is that anyone can literally pay money to have a scam website linked at the top of the results. I can literally create bitcointalk100realnotscam.com and pay google so my website shows up at the top when someone googles for "bitcointalk".

[aioc]

There's going to be a huge debate about internet censorship if ever they fine signature campaign participants, they first have to prosecute and fine the domain registrar and the host hosting Chipmixer, and Google for indexing Chipmixer and everything related to why Chipmixer is online.

I don't know if there's a past ruling about liability being a third party on a site considered by US Justice Department and FBI as an offensive platform, but first, they have to prosecute and render a decision on Chipmixer before they will have long deliberation on internet marketing, which will involve internet giants like Facebook, Google and everything associated to the internet.

 

[BitcoinGirl.Club]

There's going to be a huge debate about internet censorship if ever they fine signature campaign participants, they first have to prosecute and fine the domain registrar and the host hosting Chipmixer, and Google for indexing Chipmixer and everything related to why Chipmixer is online.

Wait you are missing it. The domain registers are the hosting and domain providers, right? What about ICANN? Before everyone else, file a case against ICANN for creating the whole domain things LOL.

Wait! I think they need to ban the entire internet.

If internet was not there then we would not need ICANN. No ICANN, there were no need for domain registers. No domain registers, how would even buy Chipmixer? So let give all blame to the internet. Now since internet is illegal, all these people who are using internet are criminal. File a case against everyone in the world now LOL. We need a bigger space in jail! What? Now my 4 years girl will be jailed for using internet (watching YouTube)! Chipmixer MFs! What have you done to the world? 🤧

I am going back to my cave 🤣

[FinneysTrueVision]

I think this puts to rest those conspiracy theories about Chipmixer being a honeypot operated by government agencies.

I doubt this will affect regular users but there is a possibility they could try to shut down this forum. There is already a similar precedent when Deep Dot Web was seized by the FBI. It would be an overreach for them to go this route but if they really wanted to shut down BitcoinTalk this would be their best opportunity. As far as I'm aware Chipmixer didn't advertise anywhere else besides this forum.

[robelneo]

I think this puts to rest those conspiracy theories about Chipmixer being a honeypot operated by government agencies.

I doubt this will affect regular users but there is a possibility they could try to shut down this forum. There is already a similar precedent when Deep Dot Web was seized by the FBI. It would be an overreach for them to go this route but if they really wanted to shut down BitcoinTalk this would be their best opportunity. As far as I'm aware Chipmixer didn't advertise anywhere else besides this forum.

I don't know how is this going to be possible, it will be a subject of a very long debate and when it comes to internet marketing everything is on impression and reputation and not on liability.
Some websites do not allow gambling drugs or porn because they want to have a good reputation on the internet not because they are going to be prosecuted, and there are sites that allow it and even dedicated their sites to it, we have porn sites and cannabis sites which are considered ban in other countries.
The FBI and the Justice do not have jurisdiction when it comes to internet marketing and third-party advertisement, if there is a ruling, the big question is who are covered by this ruling, and how are they going to implement this.

[goldkingcoiner]

I think this puts to rest those conspiracy theories about Chipmixer being a honeypot operated by government agencies.

I doubt this will affect regular users but there is a possibility they could try to shut down this forum. There is already a similar precedent when Deep Dot Web was seized by the FBI. It would be an overreach for them to go this route but if they really wanted to shut down BitcoinTalk this would be their best opportunity. As far as I'm aware Chipmixer didn't advertise anywhere else besides this forum.

Oh yeah, there was such a rumor going around. I remember that!

But then again, the conspiracy theorists will just make up another conspiracy. For example, the newest conspiracy could be that the honey pot was discovered or they decided it was not viable anymore and it got shut down. And the entire seizure is just the FBI's excuse to make it look like it was never a honey pot.

Honestly, I did not really believe the first conspiracy theory so I am not going to believe any subsequent theories.

[JollyGood]

About indexing, if they make something available are they responsible if it ends up being scam related? Has that ever been tested in any Court?

When the authorities were busy chasing down so-called file sharing websites because movies and songs were being shared, they went after all of them but then left Google (because they owned Youtube) out of the picture when videos, music and movies all copyrighted were available for free on their platform.

I vaguely recall something about an investigation in to the material available on Youtube in the time of it being purchased and about lawsuits against Google but nothing happened partially because the corporations made deals with Google. I could have that wrong.

I remember when people were making the case that search engines and websites (especially Google/Youtube) that were allowing copyright material to be uploaded and linked should be shut down on the lines of pirate video websites therefore using the same analogy I understand why you said that. Google and other search engines allow any nonsense to be indexed and then shared without any fear yet the people who have probably become victims after finding scams and siphoning website directly from hyperlinks have no way to accuse them.

If only... I don't blame them for the indexing. The thing is that anyone can literally pay money to have a scam website linked at the top of the results. I can literally create bitcointalk100realnotscam.com and pay google so my website shows up at the top when someone googles for "bitcointalk".

[yudi09]

The paper on ChipMixer by the DoJ implies that their crimes were:

1. money laundering;
2. operating an unlicensed money-transmitting business;
3. identity theft.

I rarely leave posts in reputation threads and this time with good intentions filled with curiosity I would like to ask a few questions regarding the ChipMixer website seizure.

First, I am sorry to hear about this incident. Secondly, if the alleged seizure of ChipMixer is due to the crimes as you say, namely;
1. money laundering;
2. running an unlicensed money-transmitting business;
3. identity theft.
Will the International authorities follow up with bitcointalk?

Thank you for your positive response.
https://www.reuters.com/technology/cybercriminals-crypto-platform-chipmixer-taken-down-says-europol-2023-03-15/

[fortunecrypto]

Will the International authorities follow up with Bitcointalk?

There's been a lot of discussion about Bitcointalk's liability in the case of Chipmixer there's already a ruling on this and so far it is not yet reformed so we can say that it still applies to this case
I would like to cite

Section 230 of a section of Title 47 of the United States Code that was enacted as part of the Communications Decency Act of 1996, it says Section 230(c)(1) provides immunity from liability for providers and users of an "interactive computer service" who publish information provided by third-party users:

Section 230 was developed in response to a pair of lawsuits against online discussion platforms in the early 1990s that resulted in different interpretations of whether the service providers should be treated as publishers or, alternatively, as distributors of content created by their users

https://en.wikipedia.org/wiki/Section_230

Eliminating this section 230 will reshape the internet and this is the same defense Facebook and other social media platforms uses to defend themselves against the attack and their liability for the content their users uploaded.

[JollyGood]

There's going to be a huge debate about internet censorship if ever they fine signature campaign participants, they first have to prosecute and fine the domain registrar and the host hosting Chipmixer, and Google for indexing Chipmixer and everything related to why Chipmixer is online.

I don't know if there's a past ruling about liability being a third party on a site considered by US Justice Department and FBI as an offensive platform, but first, they have to prosecute and render a decision on Chipmixer before they will have long deliberation on internet marketing, which will involve internet giants like Facebook, Google and everything associated to the internet.

It is highly unlikely any law enforcement agency in the US will go after Google (or any other US based tech giant) in any capacity unless it involved any competition laws or tax evasion.

Crypto is still relatively new when comparing to traditional finance and the unfortunate association and correlation people make between crypto and crime make it an easy target. That should not negate anything that Chipmixer has been accused of because if misuse has taken place the owner/operator of Chipmixer will probably be arrested and brought before a court to face charges which he will have every opportunity to challenge and defend.

I have to say though, seeing negative headlines again about crypto and criminal activity (such as money laundering) does not look good for those that know very little about crypto or are just taking their first steps in buying and trading.

I think this puts to rest those conspiracy theories about Chipmixer being a honeypot operated by government agencies.

Yes it does but if I recall correctly those conspiracy theories were not the majority view, they were far and few.

I doubt this will affect regular users but there is a possibility they could try to shut down this forum. There is already a similar precedent when Deep Dot Web was seized by the FBI. It would be an overreach for them to go this route but if they really wanted to shut down BitcoinTalk this would be their best opportunity. As far as I'm aware Chipmixer didn't advertise anywhere else besides this forum.

I never contemplated a scenario before where this forum could be viewed as a problem by any governmental agency but now that you mention it, would it really be a surprise if they seized the domain and shut down the forum?