Bitcoin mixing is NOT money laundering, per se

[Medusah]

What is the current status? Was the proposal been accepted?

It is still open for comment for another 77 days. There are currently 109 publicly posted comments which you can view here: https://www.regulations.gov/document/FINCEN-2023-0016-0001/comment. They are unanimously in opposition to this proposed piece of legislation, although I fully expect the government to completely ignore all these comments and opposition. They've never let the interests of the people stand in the way of their tyranny before.

I cannot view this from Tor.  It says:  "We're sorry, an error has occurred".  Does it happen to you too?

Edit:  Same thing from web archive:  https://web.archive.org/web/20231105052053/https://www.regulations.gov/document/FINCEN-2023-0016-0001

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[o_e_l_e_o]

I cannot view this from Tor.  It says:  "We're sorry, an error has occurred".  Does it happen to you too?

Edit:  Same thing from web archive:  https://web.archive.org/web/20231105052053/https://www.regulations.gov/document/FINCEN-2023-0016-0001

No, works fine for me on Tor.

The archive.org link also loads just fine for me on Tor but does display the error you mentioned in the archived page. This will be a problem with their archiving though, not with Tor.

Edit: Try this link: https://archive.li/sRjmi

[arabspaceship123]

If you're living in the US and this bills passes, you should absolutely forget about centralized exchanges, as you may be accused of funding terrorism because of potentially bad coin history. Unless you buy and store all your bitcoin there, which would nullify Bitcoin as concept in the first place, and you shouldn't do it.

If the bill passes it's going to make bitcoin a different coin to what Satoshi would've wanted it to be.

it actually says if a service is defined as a CEX then it needs to be regulated.. it does not say all services need to be defined as a CEX

If a store accepts bitcoin and does not keep them in a regulated exchange, it can be considered "obfuscation of destination".  If you swap bitcoin for an altcoin and then the altcoin for bitcoin, it can be considered "obfuscation of destination".  If you move your bitcoin across your wallets, it can be considered "obfuscation of destination".  Anything can be considered to obfuscate unless you report all of your transactions to the government or do everything inside a regulated CEX.

If ppl want to keep some or all of their transactions private by using mixers it doesn't mean they're trying to obfuscate them because they're trying to hide illegal activity. If the bill passes American's won't be able to keep any of their activity private.

[o_e_l_e_o]

If the bill passes it's going to make bitcoin a different coin to what Satoshi would've wanted it to be.

For most people, that's already the case.

From the start of the whitepaper:

What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.

Now, how many people actually use bitcoin without a trusted third party? Do you buy, sell, or trade on a centralized exchange? Trusted third party. Do you spend your bitcoin via a third party payment processor such as BitPay or Coinbase Commerce? Trusted third party. Do you use a closed source wallet such as Trust or Coinomi? Trusted third party. Does your open source wallet sync with third party servers? Trusted third party.

This legislation will essentially make it illegal just to own your own bitcoin, but most people already use bitcoin in a way which is very different to what Satoshi intended.

[YUriy1991]

And unfortunately our behavior is at the root of the problem, I find that people love to blame products when it is the user who is responsible for that behavior. What I find funny is that the law enforcement agencies keep pretending that they only see the wrongdoing of these products and blame it.

Investors have made a lot of money in recent years. They also want privacy, namely requiring anonymity when transacting cryptocurrencies to be comfortable, in this case BTC. To do this, this is where they need an intermediary who is willing to do this for them, one of which is a mixing service which of course can be trusted, but this mixing service also has weaknesses of course.

That is, the government can at least see if there is something strange and always wants to intervene in terms of regulations. Well, regarding the legality of mixing services will depend on where the user comes from and the laws that apply there, but I think perhaps these people (Investors) have built in better security and are prepared for the additional costs that will arise.

[arabspaceship123]

It's true Bitcoin's being used in a different way to what Satoshi would've intended but we've still got a choice how to store cryptos. If ppl are holding the power in their hands they'll decide if they want to use exchanges. If ppl get forced by legislation it means they'll lose the choice so it's messed up. If the bill's passed it's going to put Americans off buying cryptos.

Is the bill going to apply to American citizen expats the same as it's for residents of America?

Now, how many people actually use bitcoin without a trusted third party? Do you buy, sell, or trade on a centralized exchange? Trusted third party. Do you spend your bitcoin via a third party payment processor such as BitPay or Coinbase Commerce? Trusted third party. Do you use a closed source wallet such as Trust or Coinomi? Trusted third party. Does your open source wallet sync with third party servers? Trusted third party.

This legislation will essentially make it illegal just to own your own bitcoin, but most people already use bitcoin in a way which is very different to what Satoshi intended.

[SilverCryptoBullet]

It's true Bitcoin's being used in a different way to what Satoshi would've intended but we've still got a choice how to store cryptos.

After you create an innovation, it can be used in different ways and even in ways you did not imagine.

Gun powder, gun are examples of different ways to use an innovation. It can help human civilization or can bring painful experience to many people. A good innovation can be exploited by criminals but it is a different thing.

Criminals are not barriers to shut down human creativeness and innovations made by legendary people like Satoshi Nakamoto. There are always dark areas and wrong usages of any innovation.

[o_e_l_e_o]

Is the bill going to apply to American citizen expats the same as it's for residents of America?

It will apply to anyone who interacts with an American based exchange or other service, for now. But we are already seeing other countries start to adopt similar rules, where fully KYCed exchanges will only permit sending and receiving bitcoin from other fully KYCed exchanges. It is quite clear the majority of governments in the world want bitcoin to be entirely contained within a system they have complete power over, and can monitor and control as they desire.

[arabspaceship123]

It isn't a secret about the majority of govts wanting to take over control of bitcoin but it won't be easy. Are you saying decentralised exchanges which aren't located in America won't get affected by the bill so it's about Americans who want to exchange cryptos for fiat transfer to their bank accounts?

Is the bill going to apply to American citizen expats the same as it's for residents of America?

It will apply to anyone who interacts with an American based exchange or other service, for now. But we are already seeing other countries start to adopt similar rules, where fully KYCed exchanges will only permit sending and receiving bitcoin from other fully KYCed exchanges. It is quite clear the majority of governments in the world want bitcoin to be entirely contained within a system they have complete power over, and can monitor and control as they desire.

[o_e_l_e_o]

Are you saying decentralised exchanges which aren't located in America won't get affected by the bill so it's about Americans who want to exchange cryptos for fiat transfer to their bank accounts?

Not by this specific regulation, but as I said before many other countries are advancing similar pieces of legislation. Any exchange registered within a specific country could still be targeted if they refuse to comply. Hodlhodl for example is based in the UK, so would be easily targeted. AgoraDesk is based in the Seychelles, so is likely to be safer. The only exchanges completely immune to such regulations will be ones which are entirely decentralized, such as Bisq.

[Abiky]

It will apply to anyone who interacts with an American based exchange or other service, for now. But we are already seeing other countries start to adopt similar rules, where fully KYCed exchanges will only permit sending and receiving bitcoin from other fully KYCed exchanges. It is quite clear the majority of governments in the world want bitcoin to be entirely contained within a system they have complete power over, and can monitor and control as they desire.

Other countries usually copy America's model, so they will end up "banning" centralized mixers for good. What we will see in the future is a new wave of mixers that are fully KYC/AML compliant. It will look good in the eyes of the government, but it will defeat the whole purpose of "anonymizing" your BTC transactions. At least, we'll have non-custodial mixers to keep us by. I know they will be "illegal" for mainstream use, but people will resort to this option if they want to obtain true financial freedom and privacy. Everything will be done under the radar of the government.

With institutional investors getting in the game, it should only be a matter of time before regulations become stricter. All with the excuse of preventing money laundering and tax evasion. I've thought criminals used Fiat currencies for said purpose? You can see the govermment has other intentions besides "legalizing the industry". It's all about power/control. As long as BTC stays decentralized, there should be nothing to worry about.

[bct_ail]

What we will see in the future is a new wave of mixers that are fully KYC/AML compliant. It will look good in the eyes of the government, but it will defeat the whole purpose of "anonymizing" your BTC transactions.

Will probably be called banks.....

More and more banks are entering the Bitcoin business. In Germany at least, we can see that banks are slowly integrating Bitcoin into their business. Advising customers, buying Bitcoin and managing it (Wallet hosted from banks) . The customer does not have to worry about anything....

I think that breaking up the transaction history (mixing) will also be allowed in the future. But this work will be taken over by centralised institutions like banks.

[BlackHatCoiner]

It isn't a secret about the majority of govts wanting to take over control of bitcoin but it won't be easy.

And because of that, it's plain stupid for the Bitcoin ecosystem to voluntarily hand over that power to the government. Centralized exchanges, third party payment processors, even mixers buy the notion of taint nowadays.

The only exchanges completely immune to such regulations will be ones which are entirely decentralized, such as Bisq.

Let's hope it will remain that way. I can think of regulations which target the members of the DAO as well. That wouldn't make the network susceptible in the same sense, but it wouldn't be completely immune.

[Abiky]

Will probably be called banks.....

More and more banks are entering the Bitcoin business. In Germany at least, we can see that banks are slowly integrating Bitcoin into their business. Advising customers, buying Bitcoin and managing it (Wallet hosted from banks) . The customer does not have to worry about anything....

I think that breaking up the transaction history (mixing) will also be allowed in the future. But this work will be taken over by centralised institutions like banks.

Exactly. Banks will be the only entities allowed to "mix" or obfuscate transactions. The rest of the people will be forced to comply with KYC/AML in order to keep using Bitcoin. There's nothing we can do about it, especially when "Wall Street" is in the game. It has always been about money, power, and control. Eventually, no-KYC centralized mixers will be shut down for good. You will only be able to mix your Bitcoin through a non-custodial mixer.

Of course, it's likely doing such a thing will give you serious consequences in the long run (jail time or fines). After all , governments don't want people to enjoy true financial freedom and privacy. Being a "slave" to the current monetary system backed by banks is what governments like the most. As long as Bitcoin can be controlled via centralized exchanges, don't expect Fiat to go anywhere soon. Just my thoughts

[arabspaceship123]

Not by this specific regulation, but as I said before many other countries are advancing similar pieces of legislation. Any exchange registered within a specific country could still be targeted if they refuse to comply. Hodlhodl for example is based in the UK, so would be easily targeted. AgoraDesk is based in the Seychelles, so is likely to be safer. The only exchanges completely immune to such regulations will be ones which are entirely decentralized, such as Bisq.

If decentralised exchanges aren't going to be affected by American regulation it's something cryptos ppl have to start getting used to it now. I didn't complete my test on Bisq but it's got a positive rep so it's user number's going to rise.

It isn't a secret about the majority of govts wanting to take over control of bitcoin but it won't be easy.

And because of that, it's plain stupid for the Bitcoin ecosystem to voluntarily hand over that power to the government. Centralized exchanges, third party payment processors, even mixers buy the notion of taint nowadays.

Centralised exchanges are a central part of the bitcoin ecosystem so if they're surrendering their users to American regulation they'll see smaller profits. If they push them away they'll use decentralised exchanges setting a different way to trade so it's going to hit their profits.

[pixie85]

Centralised exchanges are a central part of the bitcoin ecosystem so if they're surrendering their users to American regulation they'll see smaller profits. If they push them away they'll use decentralised exchanges setting a different way to trade so it's going to hit their profits.

I think that these exchanges are going to risk losing a part of their clients if that's what it takes to be able to transact in the country.
What choice do they really have? Give up users or shut down. They can also fight the government in court but that could take time and be expensive. Only the biggest exchanges will try this.

Do you think the governments don't know it that people will run away from centralized exchanges if they start sharing information about every transaction with the IRS and other 3 letter agencies?
It's great news for them because less legit exchanges means less legitimacy for the crypto ecosystem and slower adoption. In other words less competition for CBDC.

[gunhell16]

Yes, it is true that Bitcoin is not money laundering, but exploitative people only use Bitcoin from fiat to Bitcoin, and then they go through Bitcoin mixing to hide their true identity. Because the Bitcoin mixer hides the address, the person who holds it cannot be identified.

It seems that the money seems to be passed through the black market; the system seems to be like that. So it is very true that Bitcoin is a money launderer; it is indeed a digital currency, and if it is true that it is a money launderer, it will not last for sure for 14 years in this industry.

[arabspaceship123]

I don't know what would happen if they wanted to register their exchanges in Seychelles but if they aren't falling under American regulation there shouldn't be a claim on their users trading data. If the biggest exchanges challenge the govt in court it's going to help the smallest exchanges stay in business.

I think that these exchanges are going to risk losing a part of their clients if that's what it takes to be able to transact in the country.
What choice do they really have? Give up users or shut down. They can also fight the government in court but that could take time and be expensive. Only the biggest exchanges will try this.

[Abiky]

I think that these exchanges are going to risk losing a part of their clients if that's what it takes to be able to transact in the country.
What choice do they really have? Give up users or shut down. They can also fight the government in court but that could take time and be expensive. Only the biggest exchanges will try this.

Do you think the governments don't know it that people will run away from centralized exchanges if they start sharing information about every transaction with the IRS and other 3 letter agencies?
It's great news for them because less legit exchanges means less legitimacy for the crypto ecosystem and slower adoption. In other words less competition for CBDC.

Governments will do what's in their best interests. Mixers and truly-decentralized cryptocurrencies pose a threat to banks' very existence. You think governments will let this pass by? They will do everything in their power to try to reduce crypto's dominance in the mainstream economy. That's by either regulating it or making it "illegal".

I see no future for Bitcoin mixers, unless they stick to being "non-custodial" (which means decentralized). Tornado.Cash was a non-custodial mixer, but that didn't stop the US government from sanctioning it (although it was still possible to use it by interfacing with smart contracts directly). This will be a never-ending battle between crypto and governments + banks. With centralized exchanges getting ahold of the crypto market, we could say governments have some sort of control over crypto. They will have trouble regulating DEXs, though. Who knows what the future of crypto will be?

[franky1]

And because of that, it's plain stupid for the Bitcoin ecosystem to voluntarily hand over that power to the government. Centralized exchanges, third party payment processors, even mixers buy the notion of taint nowadays.

taint is a term even early adopter/dev bitcoiners use for the UTXO path back to its proven creation (coin-reward).. its a real thing.
even back then discussions were said about "blacklisting" "colouring" "tracing" coins

its actually part of the audibility of bitcoins open ledger, that each bitcoin has a origin/spending path

taint existed before mixer/obfuscation services existed
taint existed before any chain analysis company started operating
taint existed before any government cared about bitcoin

yep "taint" has been a buzzword in bitcoin for 12+years.. is not something the government invented

The only exchanges completely immune to such regulations will be ones which are entirely decentralized, such as Bisq.

Let's hope it will remain that way. I can think of regulations which target the members of the DAO as well. That wouldn't make the network susceptible in the same sense, but it wouldn't be completely immune.

however if dex/de-fi traders use bankwires for fiat trades, they are not immune.