Why are bitcoin mixers often accused of laundering money?

[komisariatku]

One of the advantages of bitcoin is anonymity, where the owner of a bitcoin address cannot be known by anyone because it is not connected to a personal identity. But another advantage of bitcoin is transparency, so that transaction a bitcoin address will always be publicly recorded and can be accessed by anyone. This is a problem, especially for holders of lots of bitcoins in wallets, they will worry about their identities and transactions being tracked.

Maybe this is where the beginning of the bitcoin mixer idea is needed. Bitcoin mixer will make transactions untraceable and as a double safeguard for the anonymity of bitcoin. But in practice, bitcoin mixers are misused by certain people or groups to hide money generated from crime. Maybe we often call it money laundering

I think this is a problem, and cases of money laundering using bitcoin make bitcoin's image even worse. Even though in reality there is also a lot of money laundering that is carried out through bank institutions by falsifying bank account identities.

In your opinion, how to prevent the use of bitcoin as a means of money laundering? While we may not recommend going to KYC, it is useless and the anonymity of bitcoins will be lost.

To this day, many bitcoin mixers have been caught in money laundering cases, such as Chipmixer, Tornado Cash, Bitcoin Fog, and others. Apart from that, even though the bitcoin mixer users are at fault, those who make the mistake of using a mixer as a way of covering up their crimes, why is the Bitcoin mixer platform also considered guilty? Or is there a conspiracy between them?

Reference : finance.yahoo.com

[1714596171]

1714596171

[1714596171]

1714596171

[Poker Player]

In your opinion, how to prevent the use of bitcoin as a means of money laundering? While we may not recommend going to KYC, it is useless and the anonymity of bitcoins will be lost.

In my opinion, it should not be prevented, as it implies a loss of privacy for those who make legitimate use of it.

The powers that be are not of the same opinion, however, and just as we are in a global trend of reducing the use of cash while implementing CBDCs for total control, they want the use of Bitcoin with privacy reduced as much as possible with the excuse of AML policies.

[mk4]

In your opinion, how to prevent the use of bitcoin as a means of money laundering? While we may not recommend going to KYC, it is useless and the anonymity of bitcoins will be lost.

You simply cant. A neutral tool will always be used both for good purposes and for bad purposes. Just like how you can't 100% force people to not use knives to stab people, and how you can't 100% force people to not use the internet to scam people.

[BlackBoss_]

To this day, many bitcoin mixers have been caught in money laundering cases, such as Chipmixer, Tornado Cash, Bitcoin Fog, and others. Apart from that, even though the bitcoin mixer users are at fault, those who make the mistake of using a mixer as a way of covering up their crimes, why is the Bitcoin mixer platform also considered guilty? Or is there a conspiracy between them?

Fiat currencies, cash are used to launder money for many decades, not recently. Bitcoin and cryptocurrencies have been creating recent years since 2009 and using for money laundering some years after 2009 when they became popular enough and adopted widely enough.

A current treatment against Bitcoin and cryptocurrency mixers is because aggressive policies of governments against the Blockchain and cryptocurrency industry in general. The war against mixers is only part of that war against this new industry.

Crypto Mixers and AML Compliance.

In July, we found that almost 10% of all cryptocurrencies held by illicit entities have been laundered through a mixer in 2022.

[joniboini]

Apart from that, even though the bitcoin mixer users are at fault, those who make the mistake of using a mixer as a way of covering up their crimes, why is the Bitcoin mixer platform also considered guilty? Or is there a conspiracy between them?

If I remember correctly, one of the reasons why Chipmixer was charged as guilty was because there was a chat log from one of the agents asking whether they could help launder their money, and the operator said yes. Basically, investigators use similar reasoning when they charge a mixer of money laundering. That being said, investigators can also use other reasons such as negligence in allowing suspicious transactions to be processed and so on.

In your opinion, how to prevent the use of bitcoin as a means of money laundering? While we may not recommend going to KYC, it is useless and the anonymity of bitcoins will be lost.

Maybe we should focus on improving people's moral compass instead. Regardless of what you do, if people want to abuse something they can definitely do it.

[Despairo]

Bitcoin mixer is accused for money laundering usage because the government don't like Bitcoin in the first place, so they will try to exaggerate any information that they don't like. It's similar like government accused Bitcoin mining use a lot energy, Bitcoin is used for ponzi scheme, Bitcoin isn't safe as many investors lost their coins on a centralized exchange etc.

However usage of Bitcoin mixer isn't completely make it's anonymous, it's not as simple as that.

[MusaMohamed]

Bitcoin mixer is accused for money laundering usage because the government don't like Bitcoin in the first place, so they will try to exaggerate any information that they don't like. It's similar like government accused Bitcoin mining use a lot energy, Bitcoin is used for ponzi scheme, Bitcoin isn't safe as many investors lost their coins on a centralized exchange etc.

Mixers are created for people who want to have anonymous transactions and everyone have such need can use mixers. Criminals use mixers for money laundering but people who don't launder money can use mixers too.

The accusation that all money in and out mixers are for money laundering is not accurate. It is an inaccurate accusation which is intentionally governed by governments because they want to seize all mixers.

However usage of Bitcoin mixer isn't completely make it's anonymous, it's not as simple as that.

It depends on quality of a mixer service and how users use inputs for mixing and outputs from mixing process.

[Sexylizzy2813]

In your opinion, how to prevent the use of bitcoin as a means of money laundering? While we may not recommend going to KYC, it is useless and the anonymity of bitcoins will be lost.

Firstly I have no idea why the accusations are coming up now, I feel the government on the other hand will do anything possible for people to have negative impression about Bitcoin and the won't stop till they get what they have being targeting which is to never let Bitcoin to be in the first place.
On the other hand, rigorous identity verification and cryptocurrency KYC processes can discourage launderers from placing crypto on their platform, and also real time transaction monitoring can help ones business to identify transaction that create compliance risk.

[mindrust]

It is because people can launder money using bitcoin mixers. It is not rocket science. If you somehow got coins that have bad history, you can use a mixer and get different coins. The problem here is, you don’t know whose coins you are getting so the coins you’ll get might have a worse history then what you had in the first place. I wouldn’t use any crypto mixers personally for that reason alone.

[komisariatku]

You simply cant. A neutral tool will always be used both for good purposes and for bad purposes. Just like how you can't 100% force people to not use knives to stab people, and how you can't 100% force people to not use the internet to scam people.

Yes you're right. We cannot force someone to always use a tool according to its original use. And it seems that in every innovation there is a shadow of evil. Additionally, the concept of bitcoin anonymity makes crimes easy to commit, and mixers ostensibly make crimes even more untraceable. While I like the concept of the mixer, it makes what we have safer and almost traceless

If I remember correctly, one of the reasons why Chipmixer was charged as guilty was because there was a chat log from one of the agents asking whether they could help launder their money, and the operator said yes. Basically, investigators use similar reasoning when they charge a mixer of money laundering. That being said, investigators can also use other reasons such as negligence in allowing suspicious transactions to be processed and so on.

If the financial authorities do not find evidence of chat logs, can chipmixer be free from prosecution for being involved in a money laundering case?

On the other hand, rigorous identity verification and cryptocurrency KYC processes can discourage launderers from placing crypto on their platform, and also real time transaction monitoring can help ones business to identify transaction that create compliance risk.

But most of the bitcoin community doesn't like KYC, it takes away the spirit of bitcoin anonymity

[Kakmakr]

Yes, this is a problem.... but not a problem that only exist with Bitcoin use. Many people with an agenda, will focus on Mixers and Bitcoin Pseudo-anonymity, knowing that the most money laundering are done with cash. (Fiat currencies)

This is an instance where you can say... "If you want to hit somebody, then you will find a stick" We know Bitcoin haters and Bitcoin's competition will blow up the smallest thing to discredit Bitcoin and they will ignore the flaws in their own behavior or technology. 

[Hyphen(-)]

Maybe this is where the beginning of the bitcoin mixer idea is needed. Bitcoin mixer will make transactions untraceable and as a double safeguard for the anonymity of bitcoin. But in practice, bitcoin mixers are misused by certain people or groups to hide money generated from crime. Maybe we often call it money laundering

The purpose of Bitcoin mixers is to provide anonymity, which is one of Bitcoin's incentives although some people use it to conceal their identity if they steal Bitcoin in order to avoid being tracked.

To this day, many bitcoin mixers have been caught in money laundering cases, such as Chipmixer, Tornado Cash, Bitcoin Fog, and others. Apart from that, even though the bitcoin mixer users are at fault, those who make the mistake of using a mixer as a way of covering up their crimes, why is the Bitcoin mixer platform also considered guilty? Or is there a conspiracy between them?

Not all mixers are guilty, but certain mixers are aware that they are participating in criminal activities, thus if some cases arise, they will be involved because they may have previously been involved in such a criminal case.

Nonetheless, Bitcoin Mixers are excellent for protecting our anonymity, even if different people use them for many different reasons.

[Latviand]

To answer the question in the title, mixers are accused of money laundering because they're used by shady entities to launder their money, I think that's the truth, people that have shady business sees what mixers do so they try to take advantage of it, anything to be one step ahead of the law is going to be helpful to these criminals. Mixers work by mixing or mashing up coins in a private pool then is sent to the receivers, it's compared often to money laundering but that doesn't mean that those who use it doesn't mean that they are committing a crime, some just want to increase their privacy.

[Dr.Osh]

I don't think we can handle it. the goal of mixers is to make these transactions anonymous and untraceable. Because of this, very many people think that this is often used as a tool to launder the money they get from illegal proceeds. However, I think it's hard to stop. Even as a legitimate system there will be people who use it for fraud. for example the use of KYC. maybe people think that it is a way out, but some irresponsible people are willing to buy someone's data to do KYC. it's like asking someone to set up a bank account, and pay for it. So, in every system, there will definitely be loopholes to make something illegal.

[Outhue]

Bitcoin mixer is accused for money laundering usage because the government don't like Bitcoin in the first place, so they will try to exaggerate any information that they don't like. It's similar like government accused Bitcoin mining use a lot energy, Bitcoin is used for ponzi scheme, Bitcoin isn't safe as many investors lost their coins on a centralized exchange etc.

However usage of Bitcoin mixer isn't completely make it's anonymous, it's not as simple as that.

Not entirely true, Bitcoin is friendly to no nation because it's decentralized and in a world where the government rules Bicoin is automatically a threat, but thank God that Nakamoto doesn't made Bitcoin a privacy digital currency, this could give them the reason to never unlift the bans on Bitcoin.

As for Mixers, I don't buy your point of exaggeration from the government, if any one wants to embezzle dirty money Mixers can get the job done easily, if anyone is trying to fund some terrorist groups Mixers can make this easy too, so why are you saying that exaggerated the whole thing?

Are we going to stick with the fact that not all Mixer users are criminals? Well that's right but at the same time how are we sure that crime organizations aren't using Mixers too? If you are the leader of a country and you want peace for your country, isn't Mixers something to watch out for? The ability of Mixers are scary in a part too.

[Sim_card]

In your opinion, how to prevent the use of bitcoin as a means of money laundering? While we may not recommend going to KYC, it is useless and the anonymity of bitcoins will be lost.

We have all kind of people in our society and in the world at large. The good,bad and ugly stays together and partake in various activities or events together. They work in the same places and have fun in the same place. What I mean is that you can't read human mind to know who is good or bad. Likewise we all use the same currency and the sun and rain shines and falls on everyone. This is how we also have all kind of people using bitcoin because it is open to everyone for their own different purpose,some bitcoin users sees bitcoin mixer as an opportunity for them to launder money gotten from illegal activities because it keeps their transactions private and that was their reason for adopting bitcoin. Even our fiat currency is also use for money laundering,there as long as we are talking about money,there must be money laundering both goes hand in hand. Nothing can anyone do to stop the use of bitcoin for money laundering,only if bitcoin dies when the government of every country ban bitcoin.

[LoyceV]

how to prevent the use of bitcoin as a means of money laundering?

That's like asking how to prevent knives and guns from being used for crimes, or cars being used as getaway vehicles. You can't prevent everything. Just like you can't prevent money laundering happening with cash money.

I think this is a problem, and cases of money laundering using bitcoin make bitcoin's image even worse.

You'll have to ask yourself who has an interest in hurting Bitcoin's image.

You simply cant. A neutral tool will always be used both for good purposes and for bad purposes. Just like how you can't 100% force people to not use knives to stab people, and how you can't 100% force people to not use the internet to scam people.

GMTA
I think about every product on the planet can be used for good and evil. All I can do is try not to be evil myself.

[franky1]

how to prevent the use of bitcoin as a means of money laundering?

That's like asking how to prevent knives and guns from being used for crimes,  
... You can't prevent everything. Just like you can't prevent money laundering happening with cash money.

but when you know that using a knife/gun generally is more risky than using a spoon/waterbottle. laws, common sense, policy, directions and instructions appear about knives/guns, but spoons/waterbottle dont apply to the same rules,instructions to reduce the risk of bad use of such things like knives/guns

and so when mixers are a defined risk of money laundering. then rules, policy regulation instruction and directions appear about mixers

by the way money has NEVER had any "privacy". history of money has always been audited and subject to things like tax and declarations.. for hundreds of years.
financial privacy was a new feature promoted when bitcoin was invented. but that was back when bitcoin was defined as private property(2009-2013) however when defined as currency(2014+) it then fell into the remit of financial laws

the most foolish thing is that now there is regulations that define mixers as a laundering risk, and crypto as currency, there has become sets of rules to monitor users.. yet people still use services defined as mixers.. trick is to use something else not defined as a mixer. be clever. find something else not trying to be in the 'mixer' definition.. but solves your same privacy concern

..
its why fiat users dont use old laundering techniques that have become regulated. but keep changing the methods of shuffling money around, methods outside the traditional definitions, but give the same end result of their desired utility

[user210822]

Money laundering couldn't be prevented in fiat even. Forget about crypto! In every jail no knives are allowed nevertheless every other time someone gets stubbed there to death. I see that mixers are used by people and they are way too different. There's no warranty that in the end, when Bitcoins start to be used on regular payment (yes I know they serve as digital assets but wait for couple of years!) dirty crypto will be so mixed with clean one that no one can really say the difference.

[BALIK]

In your opinion, how to prevent the use of bitcoin as a means of money laundering?

Using bitcoins for money laundering or illegal use is both human behaviors, therefore, we should not attempt to repair the mixer as the mixer itself is not guilty. If we want to punish someone it is the person using bitcoins for illegal actions, not bitcoins or mixers. Just like they use Fiat for their illegal activities, it's not Fiat's fault. I don't see a problem with mixers, you shouldn't let the government lead you into a misconception they are deliberately creating against bitcoin.

[rat03gopoh]

To this day, many bitcoin mixers have been caught in money laundering cases, such as Chipmixer, Tornado Cash, Bitcoin Fog, and others. Apart from that, even though the bitcoin mixer users are at fault, those who make the mistake of using a mixer as a way of covering up their crimes, why is the Bitcoin mixer platform also considered guilty? Or is there a conspiracy between them?

Because a mixer is an entity that can be held liable for lawsuits, has large reserves of funds which is quite exciting to be confiscated, the rest doesn't have a license (which is impossible). However, most laws act subjectively.
Of the several conventional means of laundering money such as involving gambling, art trading, awards, etc. which used to use bank transfers as a medium for transferring large sums of money, no bank has been stopped because regulations allow it to operate.

[Z390]

Don't even try to rid off the fact that bad actors found mixers more astonishing to their evil plans, it's for real, mixers are good for good people and also very useful for bad people, if I have to judge, I believe mixers are more attractive to bad actors than the good men and women out there, correct me if I am wrong but the government wouldn't definitely care about the good side, every useful tools in the world can be used by bad actors but mixers are on another whole level because of what they can do.

[Bako97]

In your opinion, how to prevent the use of bitcoin as a means of money laundering? While we may not recommend going to KYC, it is useless and the anonymity of bitcoins will be lost.

To this day, many bitcoin mixers have been caught in money laundering cases, such as Chipmixer, Tornado Cash, Bitcoin Fog, and others. Apart from that, even though the bitcoin mixer users are at fault, those who make the mistake of using a mixer as a way of covering up their crimes, why is the Bitcoin mixer platform also considered guilty? Or is there a conspiracy between them?
The ability to hide bitcoin transaction makes mixers a clear open ground for money laundering, this attracts tax dodgers and criminals willing to hide illegal activities, some pioneers of mixers has been arrested for money laundering, and those acts gave the mixers a bad reputation, therefore, rendering mixers not 100% legitimate at obscuring financial transactions.

[Bananington]

In your opinion, how to prevent the use of bitcoin mixers as a means of money laundering?

There is no way to really control how people use something, a technology that is meant for good can also be utilized for bad. Bitcoin mixers if they really want to prevent their services from being used by these criminals, they will need to be strict with monitoring and record keeping, and of course KYC no matter how much we do not want to mention it must be introduced and strictly obeyed. It will discourage many criminals from using these mixers and make them look for other ways to lauder their crypto. On the other side of things, their customers and people who use their service will reduce because a fraction of these customers are criminals. So mixers who do not follow these, have no KYC, and allow everyone mix their cryptocurrency will always still be found guilty by the authorities if there is a money laundering case and they are involved.

[D ltr]

In your opinion, how to prevent the use of bitcoin as a means of money laundering?

there is no way that can be applied in this matter actually, only from yourself and a clean heart not wanting to do things that are detrimental to other people for the sake of worldly satisfaction'
regulations and punishments do not deter people who are greedy for money, but if applied the death penalty can make people think twice about doing so.

[TribalBob]

In your opinion, how to prevent the use of bitcoin as a means of money laundering? While we may not recommend going to KYC, it is useless and the anonymity of bitcoins will be lost.

if it's true that there is a conspiracy between users and mixers, a very bad thing for a platform that has been formed for a long time.
the effect of greed / human morals can make a company worse when not everyone does this, this can make the anonymity of the owner disappear for btc users, and apply to KYC in every transaction in large numbers

[m2017]

I suspect that BTC-mixers are often accused of money laundering with the sole purpose of demonizing bitcoin-mixers to discourage people from using it. Big Brother doesn't like the idea that bitcoin and mixers can hide all tracks (money transactions). He wants to know everything about you. Therefore, they come up with such accusations of money laundering in order to ban. Perhaps some of the users of mixers use mixers for these purposes, but I can assume that their share is completely insignificant.

The knife is also used in many crimes, but for some reason it is not forbidden to use in the kitchen. In the same way, any mixer is just a tool, which does not mean that everyone who uses it is intruders and criminals.

[Smack That Ace]

In your opinion, how to prevent the use of bitcoin as a means of money laundering?

there is no way that can be applied in this matter actually, only from yourself and a clean heart not wanting to do things that are detrimental to other people for the sake of worldly satisfaction'
regulations and punishments do not deter people who are greedy for money, but if applied the death penalty can make people think twice about doing so.

You have a point there, this is human behavior stemming from greed, human cruelty, and each person's personality how will there be a general formula to prevent that? It is unethical to use bitcoins and mixers for malicious purposes, breaking the law is man-made, and the government should have a law or proper punishment for criminals, not trying to modify bitcoins or mixers. If the government wants to modify bitcoin, then they should first find a way to modify fiat currency as it is the most used by criminals by far.

[Woodie]

The fact that mixers never ask their customers to under go KYC or ask them about their sources of funds makes it easy to actually launder money for them, no questions ask..

But as the title says, "bitcoin mixers often accused of laundering money" aren't these kind of the mediators of this and people on the other side should be the ones pinned with money laundering label

Btw while we are out giving mixers a bad name, why dont these guys talk about the privacy side of mixers used to protect bitcoiners identities and the alike ..especially  knowing  that privacy isn't  easy to keep.

[Stable090]

Maybe this is where the beginning of the bitcoin mixer idea is needed. Bitcoin mixer will make transactions untraceable and as a double safeguard for the anonymity of bitcoin. But in practice, bitcoin mixers are misused by certain people or groups to hide money generated from crime. Maybe we often call it money laundering

Everything has both advantage and disadvantage, bitcoin mixer is used to mix bitcoin so that it will be untraceable  and it will increase privacy, bitcoin mixer can be used by anyone so you can’t stop anybody  from using it, so their are some people that will be using it for illegal thing and some will be using it for legitimate things but that those mean using bitcoin or mixer is bad.

If you are using a bank and you have connection with your bank manger, if you are trying to deposit a huge amount of money, their is a way the bank manger will do that for you and nobody will question you where you get the money from, so why   Is the government not against bank? So banks is also used for money laundering, most money stolen are saved in the bank and they are not exposed.

I think this is a problem, and cases of money laundering using bitcoin make bitcoin's image even worse. Even though in reality there is also a lot of money laundering that is carried out through bank institutions by falsifying bank account identities.

Let me ask you a question, is fiat currency not used for money laundering? I get annoyed when I see people complaining about bitcoin because it is used for money laundering, yes I know bitcoin is used for money laundering, but fiat currency is also used for it money laundering, up-till now higher percentage of illegal transactions happening currently is still don with fiat currency. So why is it that people are not seeing the bad aspect of fiat currency.

In your opinion, how to prevent the use of bitcoin as a means of money laundering? While we may not recommend going to KYC, it is useless and the anonymity of bitcoins will be lost.

You can not prevent it, bitcoin is a currency and it should be used for what anybody want.

[Flexystar]

Why it is always one bad person and 99 good person ratio that I never understood in the world we live in. What about my privacy if I wanted to be anonymous? I am the person who would donate some money at religious place or may be on the street where I feel like it’s needed. What if that money is earned from bitcoin and I want to maintain my anonymous nature until the end? I would definitely use mixers and get freshly minted bitcoins. My intentions are whole heartedly good but does the use of mixers make me money launderer?  Then that must be changed right away. 

[coolcoinz]

It's all arbitrary... I always ask people who say that what is money, because is bitcoin money, or just another medium of exchange unrecognized by the governments. There was a time most countries treated bitcoin like a collector's item, not money. They would not protect investors in any way and also not demand anything in return. So, is obfuscating a source of the Internet data money laundering?

I'll give you an example. If you wanted world of warcraft gold and were selling nude photos of your sister in exchange for it, would that be a financial transaction? If you then mixed that through various game accounts to make it harder to find, would that be money laundering? Years go when I had bitcoin and wanted to buy something for it nobody cared and the government officials were laughing at people like me who live in a dream world. Now suddenly they all want to know how much I have and from what sources, so I say fuck them.

[kryptqnick]

I know that some people use mixers for legitimate reasons. For example, I recall that Buterin once mentioned using a mixer to send money to support the Ukrainian cause, and I understand why some people might feel the need of maintaining anonymity for such things. But the way mixers work makes them very useful for money laundering, and kids of similar to how money laundering is done in general. I've never used crypto mixers, and I'm not sure whether I consider them a neutral technology that should not be banned or not.

[Cookdata]

To this day, many bitcoin mixers have been caught in money laundering cases, such as Chipmixer, Tornado Cash, Bitcoin Fog, and others. Apart from that, even though the bitcoin mixer users are at fault, those who make the mistake of using a mixer as a way of covering up their crimes, why is the Bitcoin mixer platform also considered guilty? Or is there a conspiracy between them?

KYC is a government policy that doesn't exist on bitcoin protocol. On the Bitcoin protocol level, Bitcoin invalidates censorship, its resistant to autonomy from a single person, and protects your privacy as a pseudonym person, but where the problem lies is that for anything that has a merit, it has a demerit, for any solution that is solved, a problem is always created from that channel and that is exactly what Bitcoin has done.

Bitcoin is a good censorship-resistant and nobody there argues that but the ability to stand on it own without a middleman is exploited by some bad actors, anyone can use Bitcoin for anything and the government cannot trace them and that is why they implement KYC but because something that uses less than 1% of bad actors doesn't mean everyone has to do the KYC, there are bad actors everywhere including in the Fiat system.

Mixers are strictly business individuals, they are not like centralized exchanges, they also follow the protocol level which is pure privacy protection, and no way they can implement KYC in that protocol, we have to live by it or let those who wished to use the service continue to use, there are bad actors even in AML policy platforms and they don't get shut down.

[Wimex]

It is supposed that one of the main characteristics of the use of bitcoin is its privacy, imagine that a person who handles large amounts of bitcoin ceases to be anonymous, this would attract many consequences for said person, and I am not saying that it only harms him legally but that he would be in the crosshairs of individuals with bad intentions…..or they have not noticed that when someone has large amounts of money, they are persecuted and even kidnapped in order to take what they have…..this asset makes it possible to avoid these events by not being detectable.

So no, I don't think there is the possibility of preventing it from being classified as money laundering, since that would imply violating privacy, and that should not be allowed, in addition, this way an alternative is generated for these cases, the people who do They carry out this activity with the intention of laundering money, they will find a way out to continue doing it, as it has always happened, this is not something new

[darkangel11]

Caught in laundering cases? Have you ever considered that they're a victim of government attack on cryptocurrencies and anonymity in general?
Mixers have been working for many years and suddenly there's a pressure from governments, at the same time when the same governments get directions from the World Economic Forum to introduce CBDCs as soon as possible.

Honestly, I don't care if some politicians think there should be no privacy and mixers are operating unlawfully. We'll have to agree to disagree.

[_BlackStar]

In your opinion, how to prevent the use of bitcoin as a means of money laundering? While we may not recommend going to KYC, it is useless and the anonymity of bitcoins will be lost.

Exchanges and any centralized services have prevented this by adopting KYC – but cannot be completely free from money laundering cases. Bitcoin and all other currencies can be abused - even if certain platforms prevent it, it will happen to other platforms one way or another. Prevent this misuse case is also almost as if you'd expect robbers must be prevented from using weapons - that's highly unlikely.

[Faisal2202]

To this day, many bitcoin mixers have been caught in money laundering cases, such as Chipmixer, Tornado Cash, Bitcoin Fog, and others. Apart from that, even though the bitcoin mixer users are at fault, those who make the mistake of using a mixer as a way of covering up their crimes, why is the Bitcoin mixer platform also considered guilty? Or is there a conspiracy between them?

Totally agreed with your point because when the chip mixer was seized then I was satisfied with what happens but if I give it some more thought then what was the crime of those innocence users who were using it for anonymity purposes only.

Like after that incident I read a topic started by some user, where he shared that his money got stuck after the seizure of CM project. There would be many others fall prey to this halt of the project. But what can be done.

In your opinion, how to prevent the use of bitcoin as a means of money laundering? While we may not recommend going to KYC, it is useless and the anonymity of bitcoins will be lost.

You are right, a while ago I was reading an article about the same issue you referred here, it will take me some time to find the link but they were suggesting ZK-proof mechanism instead of KYC which will hide the identity of the user but help them to trace back if needed and I think only the owner could do that but after tornado was made developers has made it open source for everyone. (source)

maybe I got the idea wrong here so I suggest to check the source also as I said I read it while ago.

Coming to the point, to shift black money from one account to another money laundering system is used which will turn the black money into white. So, as you mentioned due to 100% transparency of transactions authorities and other freelancer like whale tracker etc can track those wallets 24 hours. Which has become so easy and it also has become easy to spread bad words about crypto among newbies on the basis of those account which are not publically available if they were related to banking sectors.

Because i have seen no files and documents shared by Authorities where they catched a laundering case like they share when it happens in crypto.

[AmoreJaz]

It is supposed that one of the main characteristics of the use of bitcoin is its privacy, imagine that a person who handles large amounts of bitcoin ceases to be anonymous, this would attract many consequences for said person, and I am not saying that it only harms him legally but that he would be in the crosshairs of individuals with bad intentions…..or they have not noticed that when someone has large amounts of money, they are persecuted and even kidnapped in order to take what they have…..this asset makes it possible to avoid these events by not being detectable.

So no, I don't think there is the possibility of preventing it from being classified as money laundering, since that would imply violating privacy, and that should not be allowed, in addition, this way an alternative is generated for these cases, the people who do They carry out this activity with the intention of laundering money, they will find a way out to continue doing it, as it has always happened, this is not something new

that is true, if not with crypto market, they will always find a way how to launder their money. remember, money laundering has long been existing even without the existence of btc. so it won't change just because btc market is now part of it. people will always launder so long they need it. and now, they just added one route to this activity, which is employing the use of crypto market.

[Cryptomultiplier]

Caught in laundering cases? Have you ever considered that they're a victim of government attack on cryptocurrencies and anonymity in general?
Mixers have been working for many years and suddenly there's a pressure from governments, at the same time when the same governments get directions from the World Economic Forum to introduce CBDCs as soon as possible.

Honestly, I don't care if some politicians think there should be no privacy and mixers are operating unlawfully. We'll have to agree to disagree.

There's always going to be this argument; DEX is DEX. If any kind of regulation is imposed, it no longer becomes DEX.
What good is anonymity if it is monitored or regulated?
Even the government officials mostly used these untraceable means to Psiphon cash and once they begin to contest for positions, they bring up these their schemes as if they are up against it fully.

CBDC adoption isn't a sure guarantee against laundering or a solution to the war on terrorism. It just puts every one within safe boundaries that can be easily manipulated against them. After all, government workers aren't saints.
Why should i be open about my wealth, when it could be surely exploited, mostly if I want to contest a government position.

BTC Mixers are often accused of laundering most times because of firstly anonymity and untraceable nature of transactions. Also, because of the region and ease at which it is used to perpetuate political crimes.

[Becassine]

All the banks have laundered money from illicit activities and still do. Sometimes they get a slap on the wrist. "too big too fail" ... How many politicians have received cash bribes?

When the "ruling elites" have figured out how bitcoin works and can launder the embezzled money, then the mixers will be in the clear....

The irony of abolishing cash and mixers when the worst fraudsters are certainly not ordinary citizens!

https://www.youtube.com/watch?v=bGr2JAOSgew

[FinneysTrueVision]

Bitcoin is not truly anonymous, it's pseudo-anonymous, that is why people use mixers to preserve their privacy. You can not stop criminals from using whatever tools are available to them. Even KYC exchanges can be used to launder money. Anti-money laundering laws aren't actually effective at stopping criminal activity. It costs more to comply with AML laws than the amount of funds confiscated from illicit activity. These costs means billions of dollars in profit for the AML compliance industry so there is an enormous financial motivation to keep these ineffective policies in place.

[blue Snow]

To this day, many bitcoin mixers have been caught in money laundering cases, such as Chipmixer, Tornado Cash, Bitcoin Fog, and others. Apart from that, even though the bitcoin mixer users are at fault, those who make the mistake of using a mixer as a way of covering up their crimes, why is the Bitcoin mixer platform also considered guilty? Or is there a conspiracy between them?

I don't see any conspiracy behind this, because nature of the criminals. It also depends on what people think. I even think if a mixer is good for my privacy. If using a mixer, I can hide my wealth and no one knows the amount of my bitcoin. my life is calm lurking from the hacker, especially the government, who always ask for data on the wealth of its citizens. Who knows when collapses they deprived our bitcoin for build the economic.

[BlackBoss_]

I don't see any conspiracy behind this, because nature of the criminals. It also depends on what people think. I even think if a mixer is good for my privacy. If using a mixer, I can hide my wealth and no one knows the amount of my bitcoin. my life is calm lurking from the hacker, especially the government, who always ask for data on the wealth of its citizens. Who knows when collapses they deprived our bitcoin for build the economic.

By laws, current laws, mixers are not considered is illegal in all countries.

Crypto Mixers and AML Compliance

Are crypto mixers legal?

Despite their use by criminals, crypto mixers are not explicitly illegal in most jurisdictions. Whether they are compliant, however, is a different question.

In the United States, the Financial Crimes Enforcement Network (FinCEN) has confirmed that individuals and centralized businesses offering custodial mixing services must register as money transmitters under the Bank Secrecy Act (BSA), and have three key obligations:

• register with FinCEN,
• maintain an anti-money laundering and know-your-customer compliance program, and
• meet all applicable reporting and record-keeping requirements.

We aren’t aware of any custodial mixers currently following these rules. And given that privacy preservation is the main reason that many users interact with crypto mixers, it seems unlikely that one could implement these procedures and still retain their users.

Sanctions also matter for mixers. All mixers that want to do business in the U.S. must take measures to ensure they don’t do business with sanctioned entities. And, as we’ll cover below, even non-custodial smart contract-based mixers not covered by the BSA can be subject to sanctions designations, provided of course they aren’t based in the U.S.

We see more sanctions, seizures, arrests related to cryptocurrency mixers and their developers. Regulations against cryptocurrency mixers will be upgraded and stricter when more laundering activities use cryptocurrency mixers and with bigger flows in value.

As of now, it is not true to say cryptocurrency mixers are illegal globally.

[Gallar]

In your opinion, how to prevent the use of bitcoin as a means of money laundering? While we may not recommend going to KYC, it is useless and the anonymity of bitcoins will be lost.

Actually, if asked about something like this, it's a little confusing. Because until now I have never heard of ways to prevent bitcoin from being misused. Because maybe it's not all about the bitcoins, but it's all about the people who hold the bitcoins. Because even if it creates a method or rule so that the bitcoin realm is like a mixing platform, it doesn't commit crimes or fraud. But his name is also a greedy human being, of course he will find a way too so he can trick all of these rules. So stopping all of that is quite difficult.
Because let alone bitcoin, even fiat money has been around for a long time in the world. Until now, it is still not completely able to overcome people who misuse money, but there are still people who do misuse it.

Moreover, bitcoin, with its very high level of anonymity, with this, it is very easy to be used as an opportunity by greedy people. So in essence it is not bitcoin or the mixing platform that should be tightened or changed. But more precisely, you have to be able to build awareness about bitcoin, which must be free from crime. Even though it won't be easy, over time this ideology will definitely grow in the minds of everyone who is involved in the bitcoin world.

[Spinflight]

It is because people can launder money using bitcoin mixers. It is not rocket science. If you somehow got coins that have bad history, you can use a mixer and get different coins. The problem here is, you don’t know whose coins you are getting so the coins you’ll get might have a worse history then what you had in the first place. I wouldn’t use any crypto mixers personally for that reason alone.

 There are other privacy focussed options on the blockchain which won't result in you getting tainted coins back...

You are right, a while ago I was reading an article about the same issue you referred here, it will take me some time to find the link but they were suggesting ZK-proof mechanism instead of KYC which will hide the identity of the user but help them to trace back if needed and I think only the owner could do that but after tornado was made developers has made it open source for everyone. (source)
 

 It's already been done, indeed it's been live for a couple of years. Basically a webapp wallet which connects to smart contracts on the blockchain which keep individual user's funds separate via zero knowledge proofs.

 There's plenty of completely legitimate uses for a privacy system, rather than a mere mixer. For instance paying a lawyer; paying salaries to your workforce anonymously such that individual amounts are not disclosed; changing accounts after your original was doxed; preventing abuse, begging or harassment from people or governments due to your wealth or politics; if you've inadvertently received tainted coins; protecting your funds from the ex-wife after divorce; making charitable or political donations; trading mined crytocurrencies OTC such that the price paid is private and the settlement is entirely onchain; because you hold the perfectly reasonable opinion that KYC is invasive and encourages abuses of power etc. It's also a basic human right.

 For instance railgun on Polygon allows you to create a view key to particular transactions you've made in order to prove to the authorities, if you should need to, that the usage of such was entirely legitimate. Revealing any transactions however is entirely a choice for the user, there is no admin with visibility or the ability to coerce this. You can do any of the above use cases with it, and more, or use it as just a mixer. It also seems to be much cheaper to use than a bitcoin mixer and can use any quantity of wrapped tokens.

 Tornado Cash lacked the facility for users to prove their use of such was legitimate, which might go some ways to explaining the massive over the top reaction to it.

Bitcoin is not truly anonymous, it's pseudo-anonymous, that is why people use mixers to preserve their privacy. You can not stop criminals from using whatever tools are available to them. Even KYC exchanges can be used to launder money. Anti-money laundering laws aren't actually effective at stopping criminal activity. It costs more to comply with AML laws than the amount of funds confiscated from illicit activity. These costs means billions of dollars in profit for the AML compliance industry so there is an enormous financial motivation to keep these ineffective policies in place.

 True, though if you know a thing or two about privacy sets and timings you can make the chances of tracing blockchain transactions rather tiny. Simplest way is to use the entirely of the DEX liquidity on the blockchain ( which is billions even for smaller ones) to mask your own transactions. For instance if I deposited my protocols own token, let's call it MyWonderfulProtocol Coin, to pay my coder's salaries with. Every month I can privately swap MWPC for Dai, USDC or USDT and transfer that to the devs. The total amount swapped would be visible, but the internal transfers to each dev would be entirely anonymous, and hidden amongst all the other stablecoin transactions. The external transaction would be mainly lost in all of the other volume surrounding MWPC, as it's wonderful and therefore has lots of volume. The devs can then withdraw and sell on a CEX without having disclosed their salaries.

 If plod or the IRS demands to know why I'm putting tens of thousands of dollars a month through railgun then I can merely generate a view key for them to show that the use and payments made were entirely legitimate. Or tell them to go forth and multiply as I know that if they do take me to court I can prove compliance.

 Hence it isn't that mixers are inherently a bad thing, though the fees charged seem outrageous to me, just dangerous to know or use due to their extremely limited functionality.

[The Sceptical Chymist]

In July, we found that almost 10% of all cryptocurrencies held by illicit entities have been laundered through a mixer in 2022.

Huh.  I read the article in the link, but I'm wondering how the government knows what coins were mixed--and by that I mean I'm curious as to whether the pigs used chain analysis tools to figure it out or if they figured it out via other means while doing their investigations.  I would assume if law enforcement agencies could use analysis tools to crack money laundering cases mixing would be kind of useless.

If I remember correctly, one of the reasons why Chipmixer was charged as guilty was because there was a chat log from one of the agents asking whether they could help launder their money, and the operator said yes.

Jesus, I wonder if that's actually true.  I don't know who was running CM, but if they answered a question like that in the affirmative then they were fucking stupid.

[BlackBoss_]

Huh.  I read the article in the link, but I'm wondering how the government knows what coins were mixed--and by that I mean I'm curious as to whether the pigs used chain analysis tools to figure it out or if they figured it out via other means while doing their investigations.  I would assume if law enforcement agencies could use analysis tools to crack money laundering cases mixing would be kind of useless.

They offered millions of dollar for anyone can crack the Monero untraceable transactions.

IRS Dishes Out $1.25 Million for Data Firms to Crack Monero
Chainalysis and Texas firm win million-dollar IRS contract to crack Monero

They are news from 2020 and I don't find any news about further progress to crack down Monero untraceable transactions since 2020.

[OgNasty]

Huh.  I read the article in the link, but I'm wondering how the government knows what coins were mixed--and by that I mean I'm curious as to whether the pigs used chain analysis tools to figure it out or if they figured it out via other means while doing their investigations.  I would assume if law enforcement agencies could use analysis tools to crack money laundering cases mixing would be kind of useless.

They offered millions of dollar for anyone can crack the Monero untraceable transactions.

IRS Dishes Out $1.25 Million for Data Firms to Crack Monero
Chainalysis and Texas firm win million-dollar IRS contract to crack Monero

They are news from 2020 and I don't find any news about further progress to crack down Monero untraceable transactions since 2020.

There’s a reason that a lot of exchanges don’t list Monero. The government has already come forward and said that mixers are useless for mixing large amounts, but that won’t stop thieves from trying and eventually getting arrested. My question would be, if mixers aren’t facilitating money laundering, who is using them and why? I don’t buy the privacy argument, there are other ways to use BTC with privacy besides mixing coins.

[Spinflight]

There’s a reason that a lot of exchanges don’t list Monero. The government has already come forward and said that mixers are useless for mixing large amounts, but that won’t stop thieves from trying and eventually getting arrested. My question would be, if mixers aren’t facilitating money laundering, who is using them and why? I don’t buy the privacy argument, there are other ways to use BTC with privacy besides mixing coins.

 If you don't buy the privacy argument then that raises the question of why?

 Simple question for you, assuming your are in the USA or similar jurisdiction, do you pay your taxes on crypto? If you do then it is perfectly natural for you to consult a tax lawyer. Any conversations with such a lawyer are privileged hence your bank and your government have no business knowing that you are paying a lawyer as it is intrinsically private. Should the government be able to target those who consult with a tax lawyer, assuming they are doing something wrong, then that would be an abuse.

 Hence anyone in crypto has a need for onchain privacy such that they can pay such a lawyer privately without the government or their bank knowing.

 The government can't have it both ways, either everyone pays their taxes and therefore has a need for private transactions, or they don't tax crypto earnings.

[Ale88]

In your opinion, how to prevent the use of bitcoin as a means of money laundering? While we may not recommend going to KYC, it is useless and the anonymity of bitcoins will be lost.

You simply cant. A neutral tool will always be used both for good purposes and for bad purposes. Just like how you can't 100% force people to not use knives to stab people, and how you can't 100% force people to not use the internet to scam people.

This is it, as simple as that. Every tool can be used to do good or bad, it's up to the person using that tool deciding what to do. It's also interesting how some people, some media, and some governments, pretend that all the bad things are made using cryptos as payments, sure, because before cryptos there were no money laundering, no terrorism, and other things like that...

[fruktik]

Bitcoin is not truly anonymous, it's pseudo-anonymous, that is why people use mixers to preserve their privacy. You can not stop criminals from using whatever tools are available to them. Even KYC exchanges can be used to launder money. Anti-money laundering laws aren't actually effective at stopping criminal activity. It costs more to comply with AML laws than the amount of funds confiscated from illicit activity. These costs means billions of dollars in profit for the AML compliance industry so there is an enormous financial motivation to keep these ineffective policies in place.

       What is now stopping criminals from buying other people's data and getting verified on centralized exchanges? Nothing. Therefore, there is still an option with mixers to cover your tracks. I think that this method is used quite often, but it is not the only one. Whoever needs it will always find workarounds. Sometimes, it's just a matter of time.
       Well, not only mixers are in demand among criminals. There are many respectable people for whom anonymity is important, because. the state sticks its nose into private life.

[Blitzboy]

Bitcoin's privacy and transparency have drawbacks. They make it appealing and difficult. Isnt every great invention like that? Internet benefits and cybercrime are examples. Bitmixers are tools. A mixer can be used for good or evil, like a knife. Separate the tool from user behavior.

We could use advanced analytics to detect criminal activities without undermining Bitcoin's essential principles. Isnt Bitcoin about changing things and finding new solutions? We have brilliant minds on this! Bitcoin mixers are guilty by accountability. Platforms must prevent crime even while people abuse it. Navigating a new, disruptive technology isnt a conspiracy. Have trust!

[Fiatless]

In your opinion, how to prevent the use of bitcoin as a means of money laundering? While we may not recommend going to KYC, it is useless and the anonymity of bitcoins will be lost.

The majority of crypto users don't support the use of mixers to cover up criminal activities. But the problem will be how to identify funds gotten from illegal means. Mixers offer services that enhance privacy but how people use it cannot be controlled. Even some wonderful services or products can be misused. Who would have taught that an aircraft will be used for a terrorist attack?

To this day, many bitcoin mixers have been caught in money laundering cases, such as Chipmixer, Tornado Cash, Bitcoin Fog, and others. Apart from that, even though the bitcoin mixer users are at fault, those who make the mistake of using a mixer as a way of covering up their crimes, why is the Bitcoin mixer platform also considered guilty? Or is there a conspiracy between them?

Bitcoin is a decentralized currency so there is nobody or institutions to protect it when attacks come. Most of these conventional banks engage in much more illegal activities but because they are connected to the government or big corporations, the news is kept secret from the public. But the news of bitcoin mixer being used for criminal activities will receive wide coverage. Top banks like HSBC, Standard Chartered, Bank of New York Mellon, JPMorgan Chase, Deutsche Bank, etc, are all agents of multibillion-dollar money laundering activities but their scandals attract little media coverage.

[Doan9269]

In your opinion, how to prevent the use of bitcoin as a means of money laundering? While we may not recommend going to KYC, it is useless and the anonymity of bitcoins will be lost.

The government have been trying the impossibilities they know themselves that can't be regulated, some good examples were already made from above comments, government cannot control every of human activities effectively, they have been raising campaigns over child abuse, some do drugs dealings but yet people make use of this same thing for the good and the bad intentions despite they don't mind the jail terms conditions and while same drugs are used in the pharmaceutical industries for human health, which means inherently every thing has a good and bad side just as we have in people as well, there are good and bad people but we all live together.

To this day, many bitcoin mixers have been caught in money laundering cases, such as Chipmixer, Tornado Cash, Bitcoin Fog, and others. Apart from that, even though the bitcoin mixer users are at fault, those who make the mistake of using a mixer as a way of covering up their crimes, why is the Bitcoin mixer platform also considered guilty? Or is there a conspiracy between them?

If you're seeking for privacy with the use of a bitcoin mixer there's nothing bad in that, now when we discover the risk in using one and the threat they suffer from government regulations then it's better for one to look for a best alternative means to using them, maybe by running a full node transaction using bitcoincore could be more encourage, mixers are not guilty of anything just as banks fan accommodate opening bank account for anyone, they are open for making their own business as every other organizations operates.

[LogitechMouse]

In your opinion, how to prevent the use of bitcoin as a means of money laundering? While we may not recommend going to KYC, it is useless and the anonymity of bitcoins will be lost.

Just like fiat currency, you can't prevent it.
Fiat currency has been used by different people in money laundering, and so is Bitcoin as well.

Re: Why are bitcoin mixers often accused of laundering money?

Because of the transaction making it anonymous? I think this is the reason why criminals often use mixers in order to spread out the money that they got. Bitcoin mixers are just a tool for both the innocent, and the criminals to be used. It's like Bitcoin being used as a way to scam people. Criminals are using these mixers for transaction. As for a way to stop this, seizing it I guess will be the solution like what they did to Chipmixer. The question is until when will the authorities will be doing it knowing that when they seize one mixer, multiple mixers arise.

[Plaguedeath]

The question is until when will the authorities will be doing it knowing that when they seize one mixer, multiple mixers arise.

Every new mixer will comes up because they understand there are demands for this business, since the authorities only handle a big or popular mixer, so it will keep repeat. Even the authorities will declare mixer is illegal, anyone can still use Tor network and the mixer is still available in black market. So, there's no one can stop anyone to use Bitcoin and mixer.