The fate of mixers.

[Zoomic]

What is the fate of mixers in the cryptocurrency industry?
Mixers are often seen as bad players in the cryptocurrency industry. They can be taken down by FBI or other agencies at any time. The question is, why new mixers still coming to the industry?

For instance, in this recent Sinbad incidence, it is alleged that Sinbad committed many crimes as;

Sinbad processed funds from the hacks of Horizon Bridge and Axie Infinity, the release said. It's also moved funds tied to "sanctions evasion, drug trafficking, the purchase of child sexual abuse materials and additional illicit sales on darknet marketplaces."

Fellow analytics service Elliptic claimed Sinbad was also used to move some of the $35 million stolen from Atomic Wallet earlier this year.

SEE my question,
Do the mixers actually know where transactions are coming from, maybe to not allow the transaction if it's from a criminal organisation. For instance, if Mr Bob wants to mix bitcoin he used to purchase arms in the darker, will Sinbad know that the particular coin is coming from dark net transactions? If No, it therefore means all mixers are vulnerable and can be taken down at anytime.

[Upgrade00]

Do the mixers actually know where transactions are coming from, maybe to not allow the transaction if it's from a criminal organisation. For instance, if Mr Bob wants to mix bitcoin he used to purchase arms in the darker, will Sinbad know that the particular coin is coming from dark net transactions?

This is possible with the right level of censorship and centralization. The government is basically tightening the noise of decentralization leaving only very little room for mixers to operate in an effort to ensure that they can track everything and no one stays off the radar.

If No, it therefore means all mixers are vulnerable and can be taken down at anytime.

Short answer is yes.

Also short answer is that to escape the hammer of the authorities mixers may have to become an extension which can be used to track Bitcoin users. This doesn't provide full protection though.

[bitmover]

In my opinion, in the future we will see mixers that will refuse to mix coins from hacks or any other criminals activity.

In order to achieve that, a high level of blockchain analytics is necessary, so they can automatically refuse coins from some addresses.

[TryNinja]

As pointed out by LoyceV:

From their own website (archived):

A cryptocurrency mixing service is not necessarily illegal.

There is an endless discussion that involes freedom of speech and freedom of privacy. Mixers are good but can be used by criminals and North Korean hackers. Is "bad people use it" enough to prevent actual privacy seekers? I for one would like for mixers to continue to exist, and in a utopian way, only be used by good people.

Maybe @FIODNederland can comment on it.

[Zoomic]

Also short answer is that to escape the hammer of the authorities mixers may have to become an extension which can be used to track Bitcoin users. This doesn't provide full protection though.

This will just be like mixers working against what they are known for. I mean, in the course of providing anonymity, they now turn to privacy invaders.

In my opinion, in the future we will see mixers that will refuse to mix coins from hacks or any other criminals activity.

In order to achieve that, a high level of blockchain analytics is necessary, so they can automatically refuse coins from some addresses.

This seems to be the only way to draw a balance between providing privacy and not working against the government. But by then, it will cost much to mix. The cost of complicated blockchain analysis will be added to the cost of mixing.

[TravelMug]

In my opinion, in the future we will see mixers that will refuse to mix coins from hacks or any other criminals activity.

In order to achieve that, a high level of blockchain analytics is necessary, so they can automatically refuse coins from some addresses.

It could be, but how fast they can identify a tainted vs untainted coins before they processed it?

I mean for some of us we might be surprised if we see our coins being rejected because mixers deemed it like that, and without us really knowing the source then this could be a big problem for everyone.

As for the fate of mixers, just look at it's history, just saying.

[examplens]

There is an endless discussion that involes freedom of speech and freedom of privacy. Mixers are good but can be used by criminals and North Korean hackers. Is "bad people use it" enough to prevent actual privacy seekers? I for one would like for mixers to continue to exist, and in a utopian way, only be used by good people.

Maybe @FIODNederland can comment on it.

A complete discussion of the legality of mixers is like a perpetual mobile. If mixers were to check assets before mixing, then they would lose their status as an anonymization service. Again, if they allow all transactions, this automatically marks them as a money laundering service.
In fact, the whole process was failed by those who are supposed to prevent the theft of money, corruption, illegal trade and whatever.

[PX-Z]

In my opinion, in the future we will see mixers that will refuse to mix coins from hacks or any other criminals activity.

It could be, but how fast they can identify a tainted vs untainted coins before they processed it?

Hack transactions can be traced, hackers don't transfer the hacked coins immediately to another addresses. That's why exchanges works together to block those address used to received from hack exchanges.
If mixers work this way just like what i have mentioned before on the same discussion when x mixer was seized. Then we will see little to no mixers getting shut.

[Potato Chips]

Basically why I view them as a service that comes goes -- a lot more often than custodial exchanges.

I'm afraid this trend will continue... since authorities focus a lot on the negative side, completely ignoring those who came for privacy. In addition, didn't some/a govt/s wanted for mixers to register? and most likely implement AML policies as well which essentially breaks the service.

Nevertheless, seeing how new ones are coming up probably means there is a demand for the service.

[TryNinja]

A complete discussion of the legality of mixers is like a perpetual mobile. If mixers were to check assets before mixing, then they would lose their status as an anonymization service. Again, if they allow all transactions, this automatically marks them as a money laundering service.
In fact, the whole process was failed by those who are supposed to prevent the theft of money, corruption, illegal trade and whatever.

It depends, actually. If all you want is anonimization onchain, which means I, Try Ninja, can't know the link between your address A and mixed address Z, then it doesn't matter if the mixer asks you for KYC or whatever. The mixer operator knows, but the outside public doesn't.

[dansus021]

Mixer exist to enhance the privacy but most of the people use it for launder money. So I do agree with you if the mixer provider can know wheter the transaction is coming from the hacker/dark activities or just want to secure their btc. But I think is hard to do so, from hack yes we can trace it and usually explorer like etherscan made label on it. But dark related activies i think still hard to find

[Darker45]

Mixer exist to enhance the privacy but most of the people use it for launder money. So I do agree with you if the mixer provider can know wheter the transaction is coming from the hacker/dark activities or just want to secure their btc. But I think is hard to do so, from hack yes we can trace it and usually explorer like etherscan made label on it. But dark related activies i think still hard to find

Wait a minute, can you back up your statement that most people use mixers to launder money? If this is the case, then all mixers should already be shut down and seized by the authorities. But I don't agree with you. And I'm 100% sure that many who use mixers only want that their transactions can't be traced. And that's not laundering. To erase tracks is not to launder.

Anyway, I'm afraid that if mixers' main function becomes to clean dirty money, governments might declare war on them and we might end up mostly with centralized mixers, which isn't what anonymity and privacy are all about.

[NotATether]

There are two kinds of people in life,

Those who say that mixing is a right,

And those who don't.

[SquirrelJulietGarden]

There is an endless discussion that involes freedom of speech and freedom of privacy. Mixers are good but can be used by criminals and North Korean hackers. Is "bad people use it" enough to prevent actual privacy seekers? I for one would like for mixers to continue to exist, and in a utopian way, only be used by good people.

Seems like Lazarus group is a root cause of all mixer seizures recent years. Seems like Lazarus group is a favorite target of many governments and authorities so that if any mixer is used by Lazarus group, it will be automatically put in a black list of governments, authorities and will be in list of seizure attempts from governments.

The quote is interesting but it is true. Recent weeks, there is a lawsuit about Tornado Cash. A source code, a service is considered as a criminal tool but is it true by laws.

[Kemarit]

There is an endless discussion that involes freedom of speech and freedom of privacy. Mixers are good but can be used by criminals and North Korean hackers. Is "bad people use it" enough to prevent actual privacy seekers? I for one would like for mixers to continue to exist, and in a utopian way, only be used by good people.

Seems like Lazarus group is a root cause of all mixer seizures recent years. Seems like Lazarus group is a favorite target of many governments and authorities so that if any mixer is used by Lazarus group, it will be automatically put in a black list of governments, authorities and will be in list of seizure attempts from governments.

The quote is interesting but it is true. Recent weeks, there is a lawsuit about Tornado Cash. A source code, a service is considered as a criminal tool but is it true by laws.

They have been the bane of all crypto world in my opinion, they have been in offensive, exchanges, gambling platform and anything that they can get their hands as we all know that this is state sponsored hacking group.

So yeah, it will be a endless debate here, some of us who uses mixers just want to be private, while there are groups that can take advantage of mixers. However, we've seen the ups and downs, when one mixers was seized, it open up a huge opportunity for other mixers to come into the picture and take a slice on that big pie.

[Yamane_Keto]

As pointed out by LoyceV:

From their own website (archived):

A cryptocurrency mixing service is not necessarily illegal.

This puts us in the problem of defining the minimum that a mixer must provide in order to be described as legal, or in other words, how did the regulators know that In the case of Sinbad.io, more than 50 percent of all mixed cryptocurrencies were found to have a criminal origin.

In the case of Sinbad.io, more than 50 percent of all mixed cryptocurrencies were found to have a criminal origin. In the case of Sinbad. io, there are no measures in place to implement and enforce a Know Your Customer (KYC) or Know Your Transaction (KYT) policy.

Without seizing the servers, and having the customers’ data recorded and then ensuring that the percentage is higher than 50% and then arresting them, this was determined in advance when they tracked the servers and tried to shut down the service.

I think that the government's policy towards the mixers will be to force them to provide and record data and close every large mixer that does not cooperate.

[btc_angela]

There are two kinds of people in life,

Those who say that mixing is a right,

And those who don't.

Sadly though, those who uses it for the right reasons are being affected negatively, and it's part and parcel of it.

Looking at the fate of mixers, we all know that history will repeat itself. And if we try to uproot the causes, as per their report it should be the Lazarus group.

But any government for that matter, not just the US can't bring it down that easy.

[EarnOnVictor]

What is the fate of mixers in the cryptocurrency industry?

The fate of mixers in the crypto industry has never been certain and the Sinbad incident is only one of the cases that have happened and will soon be forgotten. But mixers continue to flourish in the crypto world as anonymity is the order of the day. The owners of the mixers that were pulldown by the government today might continue to open other ones, this is not new unless you didn't notice. Some still had the alternatives even before the government pulled it down, then they continued with it and may also open another new alternative, and it goes on like that.

Also, there are many of them already, the government can't pull all down unless they trace illicit activities to them. This is even as there are decentralised ones that I've never heard the government pulls down before.

For instance, if Mr Bob wants to mix bitcoin he used to purchase arms in the darker, will Sinbad know that the particular coin is coming from dark net transactions? If No, it therefore means all mixers are vulnerable and can be taken down at anytime.

The truth is that they know at times, but at times too, they may not know, regardless, anyone mixing coins is mainly to be blamed since mixers can't know all intentions.

[yhiaali3]

Mixers will remain a constantly controversial issue between supporters and opponents. On the one hand, they are a good service for preserving identity, and on the other hand, they are used by criminals to hide their crimes.

Mixers, like anything else, have a positive and negative side, but governments only look at the negative side and accuse everyone who uses Mixers of using them for illegal purposes.

Therefore, this conflict will most likely continue to exist between governments and users who want to maintain their privacy, and since mixers are financially profitable, they will most likely continue to exist despite government opposition.

[Saisher]

SEE my question,
Do the mixers actually know where transactions are coming from, maybe to not allow the transaction if it's from a criminal organisation. For instance, if Mr Bob wants to mix bitcoin he used to purchase arms in the darker, will Sinbad know that the particular coin is coming from dark net transactions? If No, it therefore means all mixers are vulnerable and can be taken down at anytime.

If Mixers has its way it wants to remain in this business as long as it can because there's a big demand for mixers but they have no control over every coming transaction, it cannot just flag addresses because it will ruin its reputation and they have to prove that the address is tarnished, there's already an announcement that mixers are not illegal it just so happens that they are being exploited by criminals.
Maybe in the future, there will be an interaction between authorities and mixing industries to add protection to their platform from being used by money launderers.