Mixers - Are we the product?

[alani123]

I can't be the only one.

After chipmixer was shut down, a ton of other mixers started operating at a very close proximity time-wise.
Is that fishy or am I paranoid?
It can't be that one sided I think.

Chipmixer had indeed become too big. There was a lot of co-mingling between its funds and funds from darknet marketplaces.
So after one of the biggest darknet marketplaces was traced and shut down, naturally authorities also went for this big mixer.

While authorities claim to have managed to seize more than 1909.4 bitcoins in that sting, that probably didn't cover the full balances of the mixer.

The recently seized mixer, Sinbad, was said to have been a re-launch of a blender that came under sanctions for having laundered funds that were stolen by North Korean hackers. We can all safely assume that this is very notorious business. And what most of these services had in common was that they were advertising on bitcointalk.

This really does make you think, WHY? Why would a service allegedly moving billions worth in proceeds need to advertise here, and so aggressively even, especially when their customer base seems to be set in stone from day one?

I have a simple theory on why that might be happening. By looking at what generated the largest volumes in these mixers, I conclude that no bitcointalk user could be possibly be in need to launder billions in hacked funds, and would never be in dire need to launder cash associated with violent crime like drugs or fraud at this magnitude.

Instead, an illusion of privacy was promoted to clearnet users (that's us here in bitcointalk), while in fact our "cleaner" funds were used to bail out real criminals and terrorists. Because to a mixer, a clean bitcoin, is worth more than market value, so they were willing to overpay for it in the form of advertising. Come to think of it, the recent bust of Sinbad served as a reminder that mixers are in fact very traceable.

Authorities even had contacted exchanges ahead of time and even users participating in the signature campaign faced issues having to answer to authorities:

Vielleicht werden die ja von FBI usw ja auch schon ins Visier genommen. 

Ich könnte mir vorstellen, dass die Sinbad Kampagne da vielleicht schon noch ein Nachspiel haben wird, zumindest hat mich Binance heute folgendes gefragt:



Dem aufmerksamen Leser dürfte die Adresse bekannt vorkommen, ist nämlich die Escrow Adresse der Sinbad Kampagne.

What's the point then, of using a mixer, when your funds can be traced so easily? Do its methods of mixing really work, or could it be that this is intended functionality for someone to get the short end of the stick?

This is all just a theory of course, but honestly, trust no one, not even me.
It's a very real possibility though, that with mixers, we might be the product.

[Charles-Tim]

What's the point then, of using a mixer, when your funds can be traced so easily? Do its methods of mixing really work, or could it be that this is intended functionality for someone to get the short end of the stick?

Not that your coins was traced, but it was noticed that coins was sent to you from an address that belongs to a mixer. So people that used Binance to receive coin from the mixer address were affected. But people that are using decentralized exchanges will not be affected.

[PrivacyG]

Instead, an illusion of privacy was promoted to clearnet users (that's us here in bitcointalk), while in fact our "cleaner" funds were used to bail out real criminals and terrorists. Because to a mixer, a clean bitcoin, is worth more than market value, so they were willing to overpay for it in the form of advertising. Come to think of it, the recent bust of Sinbad served as a reminder that mixers are in fact very traceable.

This is a very interesting theory.

Do you mean Mixers are in your theory used to replace bad money of criminals with good money from the innocent?

As in there is a pool of criminal money and every Mixing Transaction is pretty much,
Innocent sends 0.5 Bitcoin from legitimate source to Mixer
Mixer sends back 0.5 Bitcoin from criminal source to Innocent

And that they advertised on Bitcoin Talk so they could get rid of more criminal money while bringing in more Innocents?

I never thought of this.  If that is the case, ban Mixers.  But then how difficult is it to get Bitcoin from Innocents?  Bisq, Monero Atomic Swaps et cetera can all be ways of doing this.  A criminal with BILLIONS can open up a seemingly legitimate Blockchain Analysis tool particularly to artificially 'clean' their own criminal Bitcoin by bypassing the filters.  Or they could bribe already existing Blockchain Analysis companies to bypass the filters.

I do not think this is the case but interesting outlook.

[Marvelman]

What's the point then, of using a mixer, when your funds can be traced so easily? Do its methods of mixing really work, or could it be that this is intended functionality for someone to get the short end of the stick?

The use of a mixer, as far as I understand it, is to hide the source of your coins, or rather, to break the chain that connects the sources of the coins to the destination. The point of using a mixer was never to hide the trail of your coins to the mixer.

I don't know how some people still don't get this.

[alani123]

What's the point then, of using a mixer, when your funds can be traced so easily? Do its methods of mixing really work, or could it be that this is intended functionality for someone to get the short end of the stick?

The use of a mixer, as far as I understand it, is to hide the source of your coins, or rather, to break the chain that connects the sources of the coins to the destination. The point of using a mixer was never to hide the trail of your coins to the mixer.

It's a real challenge these days to find a mixer that doesn't talk about privacy and anonymity.
Some even talk about exchanges tracking you:

In difficult times like these, when even the smallest online shops or cryptocurrency exchanges are tracking all your transactions, you shouldn't forget about privacy, since privacy is an inalienable right of every person.

The above is from a mixer's promotional materials. Tell me if THAT doesn't seem like the mixer is directly encouraging the user to interact between exchange and mixer.

What kind of anonymity and privacy that might be, that associates your KYC'd exchange account to criminally tainted coins, I don't know.
But surely mixers would like us to believe that they stand for privacy.

[Aanuoluwatofunmi]

Alot of things that were not n place before the government threat on mixers are now coming out after the stipulated ban of mixers on bitcointalk, now we don't know the way forward, but the truth to be told here is that not all miners are found guilty of this alleged fraudulent related activities, people are making business to help safe the privacy of bitcoiners, but it's now a pity that the whole idea has been hijacked by miscreants to engage in fraudulent acts and the governments are not also taking decision to help the situation but rather seing it as an avenue to attack bitcoin users the more against their privacy.

[Darker45]

I think everybody who is using a mixer is a product so to speak. The mixer needs as much funds from different sources as possible. The more users, the more they mix, the better for privacy. So, every unique user is actually contributing to the most fundamental operation of the mixer. In which case, they're all products. But, in a way, those who are bringing in clean coins are probably serving more those who are only bringing in coins coming from criminal transactions. After all, mixers have two kinds of users, those who are simply after privacy and those who badly need to erase some criminal tracks.

[OcTradism]

I think everybody who is using a mixer is a product so to speak. The mixer needs as much funds from different sources as possible. The more users, the more they mix, the better for privacy. So, every unique user is actually contributing to the most fundamental operation of the mixer. In which case, they're all products. But, in a way, those who are bringing in clean coins are probably serving more those who are only bringing in coins coming from criminal transactions. After all, mixers have two kinds of users, those who are simply after privacy and those who badly need to erase some criminal tracks.

They receive coins from different sources, from criminal and innocent users, clean and dark coins, then they mix those coins together and even with their coins from their budget to initiate their business.

I don't see problems that mixers mix coins from multiple sources and send mixed coins to their users after a completed mixing process. I think it is too naive to think that if I am an innocent user and my coins used to deposit to a mixer will give me clean coins after the mixing process. I know my received coins after mixing will be tainted.

Usually exchanges don't trace your coins too far, too deep in history so tainted coins will be limited with some rounds of transactions. It can be differently defined by exchanges and their analysis tools for AML compliance.

[rat03gopoh]

What's the point then, of using a mixer, when your funds can be traced so easily?

I'dn't say it's easy, it takes a lot of effort including tracking down criminals first. An address can't simply be a means of identification without finding the person and then investigating whatever they have. In other words, criminals are the first target, then mixers are second. If the mixer is in first place, then global regulations will close the existing mixer services regardless of whether they've been involved in money laundering or not.
​

[stompix]

I can't be the only one.

Yes you are!

Instead, an illusion of privacy was promoted to clearnet users (that's us here in bitcointalk), while in fact our "cleaner" funds were used to bail out real criminals and terrorists. Because to a mixer, a clean bitcoin, is worth more than market value, so they were willing to overpay for it in the form of advertising. Come to think of it, the recent bust of Sinbad served as a reminder that mixers are in fact very traceable.

No illusion, I've sent by mistake and then just out of pure curiosity coins mixed from CM directly to two exchanges, it's been two years thousands in and out and not even one email or anything, and one of those exchnges is probably the most draconian one when it comes to KYC. Same for my currently advertised mixer, sent a batch to Binance, 3 months and nothing..

What's the point then, of using a mixer, when your funds can be traced so easily? Do its methods of mixing really work, or could it be that this is intended functionality for someone to get the short end of the stick?

First, the funds weren't mixed!
The authorities traced Sinbad to this forum and labeled the two addresses mentioned in the topic as being owned by Sinbad when in fact they were the campaign payment addresses. Some used for payments not their own wallet but Binance direct address, so ...like how hard was to trace that?

So again, there was no mixing whatsoever involved at any step!!

[alani123]

Pretty bold to admit connecting exchange accounts to a mixer publicly 😅 I wouldn't do that based how cases for accused darknet market users (that the use of a mixer makes you adjacent to) have been tried in court.
Good for you I guess!?

Seriously though, let's not for a second pretend that mixers are actually untraceable. With pretty simple checks they can be identified and many have had their accounts limited on platforms for depositing with a mixer. I guess most people wouldn't say so publicly but we've seen such posts on this forum too.

Even for mixers that supposedly keep no records, feds were able to identify how many coins they had mixed (see chipmixer bust).

[stompix]

Pretty bold to admit connecting exchange accounts to a mixer publicly 😅 I wouldn't do that based how cases for accused darknet market users (that the use of a mixer makes you adjacent to) have been tried in court.

Why is that a bold move?
Do you know my name, my account on that exchange, the amount I sent and from where, and even if you where to find out that, why would the exchange do anything about it?
Are the 4 guys that sent their coins from Sinbad directly to Binance on death row awaiting their execution or am I missing something?

Seriously though, let's not for a second pretend that mixers are actually untraceable. With pretty simple checks they can be identified and many have had their accounts limited on platforms for depositing with a mixer.

Why call it pretending when there are numerous cases proving the opposite, it's not just me doing this, there are a few others of my CM colleagues that have done the same, I won't quote them here but a simple search would show you enough examples.

[shield132]

I can't be the only one.

After chipmixer was shut down, a ton of other mixers started operating at a very close proximity time-wise.
Is that fishy or am I paranoid?
It can't be that one sided I think.

Before Chipmixer we had bitmixer. Bitmixer was really the biggest bitcoin mixer but their owner decided to shut down this money-making website because many people were arrested in 2016-17 and many darknets were seized, he would probably be the next. Bitmixer shut down their service and then many people created mixer websites, many used the shut down of bitmixer to start a new business and many mixers came up on market. Chipmixer was only invented two months earlier before bitmixer announced shutdown of their service. Chipmixer started signature campaign similar to bitmixer.io and slightly increased their payrate soon. Then soon bitmixer announced a shutdown but chipmixer continued. Despite a huge rise of bitcoin's price, chipmixer kept their original bitcoin payrates and hired even more people. Chipmixer hired one of the best, trustworthy and famous bitcointalk users, promoted service through them and become one of the biggest mixer.

Btw not many mixers started operating after chipmixer was shut down. Many mixers that you see advertised on this forum started this business before chipmixer's shutdown, not after their shutdown.

This really does make you think, WHY? Why would a service allegedly moving billions worth in proceeds need to advertise here, and so aggressively even, especially when their customer base seems to be set in stone from day one?

Every mixer become famous from this forum. There is no better place other than this forum for crypto enthusiasts. This is the forum where satoshi was posting himself, isn't that enough?

I have a simple theory on why that might be happening. By looking at what generated the largest volumes in these mixers, I conclude that no bitcointalk user could be possibly be in need to launder billions in hacked funds, and would never be in dire need to launder cash associated with violent crime like drugs or fraud at this magnitude.

Instead, an illusion of privacy was promoted to clearnet users (that's us here in bitcointalk), while in fact our "cleaner" funds were used to bail out real criminals and terrorists. Because to a mixer, a clean bitcoin, is worth more than market value, so they were willing to overpay for it in the form of advertising. Come to think of it, the recent bust of Sinbad served as a reminder that mixers are in fact very traceable.

Why do you think that bitcointalk users wouldn't generate large volume? Every early adopter comes from this forum, every business rose from this forum, how can you say that?
These mixers weren't using our clean coins to feed darknet users. You can check that recent mixers focus on offering you offering coins that will pass AML test with high score. Mixers focus on making you untraceable and protecting your privacy.

[ABCbits]

Instead, an illusion of privacy was promoted to clearnet users (that's us here in bitcointalk), while in fact our "cleaner" funds were used to bail out real criminals and terrorists. Because to a mixer, a clean bitcoin, is worth more than market value, so they were willing to overpay for it in the form of advertising. Come to think of it, the recent bust of Sinbad served as a reminder that mixers are in fact very traceable.

I doubt this part of your theory is true when authority simply treat all known coin from mixer as tainted.

This is all just a theory of course, but honestly, trust no one, not even me.
It's a very real possibility though, that with mixers, we might be the product.

In that case, consider CoinJoin instead.

Seriously though, let's not for a second pretend that mixers are actually untraceable. With pretty simple checks they can be identified and many have had their accounts limited on platforms for depositing with a mixer. I guess most people wouldn't say so publicly but we've seen such posts on this forum too.

You need to see difference between,
1. Checking whether a coin comes from mixer. This part isn't hard.
2. Knowing actual source of the coin with it's associated TXID (before it's mixed). This part usually is much harder, although it comes down to how well certain mixing process works.

[alani123]

We have to consider, why was chipmixer caught with thousands of HYDRA marketplace bitcoins when they were busted?

Since they are a service that gets coins and disperses different coins in short notice, why would they hoard so many coins?
This brings more credibility to the theory that mixers are just a front by darknet market operators and other types of notorious persons to launder their own stash.

[yhiaali3]

A really interesting theory, then it can be said that mixers play the role of intermediary between criminals looking to hide their tainted money and users looking for privacy, as the tainted coins are discarded and replaced with clean coins.

Criminals get clean coins while privacy-seeking users get tainted coins. This is a scenario that sounds pretty disgusting.

I do not know if this scenario is correct, but on the other hand, the opposite can be said, that governments are promoting such a theory to discredit mixers?

It cannot be said that all mixers are innocent, but at the same time, not all of them are evil.

[EarnOnVictor]

-snip-
This really does make you think, WHY? Why would a service allegedly moving billions worth in proceeds need to advertise here, and so aggressively even, especially when their customer base seems to be set in stone from day one?

I have a simple theory on why that might be happening. By looking at what generated the largest volumes in these mixers, I conclude that no bitcointalk user could be possibly be in need to launder billions in hacked funds, and would never be in dire need to launder cash associated with violent crime like drugs or fraud at this magnitude.
-snip-

You have some good points there, but you are mistaken if you are limiting the reach of this forum to the users here alone.

Like any other forums and presence online with domain, we generate active traffic that is organic, this is what the m!xers and any other companies campaigning here are mostly after. It shouldn't shock you if a very small number of us active here use the service we promote, and yet, more companies are coming for advertisements.

It's about the SEO, we are delivering that excellently and they know it. If not, m!xers would not have come here campaigning with big money.

[NotATether]

After chipmixer was shut down, a ton of other mixers started operating at a very close proximity time-wise.
Is that fishy or am I paranoid?
It can't be that one sided I think.

This is not the first time this happened I think. There was a wave of mixers that operated back in 2016 - 2018, like Bitcoin Fog, BestMixer, CoinMixer (an eventual scam), even Chipmixer itself, all while Helix was getting dismantled. That was the first wave. (all of those mixers have since been destroyed.)

So I don't think it was anything new, and in fact there would've been even a third wave if mixers had not gotten banned so suddenly.

[coupable]

Instead, an illusion of privacy was promoted to clearnet users (that's us here in bitcointalk), while in fact our "cleaner" funds were used to bail out real criminals and terrorists. Because to a mixer, a clean bitcoin, is worth more than market value, so they were willing to overpay for it in the form of advertising. Come to think of it, the recent bust of Sinbad served as a reminder that mixers are in fact very traceable.

Do you really mean that mixers are exploiting the clean Bitcoin they receive from users who came through a promotional campaign on Bitcointalk to compensate for the dirty Bitcoin they receive from criminals on the dark web? This is a rather interesting theory, but it is also strange.
First, because this assumes that all of Mixer's clients from the forum are innocent people looking to protect their privacy, and that all of his clients from Darkweb are necessarily criminals who want to launder their money. This is not absolutely true, and it is certain that any information can only be confirmed by the mixer himself.
Secondly, assuming the first hypothesis is correct, this would lead to the conclusion that clean Bitcoin is equal to the dirty Bitcoin that is to be replaced, which does not seem logical because I do not think that an ordinary person who obtained Bitcoin legitimately would be interested in mixing millions of dollars.
Thirdly, this forum or any other place would not have allowed this or would not have discovered it, especially with the multiplicity of tracking methods on the blockchain and the companies that have become specialized in this, able to track many transactions and verify their source.

[AliErkic]

For centralized mixers - YES!

Have centralized mixers = get shady operators behind it
Have centralized mixers = operators want to wash own coins from crimes and hacks, get clean funds from Bitcointalk for mixing.
Centralized mixer operators will continue to abuse gullible Bitcointalk members to have fresh funds for mixing.