Has the reputation of mixers really gone too bad?

[Sanitough]

This is in connection with the recent Bybit hack, where they reportedly lost $1.5 billion. Shortly after, an article came out titled...

Bybit Funds on the Move, Could be Headed for Bitcoin Mixers ‘Next’: Elliptic

As you can see, they used the word "could," which means there’s no confirmed result yet on where the money will actually go. It’s like they’re implying that in any illegal activity, including this hack, the hackers will automatically launder the funds through a mixer to cash out, making it harder to track.

No wonder mixers have developed a bad reputation. Even though they’re meant for privacy, illegal transactions like these overshadow their legitimate uses.

Thoughts.....

[Mia Chloe]

~snip

Fact actually is I wouldn't like to put too much of a blame on mixers because everything that has a good side has a bad one too so you should definitely expect hackers and scammers to exploit the bad side too just like good enthusiasts will exploit the good side which is simply maintaining privacy.

My biggest concern about this bybit hack is the inconvenience it will cause to those that have huge stack of coins especially ETH because most of them will likely get their funds frozen too when the intend to move it.

[stadus]

That’s why the forum has distanced itself from mixers because they’re widely used by hackers and money launderers. Just like Bitcoin, mixers weren’t created for illegal purposes, but some people still use them that way. That’s why Bitcoin eventually needed regulation, and we’re already at that stage.

But when it comes to mixers, I’m not sure if regulation is even possible, since it would defeat their purpose of providing anonymity. There’s also the possibility that some of these mixers are being operated or controlled by criminals.

So, nowadays, using mixers feels risky, you never know if your coins are being mixed with laundered funds, which could put you in trouble.

[Felicity_Tide]

This clearly has nothing to do with the mixers. We should rather be concerned about how the hackers managed to pull such an hack. I have been following up with the story for a while now, and It still doesn't make any sense to me how a multi-signature cold wallet got hacked. That wallet I assume should even be safer than that of an average user who uses a standard wallet with a single private key. If such a trick could be pull off with a muti-sig, then what is the fate of those who uses a standard wallet?.

At the end of the day, the hack was probably to remind us that even those we entrust with our coin are not as perfect as we think.

My biggest concern about this bybit hack is the inconvenience it will cause to those that have huge stack of coins especially ETH because most of them will likely get their funds frozen too when the intend to move it.

That's the problem now.
I just saw a news that "Bybit confirms it has successfully frozen $42.89M in stolen funds within 24 hours". How sure are they that all the frozen funds were stolen?. They really need to take things easy on their user, how channel more energy to strengthen their security.

[ABCbits]

No wonder mixers have developed a bad reputation. Even though they’re meant for privacy, illegal transactions like these overshadow their legitimate uses.

Some government and blockchain analysis company doesn't even care whether mixers (along with similar tools) have legitimate uses. Although FWIW that news also mention DEX, CEX and other services which speculated will be used by the hacker.

My biggest concern about this bybit hack is the inconvenience it will cause to those that have huge stack of coins especially ETH because most of them will likely get their funds frozen too when the intend to move it.

If that happens, it's further proof that blockchain analysis isn't as good or reliable as some people expect.

[mirakal]

After the forum rejected mixers' promotion of their services, I also stayed away from them. I won't say they are bad, but sadly, they have become a medium for illegal activities, and the authorities have flagged their services. They might say that they are just a victim, but nobody believes such a thing since they are aware of the situation, yet they still accept it.

I don't expect mixers will regain their reputation after having many negative claims. Because no matter how hard they tried to clean their reputation, the mindset of the people/users couldn't change, thinking that they were part of a big crypto scam and illegal activities.

[Hatchy]

~snip

Fact actually is I wouldn't like to put too much of a blame on mixers because everything that has a good side has a bad one too so you should definitely expect hackers and scammers to exploit the bad side too just like good enthusiasts will exploit the good side which is simply maintaining privacy.

The mixer part is just a speculation. They could as well make use of decentralised platforms to make the funds untraceable. Mixers have been doing a great job in improving privacy for bitcoin users for long. There's definitely going to be a bad side. The government knows that cases like these would be inevitable in the future so they try every possible best to eradicate them. Aside privacy, some people use mixers for illicit activities. Even the government that may claim to be against it, no one is truly innocent. They act like that in public but may go dirty in the dark. This bybit case was unexpected and I guess their security team should try their best to improve on that.

[bittraffic]

Bybit despite how many exchanges been hacked before, they still were hacked like they didn't hardened their security for this type of attack. Whether the reputation of mixers going to stay bad or not, I think I will still be rooting for them to be successful in providing services.

And if they are going to be forced to decline services to Larazus group, they will also lose the reputation. So mixers are really in a bad spot in this kind of situation.
But I also wouldn't trust blockchain that will freeze the stolen funds because that would prove that ETH blockchain is centralized no different to the middleman we currently have like the banks.

[Jawhead999]

From the article you mentioned above, they wrote.

“The stolen Ethereum is steadily being converted to Bitcoin, using eXch and other services,” Elliptic wrote Sunday.

It looks like they're framing to attack exch since it's already clear what the "other services", but since they already show if they support Bybit, unlike exch, they no longer blame those "other services"

Oh anyway, I don't understand why people mentioning exch as a mixer since exch is purely an exchange.

Mixer is when you exchange BTC to BTC, while in exch you can't do that.

[hero_the_bossman]

From the article you mentioned above, they wrote.

“The stolen Ethereum is steadily being converted to Bitcoin, using eXch and other services,” Elliptic wrote Sunday.

It looks like they're framing to attack exch since it's already clear what the "other services", but since they already show if they support Bybit, unlike exch, they no longer blame those "other services"

Oh anyway, I don't understand why people mentioning exch as a mixer since exch is purely an exchange.

Mixer is when you exchange BTC to BTC, while in exch you can't do that.

Somebody will have to be blamed in the end, that's why.

[knowngunman]

This clearly has nothing to do with the mixers. We should rather be concerned about how the hackers managed to pull such an hack. I have been following up with the story for a while now, and It still doesn't make any sense to me how a multi-signature cold wallet got hacked. That wallet I assume should even be safer than that of an average user who uses a standard wallet with a single private key. If such a trick could be pull off with a muti-sig, then what is the fate of those who uses a standard wallet?.

At the end of the day, the hack was probably to remind us that even those we entrust with our coin are not as perfect as we think.

It has everything to do with mixer in my opinion. The argument has always been centred on the legitimacy of the mixers and how they allow criminals to get away with stolen funds. I have no problem with them running their services whichever way they want but in an obvious case like this very one involving bybit, it's crystal clear that they genuinely support illegal funds to become legal using their platforms. Secondly, the issue of multi sig wallet being hacked is not longer surprising, this is not the first time it's happening. The same way we are improving our wallet security is the same way hackers are developing alternatives to breach the security protocols.

And finally, don't entrust your coins to anyone or entity. Always remember not your keys, not your coins.

[_act_]

Fact actually is I wouldn't like to put too much of a blame on mixers because everything that has a good side has a bad one too so you should definitely expect hackers and scammers to exploit the bad side too just like good enthusiasts will exploit the good side which is simply maintaining privacy.

But it would have been good if they are helpful at times. I remember the time over $100 million was stolen and Sinbad was used for mixing the coin. Did you know that caused Sinbad to be taken down? People needs to be worry of Lazarus group. If Sinbad was helpful and know the evil addreses and stopped them, mixers campaigns will likely still be on this forum. But I know some people will give them bad reputation.

Some government and blockchain analysis company doesn't even care whether mixers (along with similar tools) have legitimate uses. Although FWIW that news also mention DEX, CEX and other services which speculated will be used by the hacker.

I have known those Dex which are actually not totally decentralized but web3 to have been used by hackers and scammers in the past. I think I even had some posts about it in the past.

[logfiles]

Depends on how one looks at it, but they are just trying to demonize privacy. Where there is money, they will always be bad actors but instead of looking at the bigger picture, they are so fast at blaming privacy tools because they can't control them

Bybit has been targeting exch before, so I am not surprised. Exch isn't even a mixer, for starters. In my opinion, the reputation of platforms like exch is far better than that of the shady banks and centralized exchanges. I still doubt if the Lazarus group is behind that hack. They are Just looking for scape goats.

[BlackBoss_]

This is in connection with the recent Bybit hack, where they reportedly lost $1.5 billion. Shortly after, an article came out titled...

Bybit Funds on the Move, Could be Headed for Bitcoin Mixers ‘Next’: Elliptic

Bitcoin is for everyone so are Bitcoin mixers and cryptocurrency mixers (altcoin mixers).

Criminals can use Bitcoin blockchain, Bitcoin mixers, altcoin mixers and it's not responsibility of mixers. It's very old story, like if a criminal used a knife, a gun to kill someone, he must be arrested and be responsible for that action. The knife, gun producers and sellers are not responsible for the criminal action.

Same with Bitcoin, altcoin mixers but treatment against mixers are different because of anti-policies from governments. That's it practically but it doesn't change fundamentals of mixers.

[Reatim]

As you can see, they used the word "could," which means there’s no confirmed result yet on where the money will actually go. It’s like they’re implying that in any illegal activity, including this hack, the hackers will automatically launder the funds through a mixer to cash out, making it harder to track.

regardless of what we think of mixers it is true anyway that they could be used to lose traces of stolen funds there could still be other ways of emptying out the wallets or moving tokens from an exchange to another but the most obvious way is of course through mixers

they are not saying it is true but since others have done it in the past this is the most likely method for these hackers to use

[Lucius]

~snip~
It looks like they're framing to attack exch since it's already clear what the "other services", but since they already show if they support Bybit, unlike exch, they no longer blame those "other services"

They have to blame someone because that's their job, right? At the end of the day, it's important for them and those who act on their "analyses" to say they did their job.

eXch does not deny that a small portion of these funds reached them, and that they will donate them to good causes.

Dear friends, to prevent any further FUD and bad energies caused by constant attack on our exchange by a small group of people abusing their influence, we are locking this thread for next 48-72 hours to prevent further dissemination of false information about eXch.

To reiterate, we would like to highlight that:

- All funds are safe

- Our operations are not affected by the ByBit hack in any way

- We are not laundering money for Lazarus/DPRK (the opposite opinion is solely a perspective of some people that wish decentralized coins' fungibility and on-chain privacy to vanish, these are long-time haters of decentralized crypto in general)

- The insignificant part of funds that was processed by us from the ByBit hack in an isolated case will be donated to various open-source initiatives dedicated to privacy and security both inside and outside crypto space. This attack on our exchange is a perfect example why we need to stimulate and support Bisq userbase growth imminently (which will be possible with Bisq Light Client within next 1-2 months), because nobody can judge a decentralized protocol.

- Hopefully, Etherscan will reconsider the "communnity note" they put today for our address pushed as a result of misleading statements of some amateur researchers that harass us, given that ByBit exploiter funds do not enter our address anymore and it's just an obvious and proven fact, which everybody can confirm. This is basically a result of continuous witch hunting on us for being the last centralized accountless non-KYC exchange out there that doesn't scam its users, where some major hack unrelated to us is being used as a precedent to attack our reputation. For some reason, they haven't put such warnings for Thorchain Ethereum addresses, that have already processed more than 200 times the total amount we processed yesterday and will continue.

For any questions, feel free to contact us using official channels (SimpleX, email and support tickets on our website).

Love and prosperity to everyone,
Sincerely yours,
Johann from Private Project Facilitators LTD / eXch

[Felicity_Tide]

It has everything to do with mixer in my opinion. The argument has always been centred on the legitimacy of the mixers and how they allow criminals to get away with stolen funds. I have no problem with them running their services whichever way they want but in an obvious case like this very one involving bybit,  Secondly, the issue of multi sig wallet being hacked is not longer surprising, this is not the first time it's happening. The same way we are improving our wallet security is the same way hackers are developing alternatives to breach the security protocols.

And finally, don't entrust your coins to anyone or entity. Always remember not your keys, not your coins.

You have a point.
But just as the news headline says "Could be headed for Bitcoin mixers", which means even if the hackers choose not use a mixing service, there is already a theory in the minds of the public that mixers are primarily used to transfer illegal/stolen funds (which isn't far from the truth though), and doesn't make much difference.

And just like you've said, "it's crystal clear that they genuinely support illegal funds to become legal using their platforms". Which you and I already know. So, even if the hackers ends up not using their service (which is not certain), it still doesn't add anything meaningful to their reputation.

But I would have been more interested in a news headline like: "Bybit got hacked, are customer's funds still safe on centralized exchanges?".

[Alpha Marine]

Fact actually is I wouldn't like to put too much of a blame on mixers because everything that has a good side has a bad one too so you should definitely expect hackers and scammers to exploit the bad side too just like good enthusiasts will exploit the good side which is simply maintaining privacy.

Before we talk about mixers, we first have to question why bybit will allow themselves to be hacked. They can't intelligently shift the blame to mixers. They assured customers that their funds and data are safe and now recent events have proved that that is not the case, so they have no right to blame anything else other than themselves. What they should focus on is making sure something like this doesn't happen again.

My biggest concern about this bybit hack is the inconvenience it will cause to those that have huge stack of coins especially ETH because most of them will likely get their funds frozen too when the intend to move it.

Do they have a right to do that? Can they simply freeze people's accounts because they want to move out their funds from the exchange? I doubt that because that will not be right. There has to be a legitimate reason before they freeze an account. Withdrawals were working fine during the hack too.

[asriloni]

Bybit despite how many exchanges been hacked before, they still were hacked like they didn't hardened their security for this type of attack. Whether the reputation of mixers going to stay bad or not, I think I will still be rooting for them to be successful in providing services.

And if they are going to be forced to decline services to Larazus group, they will also lose the reputation. So mixers are really in a bad spot in this kind of situation.
But I also wouldn't trust blockchain that will freeze the stolen funds because that would prove that ETH blockchain is centralized no different to the middleman we currently have like the banks.

Man, dealing with exchange's security is like playing never-ending puzzle. You can't really sure if your security(code) safe until someone found a chance to exploit it. Different hackers, different method and trick to exploit.

Sometimes, i wonder how much ratio between ordinary people used mixers compared to the criminal group. I very often heard mixers related to the criminal case instead being used for the good.

[Zaguru12]

It has everything to do with mixer in my opinion. The argument has always been centred on the legitimacy of the mixers and how they allow criminals to get away with stolen funds. I have no problem with them running their services whichever way they want but in an obvious case like this very one involving bybit, it's crystal clear that they genuinely support illegal funds to become legal using their platforms. Secondly, the issue of multi sig wallet being hacked is not longer surprising, this is not the first time it's happening. The same way we are improving our wallet security is the same way hackers are developing alternatives to breach the security protocols.

That is what you get when you want to go fully decentralized, not supporting what mixers do but there is never that true way of having something for the good, and without disadvantages. Seriously I don’t see any wrong the mixers have actually done here in this regard. They cannot fully shut down their services because you were too careless to actually guide your own funds. How many of P2P scam cases the so called KYCed bybit has resolved. Go to social media platforms and see the outcry of most of their users about Bybit forcefully releasing the funds during appeal to scammers or Should we also tag them as aiding criminals too.
More so it is this decentralized systems that have recovered the most funds for bybit, they should simply rather channel their funds to safeguarding their assets in the future.

My biggest concern about this bybit hack is the inconvenience it will cause to those that have huge stack of coins especially ETH because most of them will likely get their funds frozen too when the intend to move it.

Do they have a right to do that? Can they simply freeze people's accounts because they want to move out their funds from the exchange? I doubt that because that will not be right. There has to be a legitimate reason before they freeze an account. Withdrawals were working fine during the hack too.

They didn’t halt any withdrawal but there was huge congestion during the hack period where most users were moving out their funds from the exchange but to give them credit and reduce the panic then they actually made all withdrawals and even borrowed funds from the likes of bitget to cover for everything. There was simply no halt in withdrawal.

But as for them freezing customers account, I don’t know why you are surprised because it is the norm of centralized entity to freeze you account or certain funds when they think there is irregularities surrounding that transaction.