US pivots on crypto mixers, highlighting valid privacy application

[asriloni]

US is basically trying to play in both sides. So they tries to acknowledge the need of privacy for individual while they're also wanna control it by themselves through banning any suspicious activity.

The worst part is that regulator is still able to freeze your asset without telling you why. This is the reason i don't think regulators are doing pivot here.

It's more like they are keen to control both of sides at the same time. It's just a classic move they is keen to control everything.

[hero_the_bossman]

US is basically trying to play in both sides. So they tries to acknowledge the need of privacy for individual while they're also wanna control it by themselves through banning any suspicious activity.

The worst part is that regulator is still able to freeze your asset without telling you why. This is the reason i don't think regulators are doing pivot here.

It's more like they are keen to control both of sides at the same time. It's just a classic move they is keen to control everything.

"You play with crypto as long as you want and as long as it's done in our rules",, basically

[Satofan44]

Privacy from whom? If you are trying to hide something from everyone else except your government, then a government-KYC-mandated mixer is exactly the thing that you should use.

I wonder if that's even possible. With how many database leaks and other problems the government has, do people still trust them? If we're talking about my government, I certainly don't want to report everything to them because there are indicators that they want to increase their power and abuse the law in one way or another.

Most of the leaks come from private companies, not from governments. But good try though. The likelihood that a government mandated KYC mixer from the US has better data protection and retention systems is much higher than some company that is registered in Curacao and offering no logs mixing. 

Especially if they force people to pay taxes on unrealized gains blindly, with no clear criteria.

This news about mixers and the topic is related only to the US, this is not related to EU or other shitholes that have proposal for such things. There is never going to be an unrealized gains tax in the US, so this argument is misplaced for this topic. Should the EU or other places do something similar then it could become relevant.

The worst part is that regulator is still able to freeze your asset without telling you why. This is the reason i don't think regulators are doing pivot here. 

The worst part is that an official government platform can freeze your assets and now you have legal recourse to do something about it, it is much worse than anonymous mixers ran by anonymous people that can seize your funds or exit scam completely at any time. Yes, definitely the worst part! 

[Abiky]

It does not necessarily do that, these claims should not be made in such a general way when they are bound to be incorrect. Privacy from whom? If you are trying to hide something from everyone else except your government, then a government-KYC-mandated mixer is exactly the thing that you should use. It will accomplish what the user desired to do and make the tracking and reporting of your coins pretty easy. If the goal is to hide the coins from everyone, including the government, then the KYC thing becomes an issue. However, those two are entirely separate use cases with entirely separate user bases (and some overlap). Obviously neither Coinbase nor IRS are going to accept my claims that I just got random coins out of nowhere from a no-KYC mixer.

Privacy from everyone, especially "Big Brother" (the deep state). I know centralized exchanges such as Coinbase or even the tax agency won't accept random coins out of a non-KYC mixer. But won't know anything if you don't say anything. In the worse case, you can just give an excuse that the coins received were a donation or a "gift" from someone else.

For the paranoid, mixing your BTC and selling it on a P2P trading platform or DEX would be best. I understand that the Trump administration is pro-crypto, so maybe the US will go easy on mixers this time? Americans will be "safe" during the remainder of Trump's term. We'll see what happens...

[Lucius]

~snip~
For the paranoid, mixing your BTC and selling it on a P2P trading platform or DEX would be best. I understand that the Trump administration is pro-crypto, so maybe the US will go easy on mixers this time? Americans will be "safe" during the remainder of Trump's term. We'll see what happens...

That's just an illusion, who can feel safe in that country today, considering everything that's happened in just over a year since the Trumpists came to power? Today you can do something completely freely, tomorrow you could end up in prison for the same thing. Mixers are still a target, and any such service found to have received coins resulting from a significant hack will be seized if at all possible.

Besides, who can say with certainty that it is not possible to successfully break every mix, this has been proven in the past by one user here on the forum. I have no doubt that "they" have much better resources for such things.

[BlackHatCoiner]

I don't think we should ever take similar legislation seriously. In fact, I'd argue that if it seems too good to be true, it's perhaps because it is. I would give high probability that if the US government allowed some mixers to be "legal" and provided mixing services without KYC, it'd be a matter of time until one of those mixers was blackmailed into a honeypot.

Just use coinjoin and stop asking for permission.

[NotATether]

I don't think we should ever take similar legislation seriously. In fact, I'd argue that if it seems too good to be true, it's perhaps because it is. I would give high probability that if the US government allowed some mixers to be "legal" and provided mixing services without KYC, it'd be a matter of time until one of those mixers was blackmailed into a honeypot.

Just use coinjoin and stop asking for permission.

That, or, design open-source protocols for mixers with parameters for people to put 'clean coins' inside. And then only use those instead of closed-source variants.

Current CoinJoin is very private and secure, it's a shame that they're easily identified and largely blacklisted by the analysis firms.

[BlackHatCoiner]

That, or, design open-source protocols for mixers with parameters for people to put 'clean coins' inside. And then only use those instead of closed-source variants.

This is never going to happen. The reason is simple: if the protocol is open-source, then chain analysis companies (that have given birth to the "taint" concept) will consider those "clean coins" as tainted, and you're back at square one. It's just counter-intuitive. The only way to win in the cat-and-mouse game of "cleaning" your coins is to stop playing.

Current CoinJoin is very private and secure, it's a shame that they're easily identified and largely blacklisted by the analysis firms.

Looking at a different angle: being easily identified and still largely blacklisted means coinjoin is very effective.

[legiteum]

~snip~
For the paranoid, mixing your BTC and selling it on a P2P trading platform or DEX would be best. I understand that the Trump administration is pro-crypto, so maybe the US will go easy on mixers this time? Americans will be "safe" during the remainder of Trump's term. We'll see what happens...

That's just an illusion, who can feel safe in that country today, considering everything that's happened in just over a year since the Trumpists came to power? Today you can do something completely freely, tomorrow you could end up in prison for the same thing. Mixers are still a target, and any such service found to have received coins resulting from a significant hack will be seized if at all possible.

Besides, who can say with certainty that it is not possible to successfully break every mix, this has been proven in the past by one user here on the forum. I have no doubt that "they" have much better resources for such things.

It's perfectly safe for Trump, his family, and his big donors. Everybody else should follow the written laws very carefully.

[Webetcoins]

From what I understand (and I could be wrong) as long as you let the government know, you can hide it from others.

As in, government of course has to know, a government will not go out and tell you "you can hide your money from us if you want to", they need to know, but if you do let them know, then you can keep on hiding from others.

This way your money will not be known by anyone else, nobody will know where your money is, only the IRS or SEC will know what's going on with it.

[legiteum]

From what I understand (and I could be wrong) as long as you let the government know, you can hide it from others.

As in, government of course has to know, a government will not go out and tell you "you can hide your money from us if you want to", they need to know, but if you do let them know, then you can keep on hiding from others.

This way your money will not be known by anyone else, nobody will know where your money is, only the IRS or SEC will know what's going on with it.

In the US at least, you don't need to actively let the government know about your holdings unless you realize a profit from them.

KYC is used to keep a database of holders in case the government has a target that they want to investigate. As such, your data isn't exposed to the government unless they specifically ask for yours specifically.

[FinneysTrueVision]

From what I understand (and I could be wrong) as long as you let the government know, you can hide it from others.

As in, government of course has to know, a government will not go out and tell you "you can hide your money from us if you want to", they need to know, but if you do let them know, then you can keep on hiding from others.

This way your money will not be known by anyone else, nobody will know where your money is, only the IRS or SEC will know what's going on with it.

If you cannot use crypto in a truly independent way without government interference, you might as well just use traditional banking. There isn’t any real benefit to using centralized mixers once they’ve decided to start enforcing traditional AML requirements. And it won’t stop with centralized mixers; the Samourai developers are currently in prison because they didn’t have a license to operate a money transmitting business.

They might tell you they are trying to fight money laundering, but the real purpose is to take away your right to privacy. If they can make non-custodial services illegal, it won’t be too long before some insane politician tries to ban self custody altogether.

[m2017]

As per their report to Congress this month, the secretary of Treasury identify the threats such as North Korea, ransomware actors, sanction evaders and others. However, they also mentioned that Mixers, that there are individuals who use it to protect their financial privacy as we don't like to be followed in blockchain. Does this signal that we might see US shift on their policy with regards to crypto mixer?

Do certain members of Congress want to leave a loophole for themselves so they can use mixers and hide assets and transactions (perhaps to fund dubious events or dubious sources of income) from outsiders (the general public)?

The story is as old as the world: laws are rewritten to suit a certain group of people.

So, from their point of view, mixers were evil yesterday, but will become good in the future?

I don’t think we should start rejoicing prematurely and it’s better to wait for the real results, which, by the way, may turn out to be less pleasant than our expectations.

[Alpen]

There are plenty of ways the government can allow mixers to be use legally and reduce abusive behaviors but they will go for the option that will discourage people from using it.

I honestly can’t imagine how you could ever make crypto mixers 'legal.' It’s like trying to legalize Monero transactions—it defeats the point in the eyes of regulators. Then again, after the US Treasury claimed that lifting sanctions on Iranian oil actually helps win the war against Iran, nothing surprises me anymore. Logic has clearly left the building.

[Alpen]

Enough with these pathethic conspiracy theories due to your uncontrollable envy of Trump and his family. They do not need mixers to do anything, they can use Monero easily. Therefore the dumb conspiracy is moot and has no relevance to this.

Just as easily as they defeated Iran?

[Alpen]

This move by the Treasury shows the presence of human errors which can't be ignored because individuals make the move to suggest to the government how this would be beneficial and then see how removing mixers exposes them to wrench attacks and make them targets by corrupt government officials.
I really don't know what to say besides that this is a shift from obstruction to oversight. This is a conditional shift that says that mixers are important and instead of banning them, better policies and credentials should be created and used to facilitate the efficiency of the application of mixers.

Think about this: Why did mixers even appear? Because crypto lost its most vital feature—privacy. My question is for the developers: why are they sitting on their hands? They were supposed to uphold the original vision of anonymity at all costs.

The truth is, most users clearly don't care about privacy. If they did, centralized coins like USDT, BNB, and XRP wouldn't be dominating the market. It’s logical to conclude that mixers aren't for the average person. But for some reason, the White House needs them. And North Korea, obviously

[Alpha Marine]

That's just an illusion, who can feel safe in that country today, considering everything that's happened in just over a year since the Trumpists came to power? Today you can do something completely freely, tomorrow you could end up in prison for the same thing. Mixers are still a target, and any such service found to have received coins resulting from a significant hack will be seized if at all possible.

And this kind of instability is bad for business. It makes things uncertain. People never really know which to do and which to avoid. This can keep people from entering the business entirely. In my country, for example, one moment the government acts like it's pro-crypto, the next it sends a memo to banks to freeze every account that has anything to do with Bitcoin or crypto. This limits the adoption. Even businesses that could have accepted Bitcoin as a payment won't accept it anymore. Nobody likes instability and uncertainty in business.
The US is in a similar situation right now. You can't really tell what the government is planning or what they mean when they say something, or if they even mean it.

[Lucius]

~snip~
Besides, who can say with certainty that it is not possible to successfully break every mix, this has been proven in the past by one user here on the forum. I have no doubt that "they" have much better resources for such things.

It's perfectly safe for Trump, his family, and his big donors. Everybody else should follow the written laws very carefully.

That's right, the laws are not the same for everyone, because if they were, the president, his wife, and half of his family would be under investigation for their crypto dealings, which have resulted in financial losses for many.

And this kind of instability is bad for business. It makes things uncertain. People never really know which to do and which to avoid. This can keep people from entering the business entirely.
~snip~

We all feel it on our skin today, and it seems like it will get worse every day. People who play trade and real wars without thinking about the consequences will create chaos that has not been seen for a long time, and then they will ask for Nobel prizes for peace and economics.

[Alex077]

Honestly, what really caught my attention in the Treasury report wasn’t the usual “mixers are bad” narrative, but the fact that they openly acknowledge that mixers actually have legitimate use cases.
“Lawful users of digital assets may leverage mixers to enable financial privacy…”
For a long time, the narrative was pretty simple: mixers = crime. In the short term, I don’t think this is anything good for mixer platforms - regulation will likely get tighter.
But in the long run, it actually strengthens the argument that these tools can be legitimate when it comes to privacy.

[davis196]

As consumers increase their use of digital assets for payments, individuals may want to use mixers to maintain more privacy of their consumer spending habits.

This quote sounds ridiculous to me. More people are going to use BTC to purchase goods and services, which means that they would want to use BTC mixers to "maintain privacy" over their "spending habits"? The guy, who wrote this report probably knows very little about Bitcoin.
The people simply don't want to use BTC for buying goods and services. Period. This means that BTC mixers won't be used by anyone to hide his "spending habits". Bitcoin mixers are being used to hide the origin of Bitcoins, that were obtained via illegal activities. I don't believe that the US authorities would ever impose more liberal laws and regulations in regards to Bitcoin mixers.