
Largest Bitcoin mixer, Bitmixer.io, closes down - djoldman
https://bitcointalk.org/index.php?topic=2042470.0
======
omarforgotpwd
He probably made so much money that he said "Hey, why risk it by continuing to
run this business when I may someday face jail time. I know I am aiding
criminals". Smart move to shut it down on your terms and look like a good guy
rather than to continue profiting from criminal activity. Whatever your on
opinion the various issues at play here there is absolutely no doubt that
running this sort of service is extremely risky from a legal / political
standpoint.

I wonder if the shutdowns last week played any his decision? Maybe he saw a
large drop in volumes after the darknet markets were shut down and realized
those use cases were much larger than he imagined.

~~~
Jabanga
It's really harmful to the cause of privacy when people equate enablement of
privacy with criminality, as you're doing.

~~~
tptacek
You can't even sell _gift certificates_ on the Internet without having built a
business that will probably have criminals as a plurality constituency. The
idea that a Bitcoin mixer was most used for legitimate purposes is pretty hard
to swallow.

As a positive claim, rather than a normative one, it has to be possible to
observe that services like this have their great practical impact on
criminals. Making such a positive claim can't "hurt the cause of privacy". If
the cause of privacy wants to be taken seriously, it will need to grow up and
stop demanding that people accept false sets of facts.

~~~
bykovich2
If you run an online store that doesn't validate credit cards correctly you
_will_ become an API for fraudsters to check the validity of Visa numbers.

~~~
_-david-_
What is the proper way to validate credit cards?

~~~
throw238513
MaxMind's minFraud[0] was the most popular last time I checked. You give them
the credit card info, the IP of the user, their email etc[1] and $0.005 (per
credit card transaction you want them to check) and they tell you the
probability that it's fraud.

At my company we use Stripe as our payment processor, which has their own
fraud detection called Radar. But still, a bit under .1% of our transactions
are fraudulent.

Credit card fraud is honestly a great business, even if they know you're doing
it, the police wont do anything, and the merchant has to cover the cost and
pay $15 for the privilege of being defrauded.

[0] [https://www.maxmind.com/en/minfraud-
services](https://www.maxmind.com/en/minfraud-services)

[1]
[https://minfraud.readthedocs.io/en/latest/](https://minfraud.readthedocs.io/en/latest/)

Sorta related, turns out there are anti-fraud services for fraudsters
[https://krebsonsecurity.com/2013/11/anti-fraud-service-
for-f...](https://krebsonsecurity.com/2013/11/anti-fraud-service-for-
fraudsters/)

~~~
column
isn't this the kind of service that will flag a legitimate user behind a VPN
as a potential threat because his ip has been used in multiple transactions?
Should a user switch off his VPN to do shopping?

~~~
GuB-42
If that VPN IP range is known to be used by fraudsters then yes, for good
reasons. And if your VPN is affordable and "privacy oriented" there is a very
good chance that a bunch of crooks are going to use it.

Professional VPNs are probably fine.

------
tpallarino
For those of you who don't understand how monetary privacy can be useful
outside of illegal activities, see this talk by Riccardo Spagni of Monero:
[https://youtu.be/pTgadb7M47E?t=58s](https://youtu.be/pTgadb7M47E?t=58s)

~~~
dingo_bat
I just posted a comment saying "I don't see a single use for Bitcoin other
than illegal activities." Will be watching the video.

~~~
_nedR
>"I don't see a single use for Bitcoin other than illegal activities."

A decentralised currency for world trade that doesn't allow an arbitrarily
chosen country to profit by simply printing notes and skimming off the top?

A payment system that doesn't pick an arbitrary corporation to rake in all the
profits by nickel-and-diming every transaction in an economy?

~~~
simias
That's one side of the coin. I can spin it the other way: bitcoin is a
currency that can't be regulated or seized by democratic governments and
justice bodies. The entire point of the Bitcoin design is to evade all
regulations, the ultimate free market. In many places (in particular in
America and the EU) what you call an "arbitrarily chosen country" is
effectively a "democratically elected government". It's not perfect of course,
there's corruption, there's lobbies but at least there's some amount of
accountability.

It's also a currency where 75% of all possible coins are currently in
circulation and in the hands of a tiny amount of people who are bound to
become the new one-percenters (if not 0.01%) if it truly becomes the "world
trade currency". With the added benefit to be almost impossible to trace and
therefore to tax if the holder is even a little be clever.

I'm not saying that it's all white or all black but I'm a bit tired of the
cynical libertarian cryptocurrency kool aid. "The current system is flawed,
let's break everything and see what happens". And let's make a quick million
while we're at it, a new sucker is born every minute.

~~~
zzzcpan
But if there is no accountability or regulations the new one-percenters can't
become as powerful as the old one-percenters, that rely on the authority of
"democratically elected governments".

~~~
simias
You'll have to give me a more detailed case for that. If we make money harder
to tax and regulate the very rich will become less powerful? Won't that just
make it even easier to concentrate riches?

Given how easy it seems to evade taxes nowadays when you're super rich I can't
imagine how it'd be when anybody can basically generate a new untraceable
wallet for any transaction. Corruption will never have been so lucrative.

------
dvcc
"Despite the huge profit we earn, we are closing our activity. [...] But we
never had any government or legal pressure [...]"

Sure? I think most would find this hard to believe. That was such an odd way
to start the announcement.

~~~
nerdponx
_Hi all! Despite the huge profit we earn, we are closing our activity. Let me
explain why.

I'm bitcoin enthusiast since 2011. When we started this service I was
convinced that any Bitcoin user has a natural right to privacy. I was totally
wrong. Now I grasped that Bitcoin is transparent non-anonymous system by
design. Blockchain is a great open book. I believe that Bitcoin will have a
great future without dark market transactions. You may use Dash or Zerocoin if
you want to buy some weed. Not Bitcoin.

I hope our decision will help to make Bitcoin ecosystem more clean and
transparent. I hope our competitors will hear our message and will close their
services too. Very soon this kind of activity will be considered as illegal in
most of countries.

Cheers, Bitmixer.IO_

If you take what he says at face value, it's that he's no longer interested in
supporting Bitcoin because it didn't live up to his privacy expectations.

Edit: commenters below are right and I was wrong. He's really saying that he
no longer feels like the Bitmixer service is needed because he no longer
believes that Bitcoin should be anonymous.

~~~
Casseres
> You may use Dash or Zerocoin if you want to buy some weed. Not Bitcoin.

Sounds like when TrueCrypt shut down and they recommended Microsoft's
BitLocker.

~~~
Frogolocalypse
The story of truecrypt and Paul Le Roux is one of the, if not the, most
fascinating stories in technology there has ever been.

[https://magazine.atavist.com/the-
mastermind](https://magazine.atavist.com/the-mastermind)

~~~
Casseres
That's crazy. I imagine that's not the only crazy thing going on around us
that most of us will never know about unless it's published in a magazine. And
for every story that's uncovered, there's probably many more that will never
be. Just imagine all the drug networks and such that must be operating in the
United States, and to think that's in a developed country - what about all the
lesser developed countries? There's crime everywhere that most of us will
never see.

It's unfortunate that such crime exists, and it's also fascinating that we can
operate as a civilization with such crime going on. It's also unfortunate that
such criminals will most likely adopt cryptocurrencies. Criminals are
innovative, but that doesn't mean all innovations come from criminals or are
used for criminal activities. Just like criminals use cash; that doesn't mean
all cash is used for crime, and if criminals use cryptocurrencies, that
doesn't mean all cryptocurrency is used for crime.

I suppose that's a conundrum that crypto creators face: knowing that criminals
will use your work to protect their criminal activities. For some people,
something should be avoided if it allows for even one single instance of the
smallest crime. Other people understand that if you want something good, you
have to accept that some people will use it for evil. Like the First and
Second Amendments of the US Constitution; Free Speech and the right to bear
arms can both be used for good and bad.

Thank you for sharing the link, that was a very interesting read.

------
icelancer
Owner says: "Bitcoin has no future with drug/weapon traffic or any other
illegal activity."

Cash and gold trade has done well for thousands of years. As another commenter
put it:

"If you truly believe in bitcoin as a currency then it should be used to buy
anything and everything good or bad."

The most likely explanation is government pressure coming from side channels,
but nothing specific. Likely has a warning shot fired across his bow and he's
getting out of it with these idealistic words as his message.

~~~
s73ver
That doesn’t mean he has to work to make it easier to be used for those
things, though.

------
joosters
I don't see how these bitcoin laundering services worked. Since it costs money
to use a bitcoin tumbler, it's slow, and there's a non-zero chance that the
operator will simply steal your money, there is very little reason to use a
coin tumbler unless you're trying to hide the proceeds of crime.

In which case, you are just mixing your coins with other criminals, as there's
going to be very little 'clean' money going into the mix. So your coins that
were 'tainted' by buying weed online are now possibly associated with arms
dealing, fraud, child porn or any number of serious crimes. Doesn't seem like
a great benefit.

~~~
MichaelGG
There's a non-zero chance, but if enough people are using a service, it's
probably OK. And you can just put a bit through at a time, so you never risk a
ton. The fees are 1-3%.

It provides privacy. Why should Coinbase be able to see where my money went?

As far as clean, if a criminal is cleaning their own money but gets other
"dirty" coins, that's fine, since they're not connected to any crimes they
committed. Plus, presumably, the other dirty coins will be spread over so many
users that it just does not provide a real return on investment for LE to
follow.

------
tuxxy
I've never understood the focus on explicit services for Bitcoin mixing. I
made a comment on a different post a while ago and I'll paste it below:

You're implying that mixers and tumblers are ONLY dedicated malicious
services.

What you're forgetting is that hot wallets used on popular bitcoin services
also serve as tumblers. The distinction between a "malicious tumbler" and a
service's hot wallet is just the dedicated use.

For example, if a bitcoin shopping site had a wallet you deposited coins into,
you'll be recording that you have <number> of coins and they will show that.
Your coins will be mixed with their hot wallet and who knows how long they
keep them in there.

If you wait a few days and withdraw, chances are that most (if any) are NOT
your original coins.

Not to mention, if you blacklisted these coins, then users who receive these
coins wouldn't be able to legitimately use them.

TL;DR: Tumbling services are just dedicated to tumbling bitcoins. Most semi-
large bitcoin services with hot wallets inadvertently tumble their user's
bitcoins.

~~~
mahyarm
What other pooled wallet service doesn't keep records on purpose or has no
need to? Gambling?

~~~
user5994461
To have worked in Gambling, it is heavily regulated.

To be allowed to operate in X country, we had to specifically store a replica
of customers accounts in their jurisdiction, so that all servers and data
could be seized by the local law enforcement should the need arise.

The stories goes that these requirements raised after some shady gambling
companies left with all their customer funds.

~~~
mahyarm
So how do those offshore online gambling companies work then? Do they all have
KYC type records or are there some places where they don't?

~~~
wolco
Years ago when I worked for this type of company we moved our prod game
servers to Indian reserves in Canada. That was very costly, later moved to
Costa Rica.

------
amalcon
I've never understood the purpose of Bitcoin mixers. The use-case seems to be
half-assed money laundering. You're concealing the source of money[1], without
bothering to invent a plausible alternate source. It's at best like a petty
criminal who "launders" his money by simply claiming to have found it.

[1]-Poorly at that -- do we really think the people who catch launderers of
actual money will be stymied by the transaction log of your average tumbler?
It makes way more sense to launder money by renting BTC mining hardware and
electricity from someone who doesn't care where the money came from, taking a
loss but effectively trading your "tainted" BTC for brand-new BTC.

~~~
fiatjaf
It's not money laundering, it's vanishing with the traces of to where went
that amount of money someone could be tracking.

That kind of service is not needed if you're dealing with cash.

Money laundering, if you need that, is a different step that must be taken
after the "mix".

~~~
amalcon
That step is needed if you're dealing with paper assets like wire transfers
and real estate. It is considered money laundering in those cases, and they
catch people doing that with some regularity.

------
csomar
This reads to me like someone writing while a gun is pointed to his head.

It makes absolutely no sense, and it doesn't feel natural.

My guess is that they have been chased by some government agencies and now
they are closing down and putting this message to show good faith.

~~~
cakedoggie
It sounds to me like someone who was poor and believed in privacy, and is now
rich and does not. It is funny how conservative you can become when you get a
lot of money.

------
loader
So it makes them huge profits but they simply don't want to keep it going?
Time for someone to step in and take their profits.

~~~
aphextron
Yeah, who would have guessed that money laundering could be profitable?

------
contingencies
Theory: Operator (who seems European) was also purchasing/selling in quantity
on Hansa. Given the amount of information gathered by the Dutch Police, it's
possibly a risk-based decision by the operator to clean house.

------
santiagobasulto
It's funny because a bunch of people in a forum are saying that: "People are
free to use whatever coin for whatever they want" and "people do have the
right to enjoy..." but it's "stupid/crazy" that they're shutting down. Seems
like "freedom" is selective.

------
qrbLPHiKpiux
Warrant canary?

------
ikeboy
Well, at least they aren't exit scamming ...

------
cflynnus
To anyone reading this, I wouldn't infer that privacy and fungibility in
Bitcoin are not improving. The recent activation of segwit enables practical
lightning networks, which do provide a layer of privacy, and also makes it
easier to add a feature called schnorr signatures.

Schnorr signatures will lead to something dubbed by some as "incentivized
privacy". [https://bitcoinmagazine.com/articles/the-power-of-schnorr-
th...](https://bitcoinmagazine.com/articles/the-power-of-schnorr-the-
signature-algorithm-to-increase-bitcoin-s-scale-and-privacy-1460642496/)

------
fiatjaf
The declarations make no sense: "Bitcoin is not anonymous, so I'll shut down
the service I was running to help people overcome this non-anonymity, which I
created for this exact goal."

Where is the new information? Every reason he is giving was already there and
already clear at the beginning.

------
omusa
Let's hope that other services stay up and running. FoxMixer.com has been the
mixing service that I used so far. Had no issues, but who knows if they
continue operation or if they also shutdown. I don't hope so.

------
pier25
You can simply use SatoshiDice or any other gambling site to mix small
quantities.

~~~
MichaelGG
Doesn't SatoshiDice send back your win to the same address (chaining off the
previous output, so they can do it immediately)? Or has it changed?

~~~
pier25
I haven't used it in a while, but last time I did you could use a different
address.

~~~
kobeya
Dice gambling services provide zero mixing.

------
jason_slack
Is there still a market for a mixer/tumbler now? I think there are still
plenty of ideas out there, that haven't been done, to help ensure anonimity.

------
gimili
Could this simply be related to the 1st of August potential bitcoin fork?
Something like cashing out, before all the bc of the mixing service are
worthless?

------
oron
Why do you need this kind of service? how is it different than selling your
BTC on a major exchange, than immediately buying the same amount seconds
after?

~~~
jstanley
The exchange most likely has KYC/AML information, so could be coerced into
helping to trace your money.

------
mirimir
So it goes. We still have Bitcoin Fog and Helix, so whatever.

------
Frogolocalypse
It is trivial in todays market to do this anyway, if you were so inclined.
shapeshift.io allows you to exchange a crypto for some other crypto, and it
doesn't even require a login. Peer-to-peer across blockchains. When lightning
is deployed trivial will become less than mundane.

Pop! The genie is seriously out of the bottle. If you don't know about how
these things work, you should probably take some time to at least start to
understand it.

~~~
aladinmix
Why would people need mixers if you can use shapeshift and monero ? Monero is
anonymous, it solves the problem i guess

