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is this really illegal? couldn’t you use a mixer for perfectly legal reasons? like say hiding money from your friends? why should he be liable for why people choose to use the service

Using it isn't (although it will raise suspicion). Operating one is, as it involves what the US calls "money transmission", which is a licensed, heavily regulated business.

This person is accused of transmitting money without a license. It's the same charge that would be brought if you were hosting a custodial wallet that permits deposits and withdrawals, and didn't have a money transmitter license and comply with the regulations that apply (such as knowing and storing the ID of all of your customers, and making sure they're not on OFAC's lists of banned countries or banned persons). The mixing doesn't actually enter in to it.

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