The law has a variety of "know your customer" rules, but in addition has a bunch of laws the constrain your behavior if you can reasonably know that you are handling criminal proceeds.
Anyone operating a crypto mixer knows that people will endeavor to use it to illegally launder funds, and to as I understand it if you know that, you have to implement _effective_ methods to prevent that illegal mixing. It does not matter that there are legal transfers, you have a legal duty to not carry the illegal ones, and if you are not actively trying to prevent those illegal transfers you are liable.
A more day-to-day analogy would be that it is illegal to knowingly buy, sell, or accept stolen property. If you do buy stolen property but there's no reason for you to have thought it is stolen you haven't done anything wrong (though the purchase or sale is invalid, so you've lost the money). If however police can show that you knew or could reasonably know the property was stolen it they could chose to charge you with a crime, and your defense would presumably be some variation of why it was reasonable for you to believe the property was not stolen.
The problem is specifically that everyone running a mixer knows that people attempt to launder their funds through mixers, and so therefore should have mechanisms in place to ensure that they are not accepting transfers that can reasonably related to criminal enterprises, just as you would have to when buying/selling property in the real world. Given that most crypto is trivially auditable there are very few arguments that would support not having at minimum automated rejection of transactions involving any known wallet, and moreover constantly updating the list of known bad addresses.
Certainly if I were on a jury, and the person running the mixer could not show their reasonable actions to prevent laundering, that the system was constantly tracking, updating, and expanding the disallowed wallets precisely because that can be done almost entirely automatically, that would count against their claims to not be intentionally supporting laundering.
Again, the issue here is not running the mixer, it's not that occasional illegal transactions go through - that's unavoidable - it's the failure to take reasonable steps to stop plausibly illegal transfers. The way banks handle this is they block suspicious transactions pending receipt of the actual sender and recipient, and documentation of the origins of the funds. Which is what a mixer would need to do.
Anyone operating a crypto mixer knows that people will endeavor to use it to illegally launder funds, and to as I understand it if you know that, you have to implement _effective_ methods to prevent that illegal mixing. It does not matter that there are legal transfers, you have a legal duty to not carry the illegal ones, and if you are not actively trying to prevent those illegal transfers you are liable.
A more day-to-day analogy would be that it is illegal to knowingly buy, sell, or accept stolen property. If you do buy stolen property but there's no reason for you to have thought it is stolen you haven't done anything wrong (though the purchase or sale is invalid, so you've lost the money). If however police can show that you knew or could reasonably know the property was stolen it they could chose to charge you with a crime, and your defense would presumably be some variation of why it was reasonable for you to believe the property was not stolen.
The problem is specifically that everyone running a mixer knows that people attempt to launder their funds through mixers, and so therefore should have mechanisms in place to ensure that they are not accepting transfers that can reasonably related to criminal enterprises, just as you would have to when buying/selling property in the real world. Given that most crypto is trivially auditable there are very few arguments that would support not having at minimum automated rejection of transactions involving any known wallet, and moreover constantly updating the list of known bad addresses.
Certainly if I were on a jury, and the person running the mixer could not show their reasonable actions to prevent laundering, that the system was constantly tracking, updating, and expanding the disallowed wallets precisely because that can be done almost entirely automatically, that would count against their claims to not be intentionally supporting laundering.
Again, the issue here is not running the mixer, it's not that occasional illegal transactions go through - that's unavoidable - it's the failure to take reasonable steps to stop plausibly illegal transfers. The way banks handle this is they block suspicious transactions pending receipt of the actual sender and recipient, and documentation of the origins of the funds. Which is what a mixer would need to do.