Mixing service: Difference between revisions

Revision as of 14:56, 14 July 2015

Prior to the advent of trustless alternatives, mixing services (also called tumblers) were used to mix one's funds with other people's money, intending to confuse the trail back to the funds' original source. In traditional financial systems, the equivalent would be moving funds through banks located in countries with strict bank-secrecy laws, such as the Cayman Islands, the Bahamas and Panama.

When mixing bitcoins, you send your money to an anonymous service and, if they are well-intentioned, they will send you someone else's tainted coins. So, now, whatever those coins were used for may now be traceable back to you. Additionally, mixing large amounts of money may be illegal, being in violation of anti-structuring laws.

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-A mixing service can be used to mix one's funds with others', with the intention of confusing the trail back to the funds' original source. In traditional financial systems, the equivalent would be moving funds through banks located in countries with strict bank-secrecy laws, such as the Cayman Islands, the Bahamas and Panama<ref>[http://en.wikipedia.org/wiki/Offshore_bank Offshore bank]</ref>.
+Prior to the advent of trustless alternatives, '''mixing services''' (also called '''tumblers''') were used to mix one's funds with other people's money, intending to confuse the trail back to the funds' original source. In traditional financial systems, the equivalent would be moving funds through [[Wikipedia:Offshore bank|banks located in countries with strict bank-secrecy laws]], such as the Cayman Islands, the Bahamas and Panama.
-Mixing helps protect privacy, but can also be used for money laundering - mixing illegally obtained funds. After laundering, the funds appear legitimate<ref>[http://en.wikipedia.org/wiki/Money_laundering Money laundering]</ref>. Mixing large amounts of money may be illegal, being in violation of [[Wikipedia:Structuring|anti-structuring laws]].
+When mixing bitcoins, you send your money to an anonymous service and, if they are well-intentioned, they will send you someone else's tainted coins. So, now, whatever those coins were used for may now be traceable back to you. Additionally, mixing large amounts of money may be illegal, being in violation of [[Wikipedia:Structuring|anti-structuring laws]].
-There has been at least one incident where a Bitcoin exchange has blacklisted "tainted" deposits descending from stolen bitcoins<ref>[http://bitcointalk.org/index.php?topic=73385.0 Mt Gox thinks it's the Fed. Freezes acc based on "tainted" coins.]</ref>. Manual or lightly automated mixing methods can make detection of taint more difficult unless the exchange follows the trail<ref>[http://bitcointalk.org/index.php?topic=79079.0 Blockchain-based betting services function as mixing services?]</ref>, but this approach does protect privacy like a true mixing service would.
-<span style="color:red">Caution: Mixing services may themselves be operating with anonymity.  As such, if the mixing output fails to be delivered or access to funds is denied there is no recourse.  Use at your own discretion.</span>
 ==See Also==
 * [[Anonymity]]
-* [[:Category:Mixing Services|Mixing services]]
+* [[:Category:Mixing Services]]
 * [http://www.bitcoin.org/smf/index.php?topic=2893.0 RFC: Bitcoin Mixnet]
-==References==
+{{wp|Cryptocurrency tumbler}}
-<references />
 [[Category:Financial]]
 [[Category:Anonymity]]

Mixing service: Difference between revisions

Revision as of 14:56, 14 July 2015

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