How Crypto Mixer, also known as Crypto Tumblr, is used to obscure the path of digital money
Introduced in the time of Al Capone, the term “money laundering” has since entered the general vocabulary because criminals are busy obscuring the source of their ill-gotten wealth and make it appear as if the funds came from legitimate activity.
As technology advances, so do the methods used by criminals to try to smuggle money into their criminal activities. This is where cryptocurrency and some specialized crypto services work because they are not just for people who choose to be anonymous for legitimate reasons, but also for those who want to remove their dirty currency and cover their tracks.
In fact, many people may think that using crypto like Bitcoin, still the most popular cryptocurrency, they can’t be found. Although this is a misconception. While it is true that tracing transactions to a crypto wallet or to an individual or an IP address is not always straightforward, it is not impossible.
Also, not all cryptos are born equal when it comes to privacy-enhancing possibilities. Some coins, such as Monero and Zcash, and wallets, sometimes known as “”Privacy WalletIt promises a higher level of anonymity to its users than other popular options
And yet, many Cyber criminals have been caught Thanks to the new strategies aimed at tracing the movement of cryptocurrencies along the blockchain. Also, in a high-profile case, the U.S. Department of Justice About 3 2.3 million was recovered Bitcoin is valued at 3 4.3 million in the colonial pipeline that fell victim to the Darkside ransomware after it was attacked in 2021.
Over the years, cybercriminals have begun to look for ways to keep their transactions (pseudo) identities secret and to smuggle cryptocurrencies out of their criminal activities. One such method relies on services known as cryptocurrency mixers or cryptocurrency tumblrs.
Crypto Mixer, aka Crypto Tumblr?
Crypto mixers are intended to combine multiple digital transactions with multiple users and to confuse your digital money with other users to obscure the source and destination of the crypto resource. These services are available not only in shady forums, but also on the Surface web Although there are many places where this type of practice is not illegal and the service is available to everyone, the providers offer it as a privacy enhancement rather than a crypto laundering option.
Tornado Cash, for example, is a blockchain Etherium mixer that has gained widespread popularity in recent years, especially among cybercriminals. Launched in 2019, the service is used to process millions of dollars a day, and was used by attack attackers on Crypto.com, among others, involving the withdrawal of approximately মিল 34 million, and was linked to Ronin, the blockchain network Axel Infinity game by attack attackers. .
What kind of crypto mixer service is there?
There are two main types of crypto mixers:
- Centralized Mixer: Users identify their e-wallet addresses on these platforms and send the amount of specific cryptocurrency they want to “mix” on the platform. This gives the user agent complete control over multiple transactions aimed at “merging” the cryptocurrencies. By agent, we mean a special algorithm that performs multiple transactions in a random fashion. io A concentrated mixer.
- Decentralized Mixer: In this case, the mixers try to avoid intermediaries. That way, users can band together and make small transactions between users of the same platform, select the cryptosets they want to “mix”. Of course, the higher the number of users in the pool, the greater the randomization. One of the most commonly used protocols for this type of service CoinJoin.
Centralized vs. Decentralized Mixer: Which is Better?
If we evaluate the efficiency that ensures greater anonymity, decentralized mixers become isolated. Why? Decentralized mixers offer a much higher level of anonymity than centralized mixers. This is because users of centralized mixers have access to IP addresses. This means that, to some extent, the address from which the cryptoset was sent, as well as the user receiving it, can be predicted. In addition, these platforms may be attacked as a result of which the platform reveals user data, concealing their privacy and identity; In this case, users could be potential victims of future attacks.
Also, decentralized mixers offer a key advantage over centralized ones: they give users complete control over their resources because, after the mixing process, they can check if the incoming quantity is equal to the amount mixed through the signature. By doing this, they prevent their cryptoassets from being snatched away during the mixing process.
Is crypto mixer illegal?
Although, as we have already mentioned, crypto mixers are not illegal, it will depend on the country and jurisdiction. Although cryptocurrency mixers offer benefits because they help ensure anonymity, the truth is that these services are used not only by people who want more anonymity, but also by cyber criminals. But what makes a crypto mixer somehow illegal?
In recent years, the cybercrime industry, especially the ransomware scene, has become increasingly active. With ransomware as a service (RaS), cyber criminals are making huge profits. Also, there are huge deals off the Dark Web, such as selling different types of malware, selling data from attacks against different companies, platforms and services.
A mixed picture?
Crypto mixers are not inherently illegal and can be used for legitimate reasons (although their use has become a bit of a red flag for the authorities). The problem usually arises when such services are used to evade control or to smuggle money for illegal activities, which is why they are increasingly regulatory checks and balances.
Indeed, crypto laundering occurs It’s getting harder and harder And law enforcement has been able to follow the path of illegally acquired digital money and even take action against them. Operation of crypto mixer.