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Comment by ridgered4 | Hacker News Reader

Maybe I'm missing something but since bitcoin is a public ledger and exchanges all have KYC features it seems worse than buying visa gift cards with cash from a privacy perspective. I don't know that much about the crypto space honestly, but it didn't seem to make sense to me it was the go-to currency for criminal transactions.

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You can use mixers and the like to obfuscate the address that hits the exchanges from the address that is used for crime. When properly executed the strategy is foolproof unless the mixer you use is a honeypot. The issue is that there's a goodchance all the mixers are honeypots and properly executing the strategy requires an amount of vigilance that is beyond most organized crime groups.

> can use mixers

This is automatic acceleration of probable cause. If you’re a state-level actor, mixers are fine. (You have a state behind you.) If you’re just having fun, go for it—it’s neat conceptually. For anyone less, take a lesson from the cartels.

There's no way to prove you were the one to use the mixer vs just buying the coins from someone else who did.

Are you confident enough in that assertion to launder a few million in drug money?

It reduces the pool of potential suspects to a small enough list that Secret Service agents could visit each in person.

The minute your address interacts as a counterparty to a known mixer you're automatically flagged and everything around your risk profile accelerates dramatically. That wallet is effectively burned and you'll be locked out of using any kind of reputable exchange.

Obviously you don’t go directly from the mixed wallet to the exchange. Send some of the coins to different wallets a few times and say you bought the coins with cash from someone you met once. Or, if you’re willing to go the extra mile use that wallet to buy an NFT and the NFT wallet can use the exchange.

The mixer may obfuscate what happens inside it but unless it's a coin like zCash or something it's impossible to obfuscate that your coins interacted with the mixer. The ledger is cryptographically verifiable and completely public. A mobsters cooked books offer more protection than a blockchain from that and good forensic accounts untangle those all the time. A blockchain just makes it easier to automate the untangling.

Throw in the fact that it's grey territory legally just using the mixer and I think most people are vastly understating the risks of using a mixer even if they did nothing wrong with the money otherwise.

It’s not illegal to have coins that at some point in the past were mixed. In fact I suspect that most bitcoins can be traced back to a mixer if you go back.

Might not be illegal, but you’ll never be able to cash out.

>you’ll never be able to cash out

P2P dexs dont care about mixer usage, you can always find a way to cashout if you have the private keys.

Perhaps, but as regulators step up it’s going to devalue things once people know coins from tainted chains are going to be harder to resell. That’s going to further increase the risk of using mixers since the people using them for ideological reasons are going to scale back their usage as it starts costing them money & adding risk.

Mixers are going to be fun for the IRS.

All that money sloshing around and untaxed.

Bitcoin's advantage is worked online for people who are banned from normal online payment mechanisms.

There are other privacy oriented coins that may do better than bitcoin for avoiding tracing (monero?) but the main reason criminals used it is it worked and nobody really cared about drugs, etc.

Nowadays monero (XMR) is the go-to since addresses aren't reused and transactions are encrypted.

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