Crypto mixing, also known as cryptoacrobacy, is the process of anonymizing user tokens. A person essentially mixes his cryptocurrency with the cryptocurrencies of other people in the pool. The origin of the tokens remains unknown.
Case studies: real-world examples of successful crypto mixing
Cryptomeshalki, also known as cryptomeshalki services, offer the principle of anonymity in the crypto community, hiding the source of token funds. Using bitcoin by itself allows you to transfer it anonymously, however, there is a public registry where anyone can view any BTC transaction. Therefore, for those who wish complete anonymity, a solution is required. This is why crypto mixers are also known as crypto mixer services or crypto acrobatics.
The principle of operation is that users put their cryptocurrency into the pool, and then the pool randomly mixes it with other cryptocurrencies, and then returns the coins to the user, allowing him to get back another cryptocurrency for the same amount that he deposited, minus the platform commission. It is important to note that there are two types of services for mixing cryptocurrencies: centralized and decentralized. Centralized services do not conduct transactions and do not disclose them, but store records of user transactions on their servers. An example of a centralized service is blender.io . On the other hand, decentralized crypto mixers, such as JoinMarket, use anonymization protocols to completely hide the source of the cryptocurrency.
However, it is important to note that some crypto mixers may be illegal or violate laws prohibiting structuring. Recent events, such as the investigation into the Tornado Cash service, indicate that government agencies are strengthening control over such platforms. Some services, such as Tornado Cash, have been sanctioned by the Office of Foreign Assets Control of the U.S. Treasury Department (OFAC) due to their use for laundering funds belonging to criminal organizations.
Is crypto mixing the solution to privacy concerns in the digital age?
Most crypto mixers make a profit by charging transaction fees from the total volume of mixed coins. Sometimes such commissions may be higher in the case of using rare or specialized services.
Crypto mixers are widely used for money laundering, as they can hide the origin of cryptocurrencies. But, of course, this is not the only reason for using such services. Many cryptocurrency users also use them to ensure the privacy and anonymity of their funds. Some well-known cases, such as the use of the Bitcoin Fog service to launder stolen bitcoins, indicate the popularity and demand for crypto mixers.
However, you should always evaluate the legality and security of these services in order to avoid possible trouble with the financial authorities.
The main advantage of decentralized crypto mixing is increased anonymity. No transaction histories are recorded, and other smart contract participants cannot be tracked. However, such protocols are open, and anyone can check their code.
It should be noted that some crypto mixing can mix “dirty” cryptocurrencies, unknown to users, with “clean” assets. According to a Chainalysis study, approximately 11% of all mixing operations are related to illegal activities. This means that fraudsters can use such services to transfer illegal funds to ordinary users. As a result, crypto exchanges and other services can block the account and freeze all funds. Some companies, such as Tether, have the right to freeze user assets if they are associated with illegal activities or are located at authorized addresses. Similar rules are applied by other companies.