The closest you can get to money laundering in the world of Bitcoin are the mixers (also called tumblers). Bitcoin mixers are services that are used to mix the funds of one person with those of others. The intention? To confuse the flow of that money and lose track of it.
Even in the open data world of cryptocurrencies, many users want to ensure their anonymity and, therefore, resort to the same thing that bankers have been doing for decades: sending their money to the Cayman Islands and the Bahamas so that it remains off the record.
|Name||Tor||Minimum Deposit||Fee||No Log Policy||Rating||Link|
|2||0.005 BTC||0.4% - 4%|
|4||0.001 - 50 BTC||1% to 5%|
|5||0.001 BTC||4-5% + 0.00015 BTC|
|6||0.001 BTC||0.5% to 2.5% +extra 0.00025 BTC|
|8||0.00200000 BTC||1 %|
|9||0.01BTC||1% to 5%|
|11||flat fee for an unlimited anonymity set.|
|12||0.001 BTC||0.5 % of your mix plus 0.0001 BTC|
|13||0.002 BTC||0.0 % service fee plus a 0.00002 BTC|
The Process- How Bitcoin Mixer Works?
When it comes to cryptocurrencies, there are individual variations like traditional money laundering. In the first place, money “does not go somewhere” but is agglomerated with the funds of others; it is crossed; it is changed. This is enough to make it difficult to trace, even through the blockchain.
In essence, when bitcoins are mixed in the Bitcoin mixers, the user is sending his money to an anonymous service that will then respond by sending him the same amount but composed of cryptocurrencies that belonged to other users. In this way, the coins of user A can be traced back to user B and the currencies of the latter can be traced back to user A. The number of users involved in the operation increases, and the result is that following the path to everyone’s money will become impossible.
Some History on Bitcoin Mixers
Now that we know the process, it won’t be strange to know that the Bitcoin mixers were widely used on sites like Silk Road, an online black market operated from the deep Internet, which can be accessed through Tor.
The market was closed in 2013, following the FBI’s arrest of its creator, although some similar portals have emerged. In all of these, to register as a selling user, you must pay an amount in bitcoins. To do this anonymously, it is necessary to use Bitcoin mixer services. This also applied to sites dedicated to the sale of contraband products such as SheepMarket and The Black Market Reloaded. Notorious was the case involving the first, which vanished 100 million bitcoins after its closure.
Elliptic’s website section, Law Enforcement, has an application where bitcoins can be tracked. This makes clear the connection between the old Silk Road portal and Bitcoin mixer services such as Bitcoin Fog, which is one of the oldest.
Many sites offer the Bitcoin mixer service, such as BitLaunder (which calls itself the perfect Bitcoin mixer), Bitcoin Fog, and Helix by Grams. Most of these sites have visible links on the average web (which we access through search engines such as Google or Bing) and “reference points,” but to carry out a mix of bitcoins is necessary to use the Deep web.
It is there, in that space unknown to many, that transactions take place. The reason is obvious. A site that is washing large amounts of bitcoins can not have a public domain that Google throws as a search result.
That’s why Tor becomes a valuable alley for those who need to wash their bitcoins. Tor is a specialized browser to access the dark web and deep web websites that have the power to ensure the anonymity of the individual performing the search. With it, the user is free to explore the deepest and darkest parts of the internet without being identified. This makes it an ideal medium for accessing Bitcoin mixers.
The Bitcoin Portfolios:
In addition to using Tor as the most widely used browser, users tend to create several bitcoin portfolios both on the web and through Tor. The former can be created in the Blockchain.info service and would be the public, “legal” wallets with which the user could buy bitcoins on highly researched sites such as Coinbase. On the other hand, the second ones would be those portfolios that nobody can know who their real owner is and they are created frequently in Deep Internet sites.
How does this help? Because if you have more than one portfolio, the user can transfer the Bitcoins to himself from one to another and then proceed to send the money to the server that will make the mix. The reason for this is to make tracking even more difficult and, moreover, it is a data recovery mechanism, in case the user loses the password to access his original portfolio.
Legality and Reliability:
According to the bitcoin wiki – mixing large amounts of money can be classified as illegal because it would violate the anti-structuring laws.
As for reliability, it is fair to say that there may be risks. After all, the user is transferring his money to a hidden server that might well not give him the agreed bitcoins in return.