What is a Crypto Mixer?
Crypto Mixer is a service that allows users to “mix” their digital assets with those of other wallet owners, so that the original source of the coins can’t be tracked. This is helpful for individuals who want to remain anonymous or circumvent restrictions imposed by certain markets.
While there are many legitimate uses for mixers, they have a notorious reputation among cybercriminals who use them to launder money or engage in scams. In fact, the number of cryptocurrency mixers has risen rapidly since 2020, and while their usage has calmed down a bit in 2022, they are still popular tools for bad actors who seek to conceal their identities or activities.
As a result, mixers are at the center of a tug-of-war between privacy and regulation. Many Bitcoin tumblers are seeking to balance user privacy with regulatory requirements, including anti-money laundering (AML) and know-your-customer (KYC) compliance. This balancing act often proves challenging, as increased regulations can reduce the anonymity that originally attracted many to the cryptocurrency space.
Cryptocurrency mixers work by taking a user’s tainted Ethereum and pooling it with a large number of other deposits, which makes it harder to trace the origin of individual coins. They also typically delay the transaction between the mixer and the destination address, which further increases their anonymity. In addition, noncustodial mixers can reduce their risk by eliminating a single point of failure in the form of a centralized server, which could be hacked and lose its users’ data. Crypto Mixer