Bitcoin Tumbler / Mixer Scams

With the enforcement of “know your customer” (KYC) guidelines in place at many cryptocurrency exchanges, the ability to link a Bitcoin address with the identity of the owner is a relatively simple task.

For those who prefer to keep their identities anonymous and secure from attacks, these policies create privacy concerns among cryptocurrency users. The result has created a need to enhance the privacy and security for users. Therefore, the idea to create Bitcoin tumblers and mixers was developed in order to keep transactions on the blockchain anonymous. 

What is a Bitcoin Mixer?

A bitcoin tumbler or mixer is a service that creates an anonymous way to transact on the Bitcoin blockchain. Bitcoin tumblers are a particularly important service as when dealing with cryptocurrencies, anyone with access to a copy of the blockchain has the ability to trace the movements of all coins in a user’s wallet.

As a matter of fact, all transactions performed by a crypto wallet can be viewed to identify the source and destination of crypto coins that are sent and received. A tumbler service confuses the identification process ultimately making it impossible to trace. This is essentially achieved by sending unique coins, that are different to the ones you received, to a new crypto address. This technique interrupts the link that connects the incoming and outgoing crypto coins from the mixer and makes it impossible to trace. The owner of the crypto wallet and its contents remains anonymous and untraceable.

Simply put, a coin mixing service takes your cryptocurrencies that are stored in your wallet and gives you new cryptocurrencies in exchange in order to keep your identity and transactions and concealed.

Are Bitcoin Mixers Necessary?

As a cryptocurrency holder, there are a number of positive benefits to using a bitcoin mixer. As mentioned, a mixer creates anonymity for users that transact with bitcoin and other cryptocurrencies. Increased privacy is the main reason that users use mixing services when dealing with crypto transactions. Making a cryptocurrency payment from your crypto wallet reveals all transactions and activities on the blockchain. This lack of privacy creates the possibility of undesirable examination of your transactions by cybercriminals.

The bitcoin blockchain is an open ledger that can be accessed and viewed by anyone with a copy of the blockchain or through a search engine, also referred to as a block explorer. Exposing one’s primary wallet ID could invite unwanted access and other risks, especially with wallets that have a large amount of crypto stored. When transactions are made, wallet IDs are revealed to the merchant where payment is made. Using a tumbler keep your identity hidden and privacy maintained.

Bitcoin Mixer Scams

There are many online platforms that provide mixer services for those looking to conceal their cryptocurrency transactions. There are also a number of online guides that users can read to learn how to mix their own cryptocurrencies. 

Cybercriminals and scammers have managed to find a way to take advantage of these mixer services to scam cryptocurrency holders looking to conceal their transactions and identity online. 

A very popular site for mixing  bitcoin on the internet directs users to a number of phishing sites that have been known to deceive users of their bitcoin leaving them no recourse to retrieve their stolen funds.

In early 2020, an Ohio man was arrested for operating a Bitcoin mixing service that was responsible for the laundering of around $300 million. This was the first ever case that the U.S. department of justice had brought against a Bitcoin mixer.

According to reports, U.S authorities arrested and charged Larry Harmon, of Akron, Ohio for engaging in a Bitcoin mixer service on the dark web.

Harmon was engaged in an online website found on the dark web known as Helix. As the bitcoin blockchain is a public database, in certain cases, new purchases of Bitcoin can be linked to the purchaser’s credit card or bank account.

Helix operated as a Bitcoin mixer, taking funds from users and hiding these funds under thousands of micro-transactions. 

Harmon’s operation involved concealing certain criminal transactions from the authorities on the Darknet. Harmon worked in conjunction with other sites seeking to become the point of contact for money laundering on the Darknet.

At the end of the day Harmon’s operations were shut down and he will be facing many years in prison for his crimes.

Final Thoughts

If you prefer privacy and want to protect your cryptocurrency from being tracked, then a bitcoin mixer service is a good start.

When considering a cryptocurrency mixing service, it is important to ensure that the platform you are looking to engage with can be trusted as there is no legal authority or government where your complaint can be escalated to should the website suddenly shut down, or disappear with your funds.

Finally, research and due diligence is critical before engaging with a crypto mixing service. And make sure, of course, to only use the ones with good reviews and a high trust score.