What Are Crypto Mixers?
A crypto mixer, crypto washer, or crypto tumbler is a service that mixes various streams of cryptocurrencies together increasing their anonymity and making it harder to track back to the original source.[1]Usman W. Chohan, MBA – The Cryptocurrency Tumblers: Risks, Legality and Oversight
How Do Crypto Mixers Work?
Crypto mixers will pool funds from different periods together and distribute them at random. Equal funds are returned from what they deposited, minus a small fee (~0.1-3%) for the service.[2]Chainalysis – Cryptocurrency Mixers, Report
Users will add their addresses where they want their funds to be sent, this address will receive the same amount of coins they originally put in (minus the service fee), although it will contain small parts of various different coins.[3]CoinJar – Crypto Mixer: Is It A Silver Bullet Or Just A Trap?
Are Crypto Mixers Legal?
With the main goal of mixers being to increase anonymity and make crypto harder to trace, they have been used to facilitate money laundering and other illegal activities.[4]Chainalysis – Cryptocurrency Mixers, Report
Crypto mixers as a service aren’t illegal, although to be compliant with the law they must comply with AML and KYC requirements. If they aren’t, they can be held accountable for illegal acts that their protocol has facilitated. Under some jurisdictions anti-structuring laws, mixers may be illegal depending on the amount of money being mixed.
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