Mixer – a tool to enchant hundreds of millions of dollars in illegal digital currency

According to Fortune, crypto-stealers will essentially put the proceeds into a software program that “mixes” them up, and then pulls out the exact amount they put in. However, the nature of the source of money has changed.

“That makes the effort to trace the source of the money much more challenging. It also allows the bad guys to hide the source of the money,” said Chris DePow, senior adviser at the analytics firm. blockchain Elliptic, said.

In 2021, an Ohio man was found to have run a mixer tool called Helix to launder over $300 million in cryptocurrencies. Last April, another man also used Bitcoin Fog to launder over $335 million in cryptocurrency. Earlier this year, a hacker stole $33 million worth of cryptocurrency on Crypto.com and find a way to wash them through the Tornado Cash mixer.

According to experts, with the “wild west” characteristic of the cryptocurrency sector, the use of mixers by bad guys to launder money will continue to increase in the coming time.

What are mixers?

“Imagine in front of you is a pool full of coins placed by the members present. You stand on one side of the pool and place $100, then go around to the other side to get another $100. In essence, you don’t lose $100, but the money you hold in your hand is different,” Fortune explain. “That’s the same principle that a mixer works with cryptocurrency.”

However, the “mixers” are fundamentally different. Some names like Blender.io operate in a centralized form, while Tornado Cash is decentralized or runs completely automatically instead of any human being in charge. Some even advertise on the dark web that the tool can help circumvent the law, but others claim to comply with regulatory authorities and are openly advertised.

Currently popular mixers include Wasabi Wallet, ChipMixer, JoinMarket, SamouriWallet… Kim Grauer, Research Director at blockchain analytics firm Chainalysis, said that each day these tools can “mix” about 30 million dollars in digital currency.

However, the most popular mixer is Tornado Cash. The tool supports users to deposit Ethereum (ETH) cryptocurrency into its protocol or software, and then withdraw the same amount. The most important thing is that the trace of every transaction is concealed. “Whenever ETH is withdrawn using a new address, there is no way to link the withdrawal to the deposit at the old address, which ensures absolute privacy,” according to the information on the Tornado Cash website. .

To do that, the options on Tornado Cash are very simple. Users do not have to log in or provide any personal information on this platform. Instead, they just need to give a simple name, connect a crypto wallet, confirm with a random key, then send the digital money and wait for a corresponding amount to receive. “Tornado Cash is one of the most popular tools that help criminals launder the dirty crypto they have stolen,” DePow said.

January 19, page Crypto.com was hacked and had tens of millions of dollars in digital currency stolen. As noted by CoinDesk via the Etherscan service and the cryptocurrency security company Peck Shield, the above money was transferred by the hacker group behind to many wallets and successfully “enchanted” through Tornado Cash.

Mixer is not a criminal tool

Although aiding the bad guys, Mixer is not considered illegal software. According to DePow, they are widely used when users want to trade their cryptocurrencies in private.

According to some experts, the nature of the mixers is not entirely related to money laundering. Roman Semenov, co-founder of Tornado Cash, said that the software created by his company belongs to the category of “anonymous software” and the source code is publicly available, so it cannot be called illegal.

“All we do is code and publish on GitHub,” says Semenov. “This is pretty close to the definition of freedom of information.”

But whether regulators agree with that argument is another story. The Financial Action Task Force (FATF), an organization specializing in global anti-money laundering standards, issued guidance in October 2021 stating: “Countries should ensure that financial service providers Virtual assets must manage and mitigate risks when investors engage in activities involving the use of technologies or mechanisms that enhance anonymity, including mixers, private wallets, and obfuscation technologies. sender/receiver mix”.

The UK’s National Crime Agency (NCA) earlier this month said that cryptocurrency trading tools like Mixer should be put on a control list. The US Financial Crimes Enforcement Network (FinCEN) is also considering issuing a similar regulation.

Bao Lam (according to Fortune)