Cryptocurrency transactions are recorded on public blockchains, meaning your wallet addresses can potentially be linked back to your real identity. This causes obvious privacy concerns for many crypto users.
Cryptocurrency mixers (also called tumblers) provide a solution by obscuring the source of funds, making transactions more anonymous. They work by mixing your crypto with that of other users before sending it to the desired address.
In this article, we’ll explore how crypto mixers work, their legality, and how to use them to gain more anonymity on the popular BetPro Exchange platform.
What Are Cryptocurrency Mixers?
Cryptocurrency mixers (or tumblers) are services that mix potentially identifiable or “tainted” cryptocurrency funds with funds from numerous users before sending it back to the original user minus a mixing fee. This breaks the connection between addresses, obscuring the source of the funds.
They function as a third party to transfer your coins into a “pooled” crypto address along with coins from other users. Obscuring the trail back to the original sender.
How Do Cryptocurrency Mixers Work?
Cryptocurrency mixers have three main steps:
- Send – Users send their crypto to the mixer’s address. Different mixers support different cryptocurrencies.
- Mix – The mixer obscures the source of funds by mixing or “tumbling” user crypto. Mixers have large reserves of their supported cryptocurrencies which they use to facilitate mixing.
- Receive – After the mixing process, users receive their original crypto amount minus a mixing fee back at a new address which breaks the link with any potentially identifiable addresses they were transferred from initially.
This mixing process helps anonymize transactions, making the flow of transactions harder to track. The more mixers and rounds of mixing used, the more anonymity gained.
Legality of Cryptocurrency Mixers
The legal status of cryptocurrency mixers is still an unclear gray area in most countries. Since they are used to increase anonymity and privacy, they come into conflict with global Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) regulations.
The core issue regulators have is how these tools can potentially facilitate illegal activity by obscuring the flow of funds.
Cryptocurrency mixers themselves don’t enable criminal activity per se. Much like cryptocurrencies themselves, they have valid uses but can also be misused for illegal purposes by bad actors.
The regulatory stance differs across various countries:
- USA – The U.S. Treasury has voiced concerns but cryptocurrency mixers are currently still legal. However, they are required to comply with AML and CTF regulations.
- Japan – Japan explicitly made cryptocurrency mixers illegal to operate in 2020 citing AML regulations. Penalties for operating one include fines and up to 10 years in prison.
- UK & EU – Generally viewed as illegal under illicit finance laws if marketed for people to disguise illegally obtained funds. But penalties not strictly enforced yet across Europe.
Many popular mixers have shut down operations or blocked countries with more stringent regulations in response. Since decentralized mixers also exist, regulation appears challenging but may ramp up in future depending on how anonymous crypto tools evolve.
Anonymizing Transactions on BetPro Exchange
When making crypto transactions on a platform like BetPro, using cryptocurrency mixers can help provide more privacy from potentially associating your wallet addresses together or to your real identity.
BetPro Exchange supports buying, selling, and trading various cryptocurrencies. This inherently requires sending and receiving crypto transactions. Using crypto mixers provides an extra layer of anonymity over simply using a platform like BetPro directly for making transactions.
Step #1: Select a Cryptocurrency Mixer
There are many mixers to choose from – both centralized and decentralized options exist. When selecting one, key aspects to evaluate include:
- Supported cryptocurrencies
- Mixer fees
- User reviews & feedback
- Ease of use
- Transaction speed and limits
Some top cryptocurrency mixer options which support Bitcoin, Ethereum, and other major cryptos include:
- Chipmixer
- MixTum
- Blender.io
Decentralized options like Tornado.cash for Ethereum also exist for improved anonymity since you don’t rely on a third party service.
Step #2: Create Anonymous Wallets
Using a unique crypto wallet address just for interacting with the mixer helps isolate it from any other potentially identifiable wallet addresses you own elsewhere across exchanges or platforms.
You can easily generate new Bitcoin, Ethereum, Litecoin or other coin wallets for free using platforms like MetaMask or trust wallet.
And for improved privacy – transaction-specific burner wallet addresses can also be generated each time with options like Wasabi wallet for Bitcoin-only mixing.
Step #3: Mix Cryptocurrency & Send/Receive
With anonymous mixer-specific wallets setup, you can now mix coins by sending from your main wallet to the mixer address to start obscuring transaction trails.
After mixing completes, transactions can flow from the mixer to your anonymous platform wallet address on BetPro Exchange for private transacting.
Some final tips when using cryptocurrency mixers with buying/trading platforms:
- Always generate fresh deposit addresses on exchanges for improved privacy
- Use a VPN to help anonymize internet connections
- Turn off email notifications for mixer & exchange accounts
- Enable 2FA authentication for securing accounts
Using these steps provides greater anonymity for cryptocurrency transactions conducted via platforms like BetPro Exchange by adding mixers into the process.
Pros & Cons of Cryptocurrency Mixers
Let’s summarize some pros and cons to consider when using crypto mixers:
Pros
- Increased privacy and anonymity from blockchain tracking
- Can help protect identity and avoid security risks
- Useful for legal purposes like securing wealth or avoiding price manipulation
- Transaction obfuscation helps avoid blockchain analytics
Cons
- Centralized mixers can themselves deanonymize users if compromised
- Additional complexity, transaction times and fees
- Regulatory gray area in most countries still
- Allows illegal use cases like money laundering or tax avoidance
Like most privacy-enhancing tools there are valid legal reasons, as well as illegal misuse cases to consider. But fundamentally cryptocurrency mixers do solve an important user need – anonymizing public blockchain transactions from growing analytics.
Conclusion
Cryptocurrency mixers help increase fungibility and transactional privacy for crypto users concerned with blockchain tracking or linking wallets to real identities. This is often perfectly legal for personal security or wealth protection reasons.
However, these same anonymizing features also raise concerns from governments and regulators related to illegal activities like tax avoidance, money laundering and terrorism financing. But mixers themselves don’t directly enable crime, they just provide transaction privacy which can be misused like any tool.
Using cryptocurrency mixers with exchanges like BetPro adds an extra privacy layer for transactions conducted via their platforms. By mixing funds before depositing, links between your various wallet addresses and transactions are obscured. Making accounts and trades conducted at BetPro or other exchanges harder to associate together or track on public blockchains.
While the regulatory outlook remains uncertain into the future, cryptocurrency mixers solve a real user need today. But should be used carefully and legally to avoid potential compliance issues depending on your jurisdiction.
Frequently Asked Questions
Are crypto mixers fully anonymous?
No mixer can guarantee full anonymity since blockchain transactions are still publicly recorded. But using multiple rounds of mixing across different services helps increase privacy considerably by breaking the trail back to original wallets.
What mixer fees should I expect?
Most centralized mixers charge 1-3% of the input crypto amount as a mixing fee. Some also implement additional fixed fees or minimum amounts for mixing. Decentralized options can avoid fees but involve paying gas prices for transactions.
Can I get in legal trouble for using a mixer?
In most countries crypto mixers are still a legal gray area. But actively using them to conceal illegal funds or expressly avoid law enforcement can land you in legal trouble depending on your jurisdiction. Avoid clearly shady services advertising as ways to evade taxes for example.
How long does the mixing process take?
Mixing completion times vary across solutions chosen from nearly instant to 24 hours plus in some cases. Factors are number of mix stages, user demand, and how many confirmations required before users can withdraw mixed coins again. More rounds and precautions equal improved privacy but also longer processing times.
What’s better centralized or decentralized mixing?
Decentralized services have some advantages for privacy since you aren’t trusting a third party. But they involve slower transaction times, require using cryptocurrencies networks directly and can have fees making smaller mixes expensive. Centralized mixers are easier to use as a tradeoff but you must trust them not to deanonymize or steal user funds. A dual, layered approach makes sense for improved privacy.