Bestmixer.io is European-based cryptocurrency tumbler (mixer) that has reportedly “achieved a turnover of at least $200 million (approx. 27,000 bitcoins)” since May 2018 and was shut down on May 22nd by Europol.
The Dutch Fiscal Information and Investigation Service (FIOD) seized six of Bestmixer’s servers on accusations that the services were being used for money laundering and illegal financing. Upon visiting the site, individuals see a message from Europol and FIOD stating Bestmixer.io has been seized and that “Dutch Law Enforcement have started an investigation on Bestmixer.io in June 2018. In this investigation we have collected information about transactions, letters of guarantee, and support messages. YOU ARE NOT ANONYMOUS.”
In their press release, Europol noted that they also collected “IP-addresses, transaction details, bitcoin addresses and chat messages” and that “[t]his information will now be analysed by the FIOD in cooperation with Europol and intelligence packages will be shared with other countries”.
Mixing services solve a market demand
Mixing services are becoming increasingly popular as individuals realize that many cryptocurrencies are only pseudo-anonymous since blockchain analysis techniques can track the publicly available transaction data. Then the anonymity is lost if tracking services can link cryptocurrency addresses to real world identities. Recently, Wasabi Wallet and Cash Shuffle have been released for Bitcoin and Bitcoin Cash, respectively. Mixing services help add an additional layer of privacy by mixing transaction data between multiple parties in an attempt to further hide the true origin of the transaction data. However, many suffer from the fact that they use centralized servers, which could provide sound privacy so long as they are implemented correctly, but this relies on trust.
Within the United States, the DEA has already come out and said that there are “ways of tracking them”, referring to cryptocurrencies used in criminal activities. Blockchain analysis research and companies are appearing more frequently as governments and individuals look for new ways to decipher data and individuals behind cryptocurrencies. However, there has also been conflicting research about exactly how much of cryptocurrency transactions are actually used in illegal activities and thus how truly necessary these efforts are.
Dash offers additional trustless privacy built into the network
Rather than having to go to a third party, Dash users that want additional optional privacy, can do so by utilizing PrivateSend. Unlike other mixing services, PrivateSend is built into the Dash protocol and offers multiple rounds of mixing rather than a single round like that of other services. Plus, it utilizes the decentralized Dash masternode network, which further enhances security over centralized servers coordinating mixing of users’ funds.
PrivateSend also got an upgrade with version 0.13.0 (formerly known as version 0.12.4) by having the number of mixing rounds increase from a “default of two and a maximum of eight to a default of four and a maximum of 16”. Additionally, another lower denomination of 0.001 Dash was added to help increase speed and lower costs. As a tit-for-tat privacy versus analysis race appears to be occurring between cryptocurrency developers/users and cryptocurrency regulators, the emphasis is shifting towards more continuous efficient development, which Dash has demonstrated its competence in during the past few months of releases and upgrades.