If you value anonymity while operating crypto, you probably considered using various means to make your transactions untraceable. One such method is putting your transactions through a crypto mixer. This is a service that obscures the source and target when you transfer coins and allows you to buy BTC anonymously.

All bitcoin tumblers operate based on similar principles. All coins from various users are added to the common pool. They are mixed and shuffled before continuing the transaction. As a result, each transaction becomes split into multiple smaller ones. If anyone would like to trace who sent it and to whom, it is now practically impossible because they would need to figure out the route of each smaller part. Modern coin tumblers also use additional means of obfuscation, such as untraceable cryptocurrencies at an interim stage of fulfilling a transaction.

Why People Question the Legality of Bitcoin Mixers

As you see, coin mixers are essential for anyone who wants to trade Bitcoin anonymously. However, some people doubt if using crypto tumblers is legal. Actually, it is not against the law to protect your privacy, so you can freely use services intended for this purpose. However, it is useful to go into particularities, because the details may depend on the local laws.

In general, coin tumblers become the object of scrutiny for authorities, because theoretically they can be used for money laundering and financing criminal activities. Naturally, not everyone who wants to make anonymous transactions is hiding something unlawful. For most users it is just the opposite: they turn to mixing BTC to make their cryptocurrency operations more secure, for example, to prevent their wallet from being targeted by scammers after transferring a significant amount of money.

Can Authorities Close a Bitcoin Mixer?

Bitcoin mixers have existed almost as long as the cryptocurrency itself, and there are several known cases when such services were prosecuted or closed by the authorities. For example, in 2019, the Dutch Service for Financial Intelligence and Investigations shut down a cryptomixing website. This happened after accusations that the website was used for money laundering. However, it is worth noting that the owners of this mixing service were explicitly advertising as a means for crypto laundering and hiding unlawful activities, not just a privacy-enhancing method.

A similar case was investigated in the US in 2020 when an owner of a coin mixing service had to protect himself in court against accusations of money laundering. Similar to the previous example, his service was advertised not to regular users who want privacy, but to those conducting criminal activities. Moreover, according to US financial law, centralized custodial coin mixers are viewed as money transmitters and are subject to laws and regulations for such services.

How To Use Bitcoin Mixers Safely?

However, in most cases, coin tumblers do not have any problems with the law and can be used safely. Here is some advice that will help you choose the coin mixing service which fits your purpose:

• Find out how long a particular service is presented on the market. Use well-established and reputable ones. If it exists for several years, there is less risk that something unexpected will happen to it.
• Study user reviews. Learn about other people’s experiences and the details of how the service operates.
• Pay attention to the positioning of the service. If it is advertised as a means for crypto laundering, similar to the examples mentioned above, it may draw attention to your transactions even if you are not doing anything illegal. Choose reputable crypto tumblers positioning themselves as privacy-enhancing services for the general public.
• Give preference to the decentralized coin mixers, if possible. If there is no central entity, no logs are stored, and there is less risk for you to lose your money when conducting a transaction. If you want to use a centralized service, pay attention to their policy of logging transactions and interacting with the authorities. If possible, learn, what country is the service located in, and what are the local laws regarding crypto.
• Read the Terms of Service to understand how a particular Bitcoin tumbler  It is useful to know details before transferring your hard-earned money. Learn about transaction fees and other important details.

If you follow the recommendations, you will be able to determine if a particular coin mix provided can be trusted and used to protect your privacy. If using Bitcoin anonymously is important for you, we also advise using additional protection methods, not restricting yourself to mixing crypto. Use a VPN while conducting any cryptocurrency operations or visiting related websites, so your internet provider will not know what activities are you performing online. To choose a reliable VPN service, apply a similar approach: give preference to the services with a no-log policy, which will not disclose information about the users in case of a request from authorities.

Bitcoin mixer became an essential tool for protecting the privacy for anyone who wants to use cryptocurrency anonymously. Putting your transactions through such a service is legal and will enhance your cyber security.