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A coin mixing service is or cryptocurrency tumbler is defined as a service to help blend potentially identifiable cryptocurrency funds with others.
The purpose of this service is to help obscure or conceal the trail of these cryptos back to the fund’s original source.
This can be appealing for many to help safeguard information or the size of any transaction done on a network.
Such services are sometimes relied upon, given the anonymity of most cryptos and a publicized ledger of all transactions.
Coin mixing services operate by taking a percentage transaction fee of the total coins mixed to turn a profit. Competitive rates currently range from typically 1 - 3%.
Issues of Coin Mixing Services
These services are designed to protect privacy for users, though have been met with a large degree of criticism.
A truly anonymous system with no oversight is already vulnerable to abuse. However, these services are ideal for money laundering through mixing illegally obtained funds.
Many opponents of Bitcoin and other cryptos routinely cite these constructs as issues for fostering known forms of abuse.
Coin mixing services have also been accused of helping sponsor terrorist activities, though the evidence for this trend is not exactly ironclad.
The rational is not entirely unfounded, given the ramifications of concealing the trail of all cryptos.
This position has been debated for over a decade, with several marquee instances of abuse.
Ultimately, the existence of coin mixing services has in fact made the anonymous use of darknet markets easier, hindering the job of law enforcement.