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Bestmixer Seized by Police for Washing $200 Million in Tainted Cryptocurrency Clean:
Bestmixer.io has been seized and shut down by European police for reportedly laundering over $200 million in cryptocurrency.
On Wednesday, Europol, the Dutch Fiscal Information and Investigation Service (FIOD), and Luxembourg authorities said six servers used to facilitate the service were seized in the Netherlands and Luxembourg.
Bestmixer launched in May 2018. Only a month later, police began investigating the mixing service and found that over the course of one year, the "world's leading cryptocurrency mixing service" had managed to launder at least $200 million in cryptocurrency on behalf of customers.
[...] The service was able to mix Bitcoin (BTC), Bitcoin Cash (BCH) and Litecoin (LTC). By "mixing" these tainted coins with others, it is possible to clean up funds and eradicate ties to criminal activities written in the blockchain ledger in a process also known as "washing."
[...] A commission is then taken from the original sum before the funds are diverted to another output address, free of ledger entries which may criminalize the owners.
McAfee assisted in the investigation and has published a blog post about it.
Also at: Security Week
(Score: 1) by shrewdsheep on Monday May 27 2019, @11:14AM (4 children)
Somebody cares to elaborate how this works? My guess would be that it is an ordinary exchange and depends on the fact that cross-coin transactions are only known to bestmixer. Maybe they delete logs after transactions are confirmed enough in the respective blockchains?
(Score: 5, Informative) by bradley13 on Monday May 27 2019, @12:38PM (3 children)
The basic principle of a mixer is that they combine multiple transactions, so that simple totals can no longer be followed. They may muddle the waters even more by using multiple crytocurrencies.
Without a mixer: You have 10BTC. If you transfer those to some other wallet, they are still 10BTC and can be traced back to your wallet. If you split them and transfer them, I can still follow the (smaller) amounts. Ultimately, you want your money back, so somewhere there will be one or more end wallets that are yours. It's not a difficult trail to follow.
With a mixer: You have 10BTC, and transfer them to the mixer. So do 99 other people. Now the mixer has 1000 BTC from 1000 different accounts. They transfer these 1000BTC, in random-sized increments, to hundreds of different wallets, over some period of time. Those wallets make further transfers, to thousands of other wallets, which in turn transfer to...you get the idea. Now, somewhere in there you have (say) three end wallets, with different amounts that add up to your 10BTC minus fees. Which ones are yours? How do I prove it? It's now almost impossible to figure out.
Everyone is somebody else's weirdo.
(Score: 1) by shrewdsheep on Monday May 27 2019, @12:56PM (2 children)
Thanks, that clarifies it a bit. I do not get the part with the small increments though, as when coins coalesce in a few wallets it is no (or no big) problem to trace them back through the small increments, so that would be just a bit of obfuscation. The transition to another coin I see as true anonymization. In this case, however, the mixer would function as an exchange and would have to trusted by whoever wants to use its service.
(Score: 0) by Anonymous Coward on Monday May 27 2019, @06:50PM (1 child)
So who are these 99 other folks?
If the purpose of the exchange is to hide ill gotten gains, then law enforcement could just track everything that comes thru the exchange to get a list of suspects.
Perhaps the reason it works is you would end up with a list of crimes and a list of the folks who did them, but not know who did what, so not be able to prosecute?
If they have the servers and the code that randomly split up the transactions, perhaps the randomness was not perfect and can be backed out even if the transaction logs are long gone.
Should be an interesting show.
(Score: 2) by Freeman on Tuesday May 28 2019, @03:41PM
It doesn't matter who the 99 others are, but they're most likely just random people that use the exchange for legitimate transactions. The problem is that the exchange was using their position to launder known bad money, into squeaky clean money. Most likely, the known bad money, didn't have a known owner. Thus, why you'd want to know who cashed out those coins, but when laundered in such a way, it makes it nearly impossible to find.
Joshua 1:9 "Be strong and of a good courage; be not afraid, neither be thou dismayed: for the Lord thy God is with thee"