World’s Largest Bitcoin Tumbling Service Announces Sudden Shutdown
Largest mixing service BitMixer shuts down in a matter of days, leaving users both puzzled and curious. Announcements motivated by ethical reasons to stop offering the service despite millions of dollars revenue.
The largest mixing service has decided to shut down operations, citing the future of Bitcoin as a catalyst. While no links have been made official, users question possible pressure and dark market shops as a possible cause.
One of the largest mixing services announced that it will stop operating just before delivering on that promise.
Mixing Bitcoins is mainly touted as service to attempt greater privacy by anonymizing the funds to some extent. A user who forwards their funds to the mixer gets ‘mixed Bitcoins’ from the pool that the mixing service owns and his own funds then enter the pool’s reserve, which then may subsequently be delivered to another user of the mixing service.
Bitmixer.io made an announcement on the popular Bitcointalk forums stating:
“When we started this service I was convinced that any Bitcoin user has a natural right to privacy. I was totally wrong. Now I grasped that Bitcoin is transparent non-anonymous system by design. Blockchain is a great open book. I believe that Bitcoin will have a great future without dark market transactions.”
Privacy, and not aid to criminal activity, was the only service being offered by the mixing service
The announcement suggests using other currencies to buy contraband on the dark markets - not Bitcoin. Dash and Zerocoin [now named Zcash] were pointed out, which as many users know have a greater depth of privacy than Bitcoin. Despite mainstream media blaming Bitcoin for the Silk Road during the 2013 bust, better-informed holders understand that Bitcoin is actually pseudonymous and rather far from anonymous. The ledger or Blockchain can be publicly viewed by anyone with an Internet connection.
The announcement comes just days after AlphaBay was taken down in a well-coordinated sting operation with the US, Canada and Thailand participating. In the US Justice Department’s indictment related to the event, there is a clear statement of AlphaBay both using mixing/tumbling services and also advertising them on the site. This brings to light questions by users asking if there is pressure or even risk related to the event. Mixers have been pointed out as a slight risk, most recently, the EU report on money laundering and terrorist financing - while concluding cryptocurrencies as a whole are not an effective method to launder money, and even less so to finance terrorism. Cash is still the go to option.
BitMixer is sending a message to other services still engaged in mixing saying: “I hope our decision will help to make Bitcoin ecosystem more clean and transparent. I hope our competitors will hear our message and will close their services too. Very soon this kind of activity will be considered as illegal in most countries.”
While the business could easily be sold for “$5 to 6 mln”, the decision to close seems like both an ethical step and forward looking statement for the future of Bitcoin.
While Bitcoin has clearly shed its ‘sin’ phase and the whole digital currency market as a whole is rapidly maturing and even alluring to institutional investors - there are clearly some remnants of days gone by. Traders and holders of digital assets should always be on the right side of the law as regulation becomes the next challenge and necessary step. Privacy is an issue with any sensitive data or information, be it linked to assets, identity or knowledge.