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Crypto Mixer Elimination Fights Criminal Activity
Links between crypto and criminal activity have been asserted for years and, though often crypto’s reputation as a haven for criminal activity is unwarranted (and in many instances factually incorrect), there are always bad actors who seek to use any financial service for their own gain. Simple accusations such as ponzi schemes or fraud have been seen numerous times but in more recent times, ‘crypto mixers’ have become a popular choice with crypto-anarchists and, in some cases, criminals.
Crypto Mixers came onto many peoples’ radar with the sanctioning of Tornado Cash in August of last year after it had been used to launder US$7bn+ in virtual currencies. The use of a crypto mixer - a service that obscures the sources of crypto funds for its users - isn’t technically illegal although the promise of anonymity (something that people erroneously believe crypto inherently is) can draw attention from criminals who seek to avoid detection and prosecution from the law.
This week, another crypto mixer was targeted by the authorities after significant illicit activity was detected, which resulted in the service being taken down. ChipMixer was an unlicensed mixer which was targeted because of its known links to cybercrime, and as a result almost 2000 bitcoin (worth close to US$50 million at time of writing) and significant data on related criminal activity were seized. The action was a joint operation between Belgium’s Federal police; Germany’s Federal Criminal Police Office and General Prosecutors Office Frankfurt-Main; Poland’s Central Cybercrime Bureau; Switzerland’s Cantonal Police of Zurich; and the USA’s Federal Bureau of Investigation, Homeland Security Investigation, and Department of Justice.
This news comes not long after an announcement by Norway’s National Authority for Investigation and Prosecution of Economic and Environmental Crime where more than 60 million Norwegian Krone (worth more than US$5.5 million at time of writing) was seized after it had been stolen from Sky Mavis and its game Axis Infinity. This action also involved collaboration with the FBI and the U.S. Department of Justice and highlights that, far from being a haven for criminal activity, a transparent and immutable blockchain is hugely unsuitable for criminal activity. Even with attempts to obscure funds in crypto mixers, authorities are able to identify bad actors and bring them to justice.
Of course, many who use crypto - and even crypto mixers - simply want privacy and self-sovereignty in their finances. To this end, Blockpass offers both privacy and compliance, putting the customer in charge of their data and ensuring personal information remains personal whilst also ensuring that the highest regulatory standards are maintained and bad actors are unable to use the services. Work done in the Blockpass Identity Lab in collaboration with Edinburgh Napier University aims to see the development of features which will enhance this privacy such as zero-knowledge proofs and homomorphic encryption.
The Blockpass platform is fully automated and hosted in the cloud, with no integration or setup fee. Businesses can sign up to the KYC Connect console in a matter of minutes, test out the service, and start conducting identity documents verification, KYC and AML checks. Take a look at Blockpass' groundbreaking crypto compliance solutions:
KYC CONNECT®
- Built-for-Crypto, centralized off-chain KYC platform
- Bank-grade KYC/AML
- No integration necessary, no setup cost
- Self-service and managed SaaS plans
ON-CHAIN KYC®
- On-chain, zero-knowledge verification KYC platform
- Customers complete KYCin an anonymous, data-free way
- Verification results delivered by API KYC / ID data oracle across multiple blockchains
UNHOSTED WALLET KYC™
- Only KYC solution for unhosted (or non-custodial) wallets in the market
- Adheres to the Crypto Travel Rule laws being adopted, reduces regulatory risk of transactions
- Verifies users own/control their crypto addresses
By Matthew Warner