Bitcoin (BTC) mixers
With a mixer, you throw a number of Bitcoin transactions in one heap, as it were, and mix them up. This makes it more difficult to track your bitcoin on the network. One of the main uses is a CoinJoin. Everyone who participates makes their own bitcoin transaction. And at the end of the ride, all BTC arrive neatly at the right place. However, the transaction does not leave a clear trace to the bitcoin address where it came from, so you ensure that less information is available about your addresses and transaction history. In Q1 2019, there was 1% of "dark web entities" using a bitcoin mixer. In the past quarter this year, that percentage has increased to 20%. On the other hand, these entities are also sending less Bitcoin to crypto exchanges: from 24% in Q1 2019 to 13% in Q1 2020. According to the researchers, this is a result of stricter laws and regulations. More and more trade fairs are using know-your-customer and anti-money laundering procedures.
Dark web transactions
Also in an absolute sense, much more BTC has been sent to mixers. 790 BTC in Q1 2019 compared to 7,946 BTC in the first three months of 2020. Volume also increased from $ 3 million to $ 67 million. The number of BTC actually received - after mixing - also skyrocketed: 288 BTC in Q1 2020 compared to 106 BTC in Q1 2019. In absolute terms, $ 2 million versus $ 400,000, a difference that can be partly explained by a higher bitcoin price in early 2020 compared to early 2019. Dark web entities also receive BTC without the need for a mixer. It is striking that the number of BTC received has decreased in the past 12 months. That would mean that alternative cryptocurrencies such as privacy coins are emerging.
Mixers are a thorn in the side of authorities, there are a number of cases where money launderers or hackers use mixers to anonymize their Bitcoin. Within the new Dutch crypto law, "mixing" also falls within the category of "suspicious transactions". The Financial Intelligence Unit, part of the Ministry of Justice, collects and analyzes suspicious cryptocurrency transactions. Previous research shows that less than 1% of Bitcoin transactions involve money related to criminal activities.