Mixers & shapeshifters
Popular blockchain services pose a challenge for investigators
by eliminating the ability to “follow the money trail” on the
blockchain as part of an attempt to track illicit transactions and
identify involved parties.
These services usually involve mixers, also known as tumblers,
shufflers, or blenders. Mixers refer to a virtual service that ‘mixes’
one user’s cryptocurrency with another’s. Mixers pool, group and
scramble crypto assets from multiple addresses for a period of
time before sending them at random time periods to destination
addresses, thus obscuring the money trail.
A shapeshifter is a type of mixer that
takes this process one step further by
converting the funds to a different
cryptocurrency for added anonymity.
An additional use of a shapeshifter is
chain hopping, an exchange from one currency
to another, often in rapid succession in an effort to
lose trackers.
CoinJoin is a mixing service that joins or combines several
payments from several users into a single transaction, making it
difficult to determine who spent how much on what, and who
the recipients are. CoinJoin is a unique mixer since it's secure
and does not require the funds to be owned by the mixer service
provider at any point in time. Thus, the service secures funds
from scams.
2. https://techcrunch.com/2022/08/12/suspected-tornado-cash-developer-arrested-
in-amsterdam/
Mixers enable money-laundering at a massive scale, see
for example the arrest made by US law enforcement of the
developer of Tornado Cash, a mixer used to launder more than
$7 billion worth of virtual currency from 2019 until 2022
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Tracking activity on the blockchain and following
the illicit money trail to an exchange
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Keeping up with financial investigations in the crypto age 7