Authorities of Netherlands have closed down operations of Bestmixer, a cryptocurrency mixing operations based in the country.
Basically, Bitcoin mixing is a service that receives Bitcoin payments from customers to help them mask their Bitcoin transactions for whatever reasons known to the customer.
Using the domain name Bestmixer.io, the company used to be one of the most popular digital currency mixing operations in the world as a result of its support for Litecoin (LTC) and Bitcoin Cash (BCH).
However, its operations drew the attention of the government because of the suspicions that the mixing service is used to process illegal financial flows across various European countries.
FIOD, the Dutch agency behind the crackdown, said it carried out an investigation which revealed the identities of customers stating that some of the persons involved were of questionable character:
On 22 May, the FIOD and the Public Prosecution Service took one of the largest online mixers for crypto currency offline. This is Bestmixer.io. This promotion is a major blow to the disguise of criminal money flows through the mixing of crypto currencies such as bitcoins.
In the Netherlands and Luxembourg, six servers were dismantled and seized.
The investigation involved close cooperation with the Digital Intrusion Team (DIGIT) of the police, Europol and with the authorities in Luxembourg, France and Latvia. In June 2018, the Financial Advanced Cyber Team (FACT) of the FIOD started the investigation led by the Functional Public Prosecutor’s Office. The reason was a report from cyber security company McAfee.
The study collected information from transactions between customers and Bestmixer.io. The customers come from all over the world with an emphasis on the US, Germany and the Netherlands. The FIOD will analyze the information together with Europol. The data is then shared with other countries.
Mixing crypto currency
On the anonymous part of the internet, the darknet, crypto currencies are regarded as a regular payment method and are often used as a payment method in the criminal world.
A crypto mixing service is an online service that makes it possible to disguise the origin or destination of crypto currency. With this service, crypto currency is split up against payment of a commission and merged in a different composition.
People who use a mixing service probably do so to increase their anonymity. The research to date shows that many of the mixed crypto currencies have a criminal origin or destination. The mixer was probably used in those cases to disguise criminal money flows and to launder them.
The total turnover of darknet markets amounts to approximately 800 million dollars on an annual basis. The suspicion is that a large proportion of payments via the dark network go through mixers to launder the criminal (crypto) funds.
One of the three largest mixing services
Bestmixer.io is one of the three largest crypto currency mixing services and offered services for mixing the crypto currency bitcoins, bitcoin cash and litecoins. The service started in May 2018, achieved a turnover of at least $ 200 million (around 25,000 bitcoin) in a year and guaranteed that customers would remain anonymous.
The action against Bestmixer.io is a major and important step in combating criminal money flows in general and virtual criminal money flows in particular.
Without ‘mixing’ words, the operations of Bestmixer looked very dodgy because know your customer (KYC) information are not required and users actually use the service to hide their identity despite the anonymity provided by Bitcoin transactions.