Cryptocurrency tumbler

Short description: Service that attempts to obscure cryptocurrency money trails

A cryptocurrency tumbler or cryptocurrency mixing service[1] is a service that mixes potentially identifiable or "tainted" cryptocurrency funds with others, so as to obscure the trail back to the fund's original source.[2] This is usually done by pooling together source funds from multiple inputs for a large and random period of time, and then spitting them back out to destination addresses. As all the funds are lumped together and then distributed at random times, it is very difficult to trace exact coins. Tumblers have arisen to improve the anonymity of cryptocurrencies, usually bitcoin (hence bitcoin mixer), since the digital currencies provide a public ledger of all transactions. Due to its goal of anonymity, tumblers have been used to money launder cryptocurrency.

## Contents

* 1 Background
* 2 Peer-to-peer tumblers
* 3 Money laundering
* 4 See also
* 5 References

## Background

Tumblers take a percentage transaction fee of the total coins mixed to turn a profit, typically 1–3%.[3] Mixing helps protect privacy and can also be used for money laundering by mixing illegally obtained funds. Mixing large amounts of money may be illegal, being in violation of anti-structuring laws. Financial crimes author Jeffrey Robinson has suggested tumblers should be criminalized due to their potential use in illegal activities, specifically funding terrorism;[3] however, a report from the CTC suggests such use in terrorism-related activities is "relatively limited".[4] There has been at least one incident where an exchange has blacklisted "tainted" deposits descending from stolen bitcoins.[5]

The existence of tumblers has made the anonymous use of darknet markets easier and the job of law enforcement harder.[6]

## Peer-to-peer tumblers

Peer-to-peer tumblers act as a place of meeting for bitcoin users, instead of taking bitcoins for mixing. Users arrange mixing by themselves. This model solves the problem of stealing, as there is no middleman. When it is completely formed, the exchange of bitcoins between the participants begins. Apart from mixing server, none of the participants can know the connection between the incoming and outgoing addresses of coins.[7]

## Money laundering

In December 2013, cryptocurrency tumbler Bitcoin Fog[8] was used to launder a part of the 96,000 BTC from the robbery of Sheep Marketplace.[9]

In February 2015, a total of 7,170 Bitcoin was stolen from the Chinese exchange Bter.com and traced back to the same tumbler.[10]

In May 2019, FinCEN published a Guidance document that mentioned anonymizing services and mentioned particularly "tumblers". [11]

In February 2020, the alleged operator of a cryptocurrency tumbler was indicted on charges of "money laundering conspiracy, operating an unlicensed money transmitting business and conducting money transmission without a D.C. license."[12]

In January 2021, the Department of Justice conducted an operation targeting the ransomware hacker NetWalker, successfully confiscating around $500,000 in digital assets. Then, in February 2021, they apprehended three hackers affiliated with the North Korean military, recovering $2 million in illicitly acquired digital assets.[13][relevant? - discuss]

In April 2021, U.S. Federal authorities arrested the founder of Bitcoin Fog, a Russian-Swedish man named Roman Sterlingov, on charges of money laundering, operating an unlicensed money transmitting business, and money transmission without a license in the District of Columbia. It was alleged that during its 10 years of operation, Bitcoin Fog laundered over 1.2 million Bitcoin at a value of approximately $335 million.[14][15] In March 2024 the verdict came back guilty on all counts. Roman's counsel plan to appeal the verdict. In November 2024, Sterlingov was sentenced to 150 months in prison. He was ordered to pay a forfeiture money judgment in the amount of $395,563,025.39, and forfeiture of seized cryptocurrencies and monetary assets valued at approximately $1.76 million. In addition, Roman was ordered to forfeit his interest in the Bitcoin Fog wallet, totaling approximately 1,345 bitcoin and currently valued at more than $103 million.[16]

In 2022, the tumblers Blender.io and Tornado Cash were both sanctioned by the United States Department of the Treasury, making it illegal for US citizens, residents and companies to use the service.[17][18]

In March 2023, the tumbler ChipMixer and 46 million dollars in Bitcoin were seized.[19]

In April 2024, Keonne Rodriguez and William Lonergan Hill, the founders of Samourai Wallet, a privacy-focused Coinjoin tool that mixes a Bitcoin transaction with other transactions, were criminally charged by the DOJ.[20] The DOJ alleged that providing these private, anonymous transactions enabled money laundering.[21]

In late November 2025 German and Swiss authorities seized the servers of "cryptomixer.io", took the website down and confiscated some 25 million Euro in Crypto currencies. No arrests were announced but the contents of several mail accounts was secured. The operators are being investigated for money laundering.[22]

## See also

* Anonymity
* Code as speech
* Cryptocurrency and crime
* Money laundering
* Privacy and blockchain

## References

1. ↑ Jeffries, Adrianne (19 December 2013). "How to steal Bitcoin in three easy steps". https://www.theverge.com/2013/12/19/5183356/how-to-steal-bitcoin-in-three-easy-steps.
2. ↑ The Cryptocurrency Tumblers: Risks, Legality and Oversight. Law and Society: Private Law - Financial Law Journal. Social Science Research Network (SSRN). Accessed 6 December 2017.
3. ↑ 3.0 3.1 Allison, Ian (February 11, 2015). "Bitcoin tumbler: The business of covering tracks in the world of cryptocurrency laundering". http://www.ibtimes.co.uk/bitcoin-tumbler-business-covering-tracks-world-cryptocurrency-laundering-1487480.
4. ↑ Brantly, Aaron (31 October 2014). "Financing Terror Bit by Bit". https://www.ctc.usma.edu/posts/financing-terror-bit-by-bit.
5. ↑ ICIJ. "Binance, exchanges moved dirty crypto after crackdown". International Consortium of Investigative Journalists. https://www.icij.org/investigations/coin-laundry/cryptocurrency-exchanges-binance-okx-money-laundering-crime/. Retrieved 20 November 2025.
6. ↑ IHS Jane's Intelligence Review (30 December 2014). "Law enforcement struggles to control darknet". http://www.janes.com/article/47455/law-enforcement-struggles-to-control-darknet.
7. ↑ See, Kenneth (2023). "The Satoshi laundromat: a review on the money laundering open door of Bitcoin mixers". Journal of Financial Crime 31 (2): 416–426. doi:10.1108/JFC-11-2022-0269.
8. ↑ Greenberg, Andy. "Bitcoin Fog". Wired. https://www.wired.com/story/bitcoin-fog-dark-web-cryptocurrency-arrest/. Retrieved 2021-05-03.
9. ↑ Edwards, Jim (4 Dec 2013). "A Thief Is Attempting To Hide $US100 Million In Stolen Bitcoins -- And You Can Watch It Live Right Now". https://www.businessinsider.com/a-thief-is-attempting-to-hide-100-million-in-stolen-bitcoins-and-you-can-watch-it-live-right-now-2013-12.
10. ↑ Ghoshal, Abhimanyu (12 March 2015). "Chinese Bitcoin exchange Bter will pay back users after losing $1.75 million in cyberattack". The Next Web. https://thenextweb.com/insider/2015/03/12/chinese-bitcoin-exchange-bter-will-pay-back-users-after-losing-1-75-million-in-cyberattack/.
11. ↑ "Application of FinCEN's Regulations to Certain Business Models Involving Convertible Virtual Currencies". https://www.fincen.gov/sites/default/files/2019-05/FinCEN Guidance CVC FINAL 508.pdf.
12. ↑ "Ohio Resident Charged with Operating Darknet-Based Bitcoin "Mixer," which Laundered Over $300 Million" (in en). 2020-02-13. https://www.justice.gov/opa/pr/ohio-resident-charged-operating-darknet-based-bitcoin-mixer-which-laundered-over-300-million.
13. ↑ Hossain, Mohammad Belayet (2023-11-28). "Acquiring an awareness of the latest regulatory developments concerning digital assets and anti-money laundering" (in en). Journal of Money Laundering Control 26 (6): 1261–1268. doi:10.1108/JMLC-10-2022-0147. ISSN 1368-5201. https://www.emerald.com/insight/content/doi/10.1108/JMLC-10-2022-0147/full/html. Retrieved 2024-04-11.
14. ↑ Lyons, Kim (2021-04-29). "Feds arrest founder of bitcoin 'mixer' they say laundered $335 million over ten years" (in en). https://www.theverge.com/2021/4/29/22409501/feds-arrest-founder-bitcoin-mixer-laundered-cryptocurrency.
15. ↑ "Individual Arrested and Charged with Operating Notorious Darknet Cryptocurrency "Mixer"" (in en). 2021-04-28. https://www.justice.gov/opa/pr/individual-arrested-and-charged-operating-notorious-darknet-cryptocurrency-mixer.
16. ↑ "Operator of 'Bitcoin Fog' Sentenced to More Than 12 Years in Prison for Running Notorious Darknet Cryptocurrency Mixer" (in en). 2024-11-08. https://www.justice.gov/usao-dc/pr/operator-bitcoin-fog-sentenced-more-12-years-prison-running-notorious-darknet.
17. ↑ Clark, Mitchell (2022-05-06). "US punishes Blender.io for helping North Korea launder millions in stolen Axie crypto" (in en). https://www.theverge.com/2022/5/6/23060544/us-treasury-blender-io-sanctions-bitcoin-mixer.
18. ↑ Faife, Corin (2022-08-08). "US Treasury bans Tornado Cash mixer for role in crypto money laundering" (in en). https://www.theverge.com/2022/8/8/23296778/us-treasury-tornado-cash-crypto-mixer-sanctions-ethereum-north-korea.
19. ↑ Coote, Darryl (16 March 2023). "Int'l operation takes down ChipMixer money laundering service". UPI News. https://www.msn.com/en-us/money/other/intl-operation-takes-down-chipmixer-money-laundering-service/ar-AA18HnDt.
20. ↑ "The government fears this privacy tool" (in en-US). 2024-05-09. https://reason.com/video/2024/05/09/the-government-fears-this-privacy-tool/.
21. ↑ Sun, Mengqi (2024-04-24). "Crypto Mixer Samourai Wallet's Co-founders Arrested for Money Laundering" (in en-US). Wall Street Journal. ISSN 0099-9660. https://www.wsj.com/articles/crypto-mixer-samourai-wallets-co-founders-arrested-for-money-laundering-df237a4e.
22. ↑ "Ermittler zerschlagen Plattform für Online-Geldwäsche" (in de). 2025-12-01. https://www.zeit.de/gesellschaft/2025-12/kryptowaehrung-behoerden-bundeskriminalamt-geldwaesche.

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