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Yahoo
9 hours ago
- Business
- Yahoo
What Are Coin Mixers and How Do They Work?
Coin mixers have captured the attention of both the cryptocurrency community and regulators as the battle for privacy ramps up. In 2021, the founder of coin mixer Bitcoin Fog was arrested on charges including money laundering and operating a money transmission business without a license. A year later, the U.S. Treasury Department issued sanctions against Tornado Cash, an Ethereum coin mixing service, effectively banning Americans from using it. In a landmark ruling in November 2024, the U.S. Fifth Circuit Court ruled that the Treasury had overstepped by sanctioning Tornado Cash's smart contracts, although its broader designation remained intact. In a reversal of its 2022 decision, the Treasury announced in March 2025 that it had delisted Tornado Cash from its list of parties sanctioned by the Office of Foreign Assets Control, or OFAC. Fifth Circuit Rules OFAC Overstepped in Sanctioning Tornado Cash's Immutable Smart Contracts But what do coin mixers like Tornado Cash and Bitcoin Fog do—and why do people use them? In this article, we'll examine the technology behind mixers and their legitimate and illegitimate uses. What is a coin mixer, and why use them? A coin mixer is a service that allows users to obfuscate the origin and destination of transactions. Users send cryptocurrency to the service, have that crypto mixed with other coins or tokens, and then send the equivalent amount of 'mixed' coins to a recipient address, hiding the connection between the sender and recipient. There are many legitimate uses for this kind of service. Just as you may not want your employer to know the intimate details of every bank or credit card transaction that you've ever made, you may also not want your employer—or anyone else, for that matter—to know every detail of every crypto transaction you've ever made either. But as the adoption of crypto and blockchain tools grows, real-world identities are becoming increasingly linked to blockchain addresses—with every purchase, transfer, or interaction associated with those addresses laid bare on a public, transparent, distributed ledger. And that's where coin mixers come in. However, this ability to mask the identity of wallets and obfuscate transactions makes coin mixers an attractive tool for cybercriminals, and thus a target for law enforcement. While politicians and law enforcement have railed against the use of cryptocurrency in criminal enterprises, coin mixers occupy a gray area between facilitating money laundering and preserving the right to privacy. Because of blockchain's permissionless and transparent nature, some crypto users rely on the added privacy that coin mixers provide. Privacy advocates argue that coin mixers are especially useful, even necessary, in cases where a person's activities—like journalism, civil disobedience, and protest—can put that person at risk. Because of this, they require greater privacy in their crypto transactions. On the other hand, law enforcement and government agencies see coin mixers as a way for criminals to launder money using cryptocurrency, and services like Tornado Cash as a means of obscuring where the funds originated. In its announcement of the sanctions against Tornado Cash, the Treasury Department said that criminals had used Tornado Cash to launder money, saying the service processed more than $7 billion worth of virtual currency since its creation in 2019. According to blockchain analytics firm Elliptic, around $1.5 billion of that figure was connected to illicit activity. Among those illicit funds, the Treasury said, were a combined $103.8 million stolen from crypto bridging services by Lazarus Group, a state-sponsored North Korean cybercriminal group. A November 2024 ruling by the U.S. Fifth Circuit Court found that the Treasury had overstepped its authority, and that Tornado Cash's immutable smart contracts "are not property because they are not capable of being owned." The decision reversed a lower court ruling, noting that protocols built on smart contracts cannot be classified as services because they operate without "human intervention." In March 2025, the Treasury reversed course, removing Tornado Cash from its list of sanctioned entities. "Based on the Administration's review of the novel legal and policy issues raised by use of financial sanctions against financial and commercial activity occurring within evolving technology and legal environments, we have exercised our discretion to remove the economic sanctions against Tornado Cash as reflected in Treasury's Monday filing in Van Loon v. Department of the Treasury," the Treasury said in a statement. A month later, a federal court ruled that the Treasury's actions were "unlawful," permanently barring OFAC from reinstating sanctions against Tornado Cash. Judge Robert Pitman, of The U.S. District Court for the Western District of Texas, placed an order compelling the Treasury to be "permanently enjoined from enforcing" sanctions on the coin mixer, delivering a resounding victory for privacy advocates. In July 2025, the U.S Court of Appeals for the Eleventh Circuit dismissed an appeal filed by crypto advocacy group Coin Center, in which it argued that the Treasury Department had exceeded its statutory authority in sanctioning Tornado Cash. The court granted a joint motion to vacate the judgement and remand with instructions to dismiss, with both parties agreeing that the appeal was "moot" following OFAC's March decision to remove sanctions against the coin mixer. Jury Finds Tornado Cash Developer Roman Storm Guilty of Money Transmitting Charge In August 2025, Tornado Cash developer Roman Storm was found guilty of operating an unlicensed money transmitter by a Manhattan jury—though charges of money laundering and sanctions evasion failed to stick. The jury's failure to agree on all charges could pave the way for a potential retrial. Examples of coin mixers Tornado Cash: Founded in 2019 by Alexsey Pertsev and Roman Storm, this mixer was sanctioned by the U.S. Treasury Department in 2022. Tornado Cash exclusively services the Ethereum Network and is non-custodial. Samourai Wallet: A non-custodial Bitcoin-only mixer founded in 2015 by Keonne Rodriguez and William Longergan Hill, its founders were arrested and charged with conspiracy to commit money laundering in 2024. Wasabi Wallet: Founded by pseudo-anonymous zkSNACKs in 2018, it uses the ZeroLink protocol to create transaction privacy. Wasabi blocked U.S. residents from using the mixer in 2024 after the founders of Samourai Wallet were arrested. Bitcoin Fog: Founded in 2011 by Roman Sterlingov, Bitcoin Fog was a custodial mixer, and held user funds in the process of mixing them. Sterlingov was convicted of money laundering in 2024. How do coin mixers work? Before Tornado Cash was taken down, it used smart contracts to accept token deposits from one address and enable their withdrawal from a different address. Other coin mixers operate in a similar way, with smart contracts that work as a pool where all the deposited tokens get mixed together. When funds are withdrawn from those pools, the on-chain link between the source and the destination is broken, anonymizing the transaction. These kinds of coin mixers are typically non-custodial, meaning there is no third-party control of the wallet and funds, simply the creation of the smart contracts. Because these services use no intermediary, they are reliably neutral—but that also means they can be a tempting tool for cybercriminals looking to launder stolen crypto, as in the case of Lazarus Group. Coin mixers: a timeline October 2011: Bitcoin tumbler Bitcoin Fog is launched. December 2019: Coin mixer Tornado Cash is launched. April 2021: The U.S. Department of Justice announces the arrest of Bitcoin Fog operator Roman Sterlingov. August 2022: The U.S. Treasury Department sanctions Ethereum coin mixer Tornado Cash. Days later, developer Alexey Pertsev is arrested in Amsterdam on money laundering charges. March 2024: Bitcoin Fog operator Roman Sterlingov is convicted of money laundering. April 2024: U.S. authorities arrest and charge the founders of Bitcoin mixer Samourai Wallet, accusing them of conspiracy to commit money laundering. May 2024: Wasabi Wallet announces the preemptive closure of its mixing service, banning U.S. customers from using its services. Simultaneously, Phoenix Wallet pulls its app from stores in the U.S., while hardware wallet Trezor announces the discontinuation of its Coinjoin feature. November 2024: The U.S. Fifth Circuit Court rules that Tornado Cash's immutable smart contracts cannot be classified as "property." March 2025: The U.S. Treasury lifts its sanctions against Tornado Cash. April 2025: A U.S. federal court judge issues an order permanently blocking the Treasury from reinstating sanctions against Tornado Cash. July 2025: A U.S. Court of Appeal grants a joint motion to end crypto advocacy group Coin Center's appeal against OFAC's sanctions. August 2025: Tornado Cash developer Roman Storm is found guilty of a conspiracy to operate an unlicensed money transmitter, though the jury failed to reach a verdict on money laundering and sanctions evasion charges. Legitimate use cases of coin mixers Let's say there's a business owner and crypto enthusiast named Robert who wants to send Ethereum to a hacktivist group operating out of Ukraine. Robert doesn't want his donation to be traced back to him, so he uses a coin mixer. Robert goes to the coin mixer website and deposits the Ethereum he wants to donate. The sent amount is deposited into the mixer's smart contract and pooled with the other hundred, thousands, or even millions of transactions already in its pool. After receiving confirmation that the deposit was successful, Robert goes to the withdraw tab, enters the recipient's address into the mixer, and sends the Ethereum from the mixer. The Ethereum is then sent from the mixing to the recipient. On the receiving end, the address shown is that of the mixer and not the original sender's address, anonymizing the transaction. If this hypothetical scenario sounds familiar, it's based on a tweet from Ethereum co-founder Vitalik Buterin, posted after the Treasury Department sanctioned Tornado Cash. The future of coin mixers The debate over crypto privacy continues to rage, despite the series of legal cases and sanctions against coin mixers. The November 2024 ruling that immutable smart contracts cannot be classified as "property" was hailed by crypto and privacy advocates as a landmark moment, meaning that self-executing code that operates without any administrative control cannot be subject to sanctions. More recent projects like Railgun aim to give users on-chain privacy, but also ensure that they remain compliant in the eyes of the law. Railgun is not a traditional mixer; it doesn't mix coins from multiple sources together, and its founders believe it avoids the pitfalls that ultimately led to mixers getting sanctioned or sued. It also utilizes 'Private Proof of Innocence' to ensure bad actors cannot use the platform for illicit purposes. For example, on July 11, 2024, a notorious crypto drainer known as Inferno Drainer attempted to use Railgun to launder 174 ETH. However, Railgun identified that the wallet was tied to a bad actor and blocked the transactions. Whether crypto privacy projects' efforts to create legally compliant mixing services will mollify lawmakers is open to debate. One thing's for certain, though—privacy advocates will continue to fight to ensure that crypto isn't a panopticon. As Lia Holland, Campaigns & Communications Director at Fight for the Future, wrote in 2022: 'Let us be clear, hackers and cybercriminals, as well as those that support them, are deplorable and should be stopped—but not in a way that compromises human rights and the first amendment.' This article was first written in August 2022 and updated in August 2025. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Epoch Times
2 days ago
- Politics
- Epoch Times
US Appeals Court Unanimously Upholds Texas Law Requiring ID to Cast Mail Ballots
A federal appeals court on Monday upheld a Texas law requiring voters to submit identification information to cast mail-in ballots, drawing praise from President Donald Trump. A three-judge panel on the U.S. Court of Appeals for the Fifth Circuit ruled 3–0 that the requirement does not violate federal laws, namely the Civil Rights Act, reversing a lower court decision. The state's Election Protection and Integrity Act of 2021 requires a person to submit their ID number before registering to vote by mail.
Fox News
3 days ago
- Politics
- Fox News
Voter ID law in Texas wins at appeals court after Biden admin lawsuit
Texas scored a victory on Monday when a federal appeals court upheld a state law requiring voters using mail-in ballots to include a state ID number or partial Social Security number. A three-judge panel reversed a district court's decision, saying unanimously that the law did not violate the Civil Rights Act of 1964, as some critics claimed, because it is material to confirm voter eligibility, as required under the statute. Judge James Ho began the unanimous opinion with a blunt statement, "Mail-in ballots are not secure," citing Veasey v. Perry, which later became Veasey v. Abbott. The case, later known as Veasey v. Abbott on appeal, involved Texas's voter ID law and included findings confirmed by the Fifth Circuit that "mail-in ballot fraud is a significant threat." READ THE COURT RULING – APP USERS, CLICK HERE: "The ID number requirement is obviously designed to confirm that each mail-in ballot voter is precisely who he claims he is. And that is plainly 'material' to 'determining whether such individual is qualified under State law to vote,'" Judge James Ho wrote in the opinion. Ho and the other judges on the panel aligned with their colleagues on the Third Circuit, which held that "the materiality provision applies only to voter qualification determination." He said the Third Circuit's analysis was "persuasive." Additionally, Ho notes that while the plaintiffs argue that "there isn't enough evidence to show the ID number requirement would meaningfully reduce voter fraud," the state disagrees on the matter. "Our precedents compel us to side with Texas. We have made clear that states have a legitimate interest in combating voter fraud, and thus enjoy 'considerable discretion in deciding what is an adequate level of effectiveness to serve [their] important interests in voter integrity,'" Ho wrote in the opinion. The Fifth Circuit — the same court that ruled in favor of Texas — has allowed for the tightening of voter rules in the past. Recently, judges with the Fifth Circuit ruled that mail-in ballots must arrive by Election Day to be counted, Politico reported. Texas' Election Integrity Protection Act of 2021 was signed in September of that year, following the 2020 presidential election. At the time, several Republican states began cracking down on voter identification. Additionally, according to the Texas Tribune, the law limited local control of elections by prohibiting counties from offering expanded voting options. Fox News Digital has reached out to the office of Texas Gov. Greg Abbott.
Newsweek
3 days ago
- Politics
- Newsweek
Trump Hails Major Court Win in Texas: 'Should be Nationwide'
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. President Donald Trump has welcomed a federal appeals court decision allowing Texas to enforce its 2021 law requiring voters to include an identification number with mail-in ballots, and called for similar measures across the United States. A three-judge panel of the U.S. Court of Appeals for the Fifth Circuit on Monday unanimously reversed a lower court ruling that had blocked the law. The panel concluded that the statute did not violate federal voting protections under the 1964 Civil Rights Act. Trump wrote on his social media platform Truth Social: "THIS IS GREAT NEWS!!! Should be Nationwide!!!" A 95-year-old World War II veteran stated that he had two of his mail-in ballots denied because of incomplete voter registration. However, he is unable to register online in his home state of Texas, and... A 95-year-old World War II veteran stated that he had two of his mail-in ballots denied because of incomplete voter registration. However, he is unable to register online in his home state of Texas, and as a result, may miss out on voting in the upcoming election for the first time in his life. More iStock/Getty Why It Matters The court's decision marks a significant win for Texas Republicans and could influence how elections are conducted in multiple states. Supporters, including Texas officials and Trump, argue that requiring ID numbers is a practical measure to prevent voter fraud and strengthen election security. Civil rights organizations counter that the law risks disqualifying legitimate ballots, particularly from elderly, disabled and minority voters who rely more heavily on mail-in ballots. Legal experts say the ruling could shape national debates on voting rights and regulations ahead of the 2026 midterm elections. What To Know The Fifth Circuit's decision overturns a 2023 ruling by U.S. District Judge Xavier Rodriguez, who had blocked the law, finding that ID numbers were not relevant to determining voter eligibility under Texas law. Monday's ruling allows the state to enforce the 2021 law requiring voters submitting mail-in ballots to provide either their driver's license number, state identification number, or the last four digits of their Social Security number. Ballots missing this information or containing mismatched numbers can be rejected by election officials. Civil rights groups including OCA-Greater Houston, the League of Women Voters of Texas and REVUP-Texas plus the Biden administration had challenged the law, saying that the requirements could cause legitimate ballots to be discarded due to minor administrative errors. Newsweek has contacted the OCA-Greater Houston, the League of Women Voters of Texas and REVUP-Texas for comment. The plaintiffs argued that rejecting ballots for missing or mismatched ID numbers violated the "materiality provision" of the 1964 Civil Rights Act, which states that no one can be denied the right to vote due to an error or omission that is not material to determining voter eligibility. The published opinion was authored by Trump appointees Judge James Ho and Judge Don Willett and Reagan appointee Judge Patrick Higginbotham. Judge Ho noted that requiring only names and addresses left the mail-in ballot system vulnerable to fraud because that information is publicly available, and stated that requiring ID numbers is material to confirming a voter's identity and eligibility. At the time Senate Bill 1 was signed into law, supporters—including Republican lawmakers and Texas Governor Greg Abbott—said the measure was essential to ensuring election security. Abbott said it "ensures trust and confidence in our elections system—and most importantly, it makes it easier to vote and harder to cheat." However, multiple fact-checking and academic studies suggest that documented incidents of mail-in ballot fraud are extremely rare. According to data from the Brennan Center for Justice, only 491 cases of absentee ballot fraud were identified between 2000 and 2012 out of billions of votes cast. What People Are Saying Judge James Ho wrote in the opinion: "The number-matching requirements are obviously designed to confirm that every mail-in voter is who he claims he is. And that is plainly material to determining whether an individual is qualified to vote." He added: "That information is easily available to anyone who simply requests it.... As a result, any person can request and receive that information about a registered voter, use that information to apply for a mail-in ballot, and then cast the ballot, with minimal risk of detection." What Happens Next Texas has some of the nation's strictest voting rules, allowing mail-in voting only for those over 65, individuals with disabilities, people in jail, or residents temporarily out of state. The 2021 identification number requirement adds another layer of verification for these ballots. The U.S. Department of Justice, which joined the lawsuit challenging the law, has not announced whether it will seek further review of the case.
Fox News
31-07-2025
- Politics
- Fox News
Apparent AI mistakes force two judges to retract separate rulings
Two U.S. judges in separate federal courts scrapped their rulings last week after lawyers alerted them to filings that contained inaccurate case details or seemingly "hallucinated" quotes that misquoted cited cases — the latest in a string of errors that suggest the growing use of artificial intelligence in legal research and submissions. In New Jersey, U.S. District Judge Julien Neals withdrew his denial of a motion to dismiss a securities fraud case after lawyers revealed the decision relied on filings with "pervasive and material inaccuracies." The filing pointed to "numerous instances" of made-up quotes submitted by attorneys, as well as three separate instances when the outcome of lawsuits appeared to have been mistaken, prompting Neals to withdraw his decision. In Mississippi, U.S. District Judge Henry Wingate replaced his original July 20 temporary restraining order that paused enforcement of a state law blocking diversity, equity and inclusion programs in public schools after lawyers notified the judge of serious errors submitted by the attorney. They informed the court that the decision "relie[d] upon the purported declaration testimony of four individuals whose declarations do not appear in the record for this case." Wingate subsequently issued a new ruling, though lawyers for the state have asked his original order to be placed back on the docket. "All parties are entitled to a complete and accurate record of all papers filed and orders entered in this action, for the benefit of the Fifth Circuit's appellate review," the state attorney general said in a filing. A person familiar with Wingate's temporary order in Mississippi confirmed to Fox News Digital that the erroneous filing submitted to the court had used AI, adding that they had "never seen anything like this" in court before. Neither the judges' office nor the lawyers in question immediately responded to Fox News Digital's requests for comment on the retracted New Jersey order, first reported by Reuters. It was not immediately clear if AI was the reason for that erroneous court submission in that case. However, the errors in both cases — which were quickly flagged by attorneys, and prompted the judges to take action to revise or redact their orders — come as the use of generative AI continues to skyrocket in almost every profession, especially among younger workers. In at least one of the cases, the errors bear similarities to AI-style inaccuracies, which include the use of "ghost" or "hallucinated" quotes being used in filings, citing incorrect or even nonexistent cases. For bar-admitted attorneys, these erroneous court submissions are not taken lightly. Lawyers are responsible for the veracity of all information included in court filings, including if it includes AI-generated materials, according to guidance from the American Bar Association. In May, a federal judge in California slapped law firms with $31,000 in sanctions for using AI in court filings, saying at the time that "no reasonably competent attorney should out-source research and writing to this technology — particularly without any attempt to verify the accuracy of that material." Last week, a federal judge in Alabama sanctioned three attorneys for submitting erroneous court filings that were later revealed to have been generated by ChatGPT. Among other things, the filings in question included the use of the AI-generated quote "hallucinations," U.S. District Judge Anna Manasco said in her order, which also referred the lawyers in question to the state bar for further disciplinary proceedings. "Fabricating legal authority is serious misconduct that demands a serious sanction," she said in the filing. New data from the Pew Research Center underscores the rise of AI tools among younger users. According to a June survey, roughly 34% of U.S. adults say they have used ChatGPT, the artificial intelligence chatbot — roughly double the percentage of users who said the same at the same point two years ago, in 2023. The share of employed adults who use ChatGPT for work has spiked by a whopping 20 percentage points since June 2023; and among adults under 30, adoption is even more widespread, with a 58% majority saying they have used the chatbot.
