Crypto Mixers Are Making Headlines

With crypto mixers, specifically Tornado Cash, increasingly under regulatory scrutiny, facing sanctions, and generally attracting the wrong kind of attention, it seems like an appropriate time to objectively look at these services. Namely, what exactly doe crypto mixers do, why would individuals or institutions seek to use these services, and what are the potential legal and regulatory implications of doing so? As with most everything else in the cryptoasset space, investors and users of these products and services should conduct due diligence on the service itself, who else utilizes said service, and examples of how previous issues have been resolved.

In other words, this is a prime example of what it is important to always conduct robust due diligence.

For the purposes of this conversation the focus will be on noncustodial crypto mixers, which can make it more difficult for regulators to take action against bad actors, but also reduce the risk for users of these services. Due to the fact that the cryptoassets are never held by a trusted third party or other entity, and instead are handled entirely by smart contracts and the underlying blockchain the risk of theft by unethical actors is reduced.

Let’s take a look at some of key questions and considerations that investors and regulators alike should keep in mind when discussing, assessing, or potentially using crypto mixers.

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