Mixer
A service that pools and redistributes funds from many users, intended to obscure the link between a deposit and a later withdrawal.
A mixer is a service that pools deposits from many different users together and redistributes withdrawals from that shared pool, intended to obscure the direct link between a specific deposit and a specific later withdrawal.
Mixers have drawn significant regulatory scrutiny specifically because the same privacy-obscuring function that protects legitimate users' financial privacy can also be used to launder funds from theft or other illicit activity — several real, well-documented enforcement actions have targeted specific mixing services on exactly this basis. CoinJoin (see Kaavon's "CoinJoin" glossary definition) is a related but structurally different, non-custodial approach to the same general privacy goal.
Examples
- A mixer's pooling function is what obscures the link between a specific deposit and withdrawal, the same general goal CoinJoin pursues through a different, non-custodial method.
- Several real mixing services have faced regulatory enforcement action specifically over their use in laundering funds from theft and other illicit activity.