What Are Coin Mixers and How Do They Work? – Decrypt

Coin mixers have captured the eye of each the cryptocurrency group and regulators because the battle for privateness ramps up.

In 2021, the founding father of coin mixer Bitcoin Fog was arrested on costs together with cash laundering and working a cash transmission enterprise with no license.

A yr later, the U.S. Treasury Division issued sanctions towards Twister Money, an Ethereum coin mixing service, successfully banning People from utilizing it.

In a landmark ruling in November 2024, the U.S. Fifth Circuit Courtroom dominated that the Treasury had overstepped by sanctioning Twister Money’s good contracts, though its broader designation remained intact.

In a reversal of its 2022 choice, the Treasury introduced in March 2025 that it had delisted Twister Money from its listing of events sanctioned by the Workplace of International Belongings Management, or OFAC.

However what do coin mixers like Twister Money and Bitcoin Fog do—and why do folks use them? On this article, we’ll look at the know-how behind mixers and their reliable and illegitimate makes use of.

What’s a coin mixer, and why use them?

A coin mixer is a service that enables customers to obfuscate the origin and vacation spot of transactions. Customers ship cryptocurrency to the service, have that crypto blended with different cash or tokens, after which ship the equal quantity of “blended” cash to a recipient deal with, hiding the connection between the sender and recipient.

There are various reliable makes use of for this type of service. Simply as chances are you’ll not need your employer to know the intimate particulars of each financial institution or bank card transaction that you have ever made, you might also not need your employer—or anybody else, for that matter—to know each element of each crypto transaction you have ever made both.

However because the adoption of crypto and blockchain instruments grows, real-world identities have gotten more and more linked to blockchain addresses—with each buy, switch, or interplay related to these addresses laid naked on a public, clear, distributed ledger. And that is the place coin mixers are available in.

Nonetheless, this capacity to masks the id of wallets and obfuscate transactions makes coin mixers a pretty instrument for cybercriminals, and thus a goal for regulation enforcement.

Whereas politicians and regulation enforcement have railed towards the usage of cryptocurrency in prison enterprises, coin mixers occupy a grey space between facilitating cash laundering and preserving the best to privateness. Due to blockchain’s permissionless and clear nature, some crypto customers depend on the added privateness that coin mixers present.

Privateness advocates argue that coin mixers are particularly helpful, even essential, in circumstances the place an individual’s actions—like journalism, civil disobedience, and protest—can put that particular person in danger. Due to this, they require larger privateness of their crypto transactions.

Alternatively, regulation enforcement and authorities businesses see coin mixers as a method for criminals to launder cash utilizing cryptocurrency, and companies like Twister Money as a method of obscuring the place the funds originated.

In its announcement of the sanctions towards Twister Money, the Treasury Division stated that criminals had used Twister Money to launder cash, saying the service processed greater than $7 billion price of digital forex since its creation in 2019. In response to blockchain analytics agency Elliptic, round $1.5 billion of that determine was linked to illicit exercise.

Amongst these illicit funds, the Treasury stated, have been a mixed $103.8 million stolen from crypto bridging companies by Lazarus Group, a state-sponsored North Korean cybercriminal group.

A November 2024 ruling by the U.S. Fifth Circuit Courtroom discovered that the Treasury had overstepped its authority, and that Twister Money’s immutable good contracts “should not property as a result of they don’t seem to be able to being owned.” The choice reversed a decrease court docket ruling, noting that protocols constructed on good contracts can’t be categorized as companies as a result of they function with out “human intervention.”

In March 2025, the Treasury reversed course, eradicating Twister Money from its listing of sanctioned entities. “Primarily based on the Administration’s assessment of the novel authorized and coverage points raised by use of monetary sanctions towards monetary and industrial exercise occurring inside evolving know-how and authorized environments, we have now exercised our discretion to take away the financial sanctions towards Twister Money as mirrored in Treasury’s Monday submitting in Van Loon v. Division of the Treasury,” the Treasury stated in a press release.

A month later, a federal court docket dominated that the Treasury’s actions have been “illegal,” completely barring OFAC from reinstating sanctions towards Twister Money. Decide Robert Pitman, of The U.S. District Courtroom for the Western District of Texas, positioned an order compelling the Treasury to be “completely enjoined from implementing” sanctions on the coin mixer, delivering a convincing victory for privateness advocates.

In July 2025, the united statesCourt of Appeals for the Eleventh Circuit dismissed an attraction filed by crypto advocacy group Coin Heart, during which it argued that the Treasury Division had exceeded its statutory authority in sanctioning Twister Money. The court docket granted a joint movement to vacate the judgement and remand with directions to dismiss, with each events agreeing that the attraction was “moot” following OFAC’s March choice to take away sanctions towards the coin mixer.

In August 2025, Twister Money developer Roman Storm was discovered responsible of working an unlicensed cash transmitter by a Manhattan jury—although costs of cash laundering and sanctions evasion failed to stay. The jury’s failure to agree on all costs might pave the best way for a possible retrial.

Examples of coin mixers

Twister Money: Based in 2019 by Alexsey Pertsev and Roman Storm, this mixer was sanctioned by the U.S. Treasury Division in 2022. Twister Money completely companies the Ethereum Community and is non-custodial.
Samourai Pockets: A non-custodial Bitcoin-only mixer based in 2015 by Keonne Rodriguez and William Longergan Hill, its founders have been arrested and charged with conspiracy to commit cash laundering in 2024.
Wasabi Pockets: Based by pseudo-anonymous zkSNACKs in 2018, it makes use of the ZeroLink protocol to create transaction privateness. Wasabi blocked U.S. residents from utilizing the mixer in 2024 after the founders of Samourai Pockets have been arrested.
Bitcoin Fog: Based in 2011 by Roman Sterlingov, Bitcoin Fog was a custodial mixer, and held consumer funds within the course of of blending them. Sterlingov was convicted of cash laundering in 2024.

How do coin mixers work?

Earlier than Twister Money was taken down, it used good contracts to just accept token deposits from one deal with and allow their withdrawal from a distinct deal with.

Different coin mixers function in an analogous method, with good contracts that work as a pool the place all of the deposited tokens get blended collectively. When funds are withdrawn from these swimming pools, the on-chain hyperlink between the supply and the vacation spot is damaged, anonymizing the transaction.

These sorts of coin mixers are sometimes non-custodial, which means there isn’t a third-party management of the pockets and funds, merely the creation of the good contracts.

As a result of these companies use no middleman, they’re reliably impartial—however that additionally means they could be a tempting instrument for cybercriminals seeking to launder stolen crypto, as within the case of Lazarus Group.

Coin mixers: a timeline

October 2011: Bitcoin tumbler Bitcoin Fog is launched.
December 2019: Coin mixer Twister Money is launched.
April 2021: The U.S. Division of Justice publicizes the arrest of Bitcoin Fog operator Roman Sterlingov.
August 2022: The U.S. Treasury Division sanctions Ethereum coin mixer Twister Money. Days later, developer Alexey Pertsev is arrested in Amsterdam on cash laundering costs.
March 2024: Bitcoin Fog operator Roman Sterlingov is convicted of cash laundering.
April 2024: U.S. authorities arrest and cost the founders of Bitcoin mixer Samourai Pockets, accusing them of conspiracy to commit cash laundering.
Might 2024: Wasabi Pockets publicizes the preemptive closure of its mixing service, banning U.S. clients from utilizing its companies. Concurrently, Phoenix Pockets pulls its app from shops within the U.S., whereas {hardware} pockets Trezor publicizes the discontinuation of its Coinjoin characteristic.
November 2024: The U.S. Fifth Circuit Courtroom guidelines that Twister Money’s immutable good contracts can’t be categorized as “property.”
March 2025: The U.S. Treasury lifts its sanctions towards Twister Money.
April 2025: A U.S. federal court docket decide points an order completely blocking the Treasury from reinstating sanctions towards Twister Money.
July 2025: A U.S. Courtroom of Attraction grants a joint movement to finish crypto advocacy group Coin Heart’s attraction towards OFAC’s sanctions.
August 2025: Twister Money developer Roman Storm is discovered responsible of a conspiracy to function an unlicensed cash transmitter, although the jury failed to succeed in a verdict on cash laundering and sanctions evasion costs.

Official use circumstances of coin mixers

Let’s say there’s a enterprise proprietor and crypto fanatic named Robert who desires to ship Ethereum to a hacktivist group working out of Ukraine. Robert does not need his donation to be traced again to him, so he makes use of a coin mixer.

Robert goes to the coin mixer web site and deposits the Ethereum he desires to donate. The despatched quantity is deposited into the mixer’s good contract and pooled with the opposite hundred, hundreds, and even tens of millions of transactions already in its pool. After receiving affirmation that the deposit was profitable, Robert goes to the withdraw tab, enters the recipient’s deal with into the mixer, and sends the Ethereum from the mixer.

The Ethereum is then despatched from the blending to the recipient. On the receiving finish, the deal with proven is that of the mixer and never the unique sender’s deal with, anonymizing the transaction.

If this hypothetical state of affairs sounds acquainted, it is primarily based on a tweet from Ethereum co-founder Vitalik Buterin, posted after the Treasury Division sanctioned Twister Money.

The way forward for coin mixers

The talk over crypto privateness continues to rage, regardless of the sequence of authorized circumstances and sanctions towards coin mixers.

The November 2024 ruling that immutable good contracts can’t be categorized as “property” was hailed by crypto and privateness advocates as a landmark second, which means that self-executing code that operates with none administrative management can’t be topic to sanctions.

Newer tasks like Railgun goal to offer customers on-chain privateness, but in addition make sure that they continue to be compliant within the eyes of the regulation.

Railgun will not be a standard mixer; it doesn’t combine cash from a number of sources collectively, and its founders consider it avoids the pitfalls that finally led to mixers getting sanctioned or sued.

It additionally makes use of “Non-public Proof of Innocence” to make sure unhealthy actors can’t use the platform for illicit functions. For instance, on July 11, 2024, a infamous crypto drainer often called Inferno Drainer tried to make use of Railgun to launder 174 ETH. Nonetheless, Railgun recognized that the pockets was tied to a foul actor and blocked the transactions.

Whether or not crypto privateness tasks’ efforts to create legally compliant mixing companies will mollify lawmakers is open to debate. One factor’s for sure, although—privateness advocates will proceed to combat to make sure that crypto is not a panopticon.

As Lia Holland, Campaigns & Communications Director at Struggle for the Future, wrote in 2022: “Allow us to be clear, hackers and cybercriminals, in addition to those who help them, are deplorable and ought to be stopped—however not in a method that compromises human rights and the primary modification.”

This text was first written in August 2022 and up to date in August 2025.