If you’re looking to remain anonymous in your cryptocurrency transactions, there are services out there that will help you. These are called tumblers or crypto mixers, and they work by obscuring the direct link between your on-chain transaction and your wallet address. This is a great way to protect your privacy and reduce the risk of theft or fraud, but they’re not foolproof and can be used by malicious actors who want to find out more about your financial activity.
The concept behind a tumbler is simple. You send your bitcoin to a third-party service that mixes your coins with those of other users before returning them to you. This obscures the source of your coins, and makes it difficult for blockchain analysis tools to track the origin of your digital assets. This is why tumblers have become a popular way to enhance the anonymity of cryptocurrency transactions.
Unfortunately, tumblers have also been used to hide illegal activities, and some of them have come under fire from regulators such as the Office of Foreign Assets Control (OFAC). A recent example was when the US Treasury Department sanctioned the tumbling service Tornado Cash.
As a result, there are now many tumblers that are operating on peer-to-peer networks that use a community of users to mix their transactions. While these networks can be more complicated to set up, they have the advantage of being less likely to fall under OFAC scrutiny. Crypto Tumbler