Crypto Asset Protection

Tumblers/ Mixers

Cryptocurrency mixers function by combining the digital assets of various users. Upon a user’s cryptocurrency transfer to the mixer, it merges with a collective fund formed by contributions from multiple users. Subsequently, the mixer disburses an equivalent amount of cryptocurrency to a new address under the user’s control. However, the outgoing funds originate from a blend of assets within the pool, creating complexity in tracing the transaction to any specific user.

To explain it in simpler terms using a simple analogy, imagine you have a plastic cup and a collection of pennies from both your wallet and your friend’s wallet. Now, pour all the pennies into the cup and give it a good swirl. Then, return to each person the same number of pennies they initially contributed. However, the individual coins they receive will likely be different from the ones they initially gave. This is precisely what crypto tumblers and mixers do, whether you’re dealing with Bitcoin, Ethereum, or stablecoins.

While the mentioned methods remain legal, Tornado Cash faced closure by the Treasury in August 2022. One of the concerns with coin mixers like Tornado Cash (TORN) is that the coins processed are “tainted”, making them traceable back to the tumbler. If a mixer gets blacklisted, the blockchain’s transparent ledger storing all transaction details will show that a Bitcoin went through a tumbler. This is how USDC processed through TORN led to freezing by exchanges. Circle, the USDC issuer, went beyond by freezing funds linked to blacklisted addresses from the app.

Delay in Payments

To address this issue with coin mixers, one potential solution is to introduce a delay in payments. However, it’s important to note that this method is effective primarily for cryptocurrencies that prioritize user privacy, such as Monero. The postponed payments feature allows users to delay the transfer of their anonymous coins for a specific duration, which can range from a few hours to several days, depending on the specific mixer used. The primary purpose of this delay is to significantly complicate the efforts of blockchain experts attempting to trace the origin and destination of these coins.

When a user opts for a mixer offering postponed payments, their coins are temporarily held in a pool for the designated delay period. During this time, the mixer can merge these coins with those from other users, creating a larger pool of anonymized coins. Once the delay period comes to an end, the mixer then distributes the mixed coins to their intended destinations.

By introducing this delay in coin transfers, mixers can effectively thwart blockchain analysts from tracking the path of these coins.

Chain-Hopping

A more effective but somewhat expensive method is called chain hopping. The idea behind chain hopping is to add an extra layer of security to the mixing process by not relying on a single blockchain network. Instead, the mixing service uses multiple blockchain networks and hops from one network to another to blend the funds. This technique makes it challenging for anyone to trace the funds, even if they know the initial source of the cryptocurrency.

In layman terms, imagine you’re driving a car on a highway with multiple exits, switching from one highway to another and changing your vehicle’s appearance along the way, say at a parking lot.

First, you pull over to a parking lot (a different wallet) on the same highway, where you exchange your unique car (convert your cryptocurrency) for a new one (a different cryptocurrency). Then, you re-enter the highway, but now you’re driving an entirely different car (using a different blockchain network). This new car is unrecognizable compared to your original one.

Now, even if someone had spotted your initial car and noted its details, they won’t be able to follow you on this new highway because you’re driving an entirely different vehicle. In a real-world scenario, exiting the highway with a new car would be challenging due to toll booths recording your entry and exit. However, crypto cross-bridges have addressed this issue, allowing your “new car” to smoothly transition to a different road. Chain hopping makes it exceedingly challenging for anyone to track your journey from start to finish, just like taking different highways and switching cars along the way would make it nearly impossible for someone to follow you throughout your trip.

Peel-Chains

“Peel chains” or payment splitting is a technique that breaks down a large transaction into smaller ones sent to different addresses to make it more challenging for anyone to trace the funds’ origin and destination.

To explain payment splitting, think of it as someone sending a secret message in World War Two through multiple postcards. Imagine you have an important message (representing a large transaction) that you want to send to the Resistance without anyone knowing the full content or its destination. Instead of writing the entire message in one letter, you break it into smaller parts and send each part on a separate postcard.

For instance, if you had a 10-part message, you would send each part on a different postcard from various addresses (similar to how a mixer splits a transaction into multiple smaller transactions sent to different addresses). This approach makes it much tougher for anyone to piece together the full message or track its route.

The advantage of payment splitting is that it adds an extra layer of security and privacy. Even if someone were to intercept one postcard (or one transaction), they would only have a fragment of the complete message (or payment), making it nearly impossible to figure out the entire story or where the remaining parts went. The downside is the cost, as you must pay a “stamp fee” (transaction fee) for each postcard sent.

For the past decade, banks have been driven by global regulatory pressures to “de-bank” unfavorable customers. This was first put into play by then-sitting president Barack Obama and his well-known Operation Chokepoint 1.0, where the White House pressured banks to terminate service with certain legal, yet “unfavorable to the administration” businesses. Joe Biden, then Vice president and now acting as President, has continued in his former boss’ footsteps with Operation Chokepoint 2.0, which since 2021 has de-banked multiple crypto businesses.

With the advent of the Markets in Cryptoassets (MiCA) regulation within the European Union, Centralized Crypto Exchanges will face stringent measures. By December 30, 2024, they will be mandated to track transfers of crypto-assets exceeding €1,000, ushering in an era of heightened scrutiny and more Know Your Customer protocols. For example, MiCA regulations will introduce a daily transaction cap of €200 million for private stablecoins like USDT & USDC. For context, Binance’s current Tether trading volume against Bitcoin alone (not counting other trading pairs) is at $2 billion- 10 times more than future transaction limits.

Numerous trading platforms, including Binance, Gemini, Kraken, and Coinbase, have encountered substantial government regulation, leading to the suspension of operations in various European nations. Traders who find themselves without accounts often resort to hopping to a different exchange , yet this is approach proves unfavorable due to the high probability of continued government crackdowns in countries that have already banned specific platforms. In light of the imminent introduction of Central Bank Digital Currencies (CBDC) and a monetary reset, our strategy is to move accounts offshore, and more importantly, own nothing and control everything. Because what you do not own cannot be taken away from you.

At Crypto Asset Protection, our solutions are designed to adapt to the forthcoming decade characterized by regulation, warfare, technocracy, and the Great Reset. The 2020-2022 Crypto Bull market showed the inevitable trend- central banks will never allow private non-bank companies to control their own money. Centralized exchanges will keep getting regulated, and the only way to participate in the future crypto market is to anonymize your trading.

Recent episodes of de-banking, swift lockdowns and stay-at-home orders trapped those without a portable wealth or contingency plans. If you believe that these technocratic systems can and will be implemented in the near future, proactive steps can safeguard your crypto assets, securing personal freedom for you and your family.

Our team comprises individuals with direct experience living under Communist regimes, navigating financial constraints, monetary limitations, and pervasive surveillance. We’re committed to guiding you through digital age restrictions and lockdowns, assisting in relocating your family, business, and assets to jurisdictions that prioritize freedom.

To learn more about Navigating the New Normal, visit us at https://onlineresetadvisors.com.