Bitcoin's big secret: How cryptocurrency became law enforcement's secret weapon

Original Article ↗ Hacker News Discussion ↗

Privacy coins vs. Bitcoin

  • Many argue that Bitcoin is poorly suited for privacy; Monero is repeatedly cited as “how people think Bitcoin works” and closer to what Bitcoin’s creator allegedly wanted.
  • Monero’s default privacy and investigation difficulty are seen as the reason it’s being delisted from major exchanges and why law enforcement prefers transparent chains.
  • Zcash is debated: optional privacy and centralized governance make some see it as weaker or more institution-friendly than Monero, though others value its roadmap and usability.

Cashing out and anti–money-laundering (AML) friction

  • The hardest part for criminals isn’t moving crypto, but converting it to fiat anonymously and then using that money in the regulated economy.
  • KYC exchanges like Kraken can still be used to “launder source” (but not evade taxes), as regulators mainly see the exchange entry point, not prior history.
  • P2P and non-KYC exchanges, in-person cash trades, and informal markets are mentioned as off-ramps, but with more scam risk and legal exposure.

Mixers, tumblers, and legality

  • Mixers/tumblers are contested: some claim using them is “basically always illegal”; others reply that, in systems like US law, tools are legal unless specifically criminalized, and illegality lies in intent (money laundering).
  • Tornado Cash and similar services illustrate how sanctions and enforcement can shift rapidly and possibly be used to co-opt or deanonymize services.

Bitcoin transparency, “secrets,” and naivety

  • Several commenters say blockchain traceability has been obvious “for a decade” and only surprises naive or misinformed criminals who still believe Bitcoin is anonymous.
  • The article’s “secret weapon” framing is dismissed as clickbait; transparent ledgers are a core design choice, not a hidden feature.

Fungibility, taint, and surveillance

  • Large subthread debates whether Bitcoin is truly fungible when some coins are “tainted” by association with hacks or crime and thus worth less or blocked by exchanges.
  • Comparisons are drawn to US dollars: in principle fungible, but specific bills or account locations can carry different risk or value due to sanctions, serial tracking, or KYC.
  • Some see increasing chain surveillance and “taint” analysis as effectively turning Bitcoin into a highly centralized, surveilled payment record.

Community, research, and regulation

  • Commenters note a perceived anti-crypto bias on HN and lack of overlap with cutting-edge Bitcoin privacy research (e.g., Lightning privacy, wallet techniques).
  • EU and US moves against privacy coins and mixers are discussed as part of a broader trend toward tighter financial surveillance; VPNs and alternative jurisdictions are seen as partial but fragile workarounds.