Some see this not as a feature but as a privacy flaw. To overcome this, they use a Bitcoin mixer, also known as a glass, to make transactions completely private, meaning they hide who has sent what to whom. This is the basis for trust in Bitcoin and, consequently, its value in the eyes of users. However, the use of Bitcoin itself is pseudonymous, not anonymous.
This opens up opportunities for several intruders who want to find out who is the owner of the digital funds in specific wallets, which usually contain large amounts of cryptocurrencies, or who want to trace a specific person's finances and their origins. All a public explorer will show is that person A sent some bitcoins to a mixer, as did a dozen other people, and that person B received some bitcoins from a mixer, as did a dozen other people. The idea is that when shuffling bitcoins in a black box, it's hard to figure out that person A sent 10 bitcoins to person B. It's unlikely that anyone else at the mixing desk sent the exact amount of bitcoins than you, minus the drum fee.
While they offer a simple solution to the fall of bitcoin, they also represent a challenge to privacy, since, although the links between “incoming” and “outgoing” bitcoins will not be public, the mixer itself will continue to have a record that connects transactions. The ability to obfuscate bitcoin transactions makes mixers an obvious hotbed of money laundering, attracting people such as tax evaders and criminals interested in hiding the proceeds of illegal activities. Centralized mixers receive cryptocurrency from users to the mixer and return different cryptocurrencies for a fee. According to Cathcart, subjecting mixers to anti-money laundering laws would ensure that mixing services carried out comprehensive anti-money laundering controls and audited all transactions that go through the mixer.
This means that users cannot use their funds after mixing them without being tracked by market participants, since transactions withdrawn from a mixer are marked and go against the logic of using a mixer in the first place. That's why Bitcoin SV is designed to fully comply with national financial regulations, since Bitcoin must be so to survive. The way cryptocurrency mixers work is that they break down the funds sent with the mixer and mix them with other transactions.
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