New Crypto Worry – How “Tumbling” Can Hide Crypto Transaction History/Allow Businesses to Work with Russia

Blockchain, News, Opinion | March 31, 2022 By:

A “Tumbler” is essentially a tool used to hide the blockchain history of a coin by passing it through a series of exchanges and effectively “resetting” the blockchain. According to Rance Masheck, CEO of iVest+, an innovator in trading platforms for educators and retail investors, there is nothing illegal about this process, and it effectively creates a clean “path” between where the coin originated and how it moved along the way.

There are no laws prohibiting tumbling, and for a cost somewhere between about 0.25% and 3% depending on the size of the transaction and the system that does the tumbling, Bitcoins can be owned legitimately without a history. This makes it harder, of course, to trace how the coins were spent along the way.

In theory, this is the same as having cash money. You can buy a TV from your friend via cash and then that person buys a set of hardware tools from another friend and then they in turn buy drugs with the cash. There is no way to know how the cash went from the first person to the last in the chain. In theory, with bitcoin, that history exists, but the point of tumbling would be to get rid of the history.

What needs to be investigated by regulators very thoroughly, especially in light of the situation in Ukraine with Russia, is how tumbling could make it hard to tell if entities are doing business with sanctioned individuals. Expect to hear more about tumbling in the weeks ahead.