How Centralized Exchanges Became The Most Common Crypto Mixers

By Awa Sun Yin, Co-founder of Anoma & Namada

Centralized exchanges are becoming an increasingly popular method to achieve a level of privacy among users. If this sounds counterintuitive it’s because it is; we’ve been “schooled” to think that decentralization is the way to go for privacy. So why — and how — did we get to the place where the average user turns centralized exchanges into crypto mixers?

The most common misconception about crypto is that it provides total anonymity. If you go fully decentralized, according to this belief, it is possible to conduct all sorts of financial transactions without leaving a trace, a la Mr. Robot. So, why does everyone not just open a MetaMask wallet and go completely off the grid?

Because, in reality, most decentralized blockchains provide pseudonymity, not anonymity. And, it has a quite different take on privacy. Pseudonymity enables creating a decentralized wallet and sending or receiving crypto assets on different blockchain networks without sharing personal information. However, staying below the radar of the government or intermediaries comes at a cost.

Each transaction leaves an immutable mark on the blockchain that contains wallet address info, and it takes mere seconds for the user at the other end of a…