I would love to have a general conversation around mixers and if they are legal. I've heard both sides. Would be great to have someone involved in the legal side of things like Ciphertrace or a regulator to shed light on this topic
Mixing services aren't
illegal, but regulators are beginning to argue that they fall under money transmission laws.
FinCEN published guidance in May that deems centralized mixers as money transmitters:
An anonymizing services provider is a money transmitter under FinCEN regulations. The added feature of concealing the source of the transaction does not change that persons status under the BSA.
To comply with the BSA, a mixer would need to register as an MSB with FinCEN and regularly file currency transaction and suspicious activity reports. That would require AML/KYC procedures.
To date, I believe no mixer has complied with the guidance so under US regulations, they are technically acting illegally.