Cryptocurrencies, e.g., Bitcoin, have emerged as a significant funding channel for numerous criminal activities due to its globalization and anonymity. Mixing services further enhance the anonymity of transactions and have become a crucial and indispensable component in many criminal acts. In this paper, we conduct an analysis of the vital role played by mixing services in criminal activities via many cases. We provide an overview of the working principles of mixing services and the major advancements in anti-anonymization techniques. Based on this analysis, we further examine and compare the existing regulatory mechanisms for Bitcoin mixing services. Our findings indicate that mixing services currently exist in a regulatory gray area, posing a significant potential threat to financial security. To address this issue, we propose several regulatory measures, including clarifying the regulator, determining the legal responsibilities of users and providers of mixing services, establishing a comprehensive technical regulatory system, and strengthening international cooperation. These measures aim at promptly detecting and mitigating the major threat to financial security posed by mixing services.