The move follows U.S. authorities targeting privacy protocols and non-custodial wallets.<\/p>\n
Wasabi Wallet, a popular Bitcoin wallet, will no longer offer its Coinjoin feature,\u00a0a service providing\u00a0privacy for on-chain transactions.<\/p>\n
Announced on May 2, ZkSNACKS, the development team behind Wasabi Wallet, said it will discontinue support for Coinjoin transactions from June 1. The team alluded to increasing regulatory hostility towards cryptocurrency privacy protocols from U.S. authorities as the primary motivation behind its decision.<\/p>\n
\u201cAfter years of relentless dedication to improve\u00a0Bitcoin\u2019s\u00a0privacy, zkSNACKs\u2026 is shutting down its Coinjoin coordination service,\u201d\u00a0the blog post\u00a0said<\/a>.\u00a0“We have always made efforts to operate under legal clarity. At this point, we need to regain more certainty before moving forward.\u201d<\/p>\n Moving forward, the Wasabi wallet will solely function as a non-custodial Bitcoin wallet without offering Coinjoin transactions, meaning users can continue to create wallets and transfer assets using the protocol.<\/p>\n \u201cWasabi Wallet is a free and open-source software and will continue to be maintained,\u201d\u00a0zkSNACKS said.<\/p>\n Coinjoin describes a process combining multiple Bitcoin transactions to obfuscate the flow of funds and provide privacy to users transacting on-chain. The technique was first\u00a0articulated<\/a>\u00a0by Greg Maxwell, an early Bitcoin\u00a0developer,\u00a0in 2013.<\/p>\n \u201cA\u00a0Coinjoin is a special Bitcoin transaction where several peers get together\u00a0to literally join their coins in a single transaction,\u201d\u00a0Wasabi\u2019s\u00a0documentation\u00a0said<\/a>.\u00a0\u201cThe goal is to gain privacy by breaking the link of which input\u00a0\u2018pays\u2019\u00a0which output so that none of the outputs can\u00a0be attributed\u00a0to the\u00a0owner of the input.\u201d<\/p>\n Third-party wallet clients that previously offered Coinjoin transactions via Wasabi will also be unable to\u00a0offer\u00a0the service, including the popular hardware\u00a0wallet, Trezor<\/a>,\u00a0and the payment\u00a0processor, BTCPay<\/a>.<\/p>\n Wasabi\u2019s\u00a0decision to abandon its Coinjoin features comes as on-chain privacy protocols are\u00a0increasing<\/p>\n In August 2022, the U.S. Treasury Department\u00a0took the unprecedented action of adding Tornado Cash<\/a>, a popular Ethereum-based privacy protocol, to its sanctions list, making it illegal for U.S. residents to interact with Tornado Cash.\u00a0<\/p>\n The move came in response to\u00a0Lazarus Group<\/a>, the North Korean state-sponsored hacking organization, increasingly adopting Tornado Cash\u00a0as a means\u00a0to launder stolen crypto assets.<\/p>\n In November, the Treasury Department followed up by sanctioning\u00a0Sinbad<\/a>, another cryptocurrency mixer implicated in enabling North Korean money laundering activities.\u00a0\u201cMixing services that enable criminal actors, such as the Lazarus Group, to launder stolen assets will face serious consequences,\u201d\u00a0said Deputy Secretary of the\u00a0Treasury,\u00a0Wally Adeyemo.<\/p>\n On April 24, the U.S. Department of Justice\u00a0charged<\/a>\u00a0the two founders of the popular privacy-focused Bitcoin wallet Samourai with money laundering and unlicensed money-transmitting offenses. <\/p>\n The DoJ accuses the pair of facilitating $2 billion in illicit transactions and laundering $100 million in criminal proceeds from darknet marketplaces. They now face sentences of up to 20 years and five years imprisonment\u00a0respectively.<\/p>\n ZkSNACKS\u2019\u00a0move to discontinue Coinjoin also follows the project\u00a0blocking<\/a>\u00a0U.S. residents from accessing its website and wallet on April 27.<\/p>\n The team attributed the move to concerns of a broader crackdown on non-custodial wallets from U.S. authorities. ZkSNACKS alluded to the\u00a0Wells Notice<\/a>\u00a0that the U.S. Securities and Exchange Commission (SEC) issued to Consensys, the company behind the popular MetaMask wallet on April 26. A Wells Notice proceeds the filing of a formal legal complaint.<\/p>\n \u201cIn light of recent announcements by U.S. authorities,zkSNACKs is now strictly prohibiting U.S. users from using its services,\u201d\u00a0zkSNACKS said.<\/p>\nWar on privacy<\/h2>\n
Non-custodial crackdown?<\/h2>\n