CoinJoin, a bitcoin (BTC) mixing service that allows users to improve transaction anonymity and privacy by mixing multiple transactions, has announced that it will begin blacklisting illicit transactions.
The blacklist targets unspent transaction outputs, or UTXOs, the announcement notes.
More precisely, ” zkSNACKs coordinator will start denying some UTXOs to sign up for coinjoins “Wasabi Wallet tweeted Sunday night.
The zkSNACKs coordinator will start refusing certain UTXOs from registering to coinjoins. pic.twitter.com/X3kBuQwieO
— Wasabi Wallet (@wasabiwallet) March 13, 2022
“Do not cooperate with the authorities”
Wasabi is an open-source privacy-focused bitcoin wallet, with CoinJoin a tool from the wallet team aimed at ensuring the fungibility of BTC transactions.
By using the zkSNACKs coordinator, multiple BTC transactions of similar amounts are mixed together and essentially masked in order to make it difficult to trace the blockchain. In this case, criminals can easily “wash” the stolen funds.
Blocking illicit or flagged transactions aims to prevent these washout episodes, which have garnered a lot of attention from blockchain analytics and security companies.
According to a developer associated with Wasabi and CoinJoin, known as Rafe on Twitter, the decision to block said transactions only applies to the zkSNACKS validator. He noted in a tweeted response that Bitcoin users can still access mixing services through other coordinators.
A) Its not a joke
B) No one is happy about it
C) Company has the right to exclude troublemakers
D) Coordinator code is open-source, so everyone can run it
E) Certain use cases were prohibited by T&C but it was not enough
E) Instead of demanding, improve and take over the market https://t.co/EMzFUb78wI— Rafe ?⚡?? (@BTCparadigm) March 14, 2022
He also noted that CoinJoin has not partnered with Chainalysis to flag “suspicious” UTXOs. On suggestions, the authorities could have “infiltrated” the services, the developer said :
” Nobody infiltrated Wasabi, since we wouldn’t be having this conversation if they were. There is no need to spy when banning entries .
BTC Joint “Unmixed” Alleged Chainalysis Report
Attention to the potential use of cryptography in illegal transactions has existed since the early days of Bitcoin, with recent hacks and ransomware attacks compounding this problem. Sanctions against Russia and the potential for oligarchs to attempt to circumvent embargoes via crypto have also shed some light on the sector.
However, recent data and reports suggest that cash remains the main channel for illicit transactions – money laundering, drug trafficking and terrorist financing.
Chainalysis is a blockchain security and analytics company that recently claimed to have unmasked the identity of the individual who hacked the DAO in 2016. The company allegedly did this by “unmixing” BTC transactions and tracing them back to an IP address and the suspect’s wallet.