zkSNACKs CEO Clarifies CoinJoin Shutdown

The decision to discontinue the CoinJoin transaction anonymization service was made to ensure compliance with U.S. regulatory standards, according to Max Hillebrand, CEO of zkSNACKs, the company behind the service, in an interview with Cointelegraph.

He stated that shutting down the service was a necessary step given the lack of clarity in regulations concerning the crypto space and privacy-enhancing tools.

Hillebrand noted that the ecosystem of the first cryptocurrency is losing an important solution that helped users conduct anonymous transactions.

“Bitcoin’s privacy will persist, but the reduced support from zkSNACKs for developers and privacy advocates is a regrettable setback,” he added.

The Wasabi Wallet, developed by zkSNACKs, will continue to function as a regular extension, Hillebrand clarified. In his view, the balance verification architecture, integration with the Tor browser, and filtering system still provide significant privacy.

“However, the nature of the Bitcoin blockchain does not allow for complete privacy without CoinJoin,” acknowledged the zkSNACKs CEO.

The developer chose not to speculate on how regulatory practices regarding similar anonymization solutions might evolve outside the U.S.

The issue was also highlighted by former NSA and CIA employee Edward Snowden.

I’ve been warning Bitcoin developers for ten years that privacy needs to be provided for at the protocol level. This is the final warning. The clock is ticking. https://t.co/r7w7gdrHRp

— Edward Snowden (@Snowden) May 2, 2024

“For ten years, I have warned Bitcoin developers that privacy must be ensured at the protocol level. This is the final warning. The clock is ticking,” he wrote.

Recently, regulators have been intensifying scrutiny over cryptocurrency mixing services. Earlier, the FinCEN planned to designate crypto mixers as “money laundering hubs” that threaten national security.

Back in late April, the U.S. Federal Prosecutor’s Office charged two co-founders of the Samourai Wallet, which used CoinJoin, with facilitating the laundering of $100 million for cybercriminals and sanctioned individuals. The top executives face up to 25 years in prison.

In March, a U.S. jury found Russian Roman Sterlingov guilty of operating the Bitcoin Fog mixing service and laundering over $400 million.