ZkSNACKs to Cease CoinJoin Anonymization Service Amid Regulatory Pressure

The developer of Wasabi Wallet, ZkSNACKs, will discontinue its CoinJoin anonymization service from June 1, citing increasing pressure from law enforcement on cryptocurrency mixers. This decision will also affect users of the Trezor Suite wallet and the BTCPayServer payment gateway.

After years of relentless dedication to improve Bitcoin’s privacy, zkSNACKs, the company pioneering the development of Wasabi Wallet, is shutting down its coinjoin coordination service, effective June 1st, 2024.

Blog post announcement link:https://t.co/zMxvQJuQFZ

— Wasabi Wallet (@wasabiwallet) May 2, 2024

Although CoinJoin presents its tools as more sophisticated and entirely different from mixing services, its technology serves similar purposes.

Wasabi Wallet will continue to operate as a standard Bitcoin wallet. 

“Even without CoinJoin, Wasabi’s client-side filtering architecture, Tor integration, and individual coin selection make it the most private wallet available. However, the nature of the Bitcoin blockchain does not allow users to achieve full privacy without CoinJoin,” the developers wrote.

Last week, ZkSNACKs blocked access to Wasabi Wallet for U.S. citizens and residents.

Regulators worldwide are intensifying their stance against cryptocurrency mixers. Notably, the FinCEN plans to designate them as “money laundering hubs” that threaten U.S. national security. 

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

Samourai Wallet CEO Keonne Rodriguez pleaded not guilty and was released on bail of $1 million. CTO William Lonergan Hill, arrested in Portugal, awaits extradition to the U.S.

In November 2023, California-based Bitcoin platform Swan Bitcoin warned users via email of indefinite bans for direct use of crypto mixers. 

In March 2024, a U.S. jury found Russian Roman Sterlingov guilty of operating the Bitcoin Fog mixing service and laundering over $400 million. He faces up to 20 years in prison.

Awaiting sentencing is Tornado Cash mixer developer Alexey Pertsev, accused of laundering $1.2 billion in illicit funds. Prosecutors have requested a 64-month sentence for him.