The Bitcoin mixing service CoinJoin, that’s part of the privacy-focused Wasabi Wallet, is beginning to ban bitcoin linked to illicit conduct.
Mixing services hide the transaction history of your coins, giving you greater anonymity while also enticing those looking to launder stolen bitcoins
According to the announcement, CoinJoin will commence restricting bitcoin with certain identifiers. It is now receiving criticism from several crypto privacy advocates due to this decision.
As per CoinJoin’s terms of service, it has long prohibited such unauthorized use of bitcoin, but the firm is now taking a more proactive approach to preventing it.
The restriction applies to those who use the Wasabi team’s zkSNACKs coordinator. Anyone that uses alternative coordinators is exempt from the blacklisting.
Wasabi Wallet founder Adam Fiscor confirmed that blacklisting has arrived on CoinJoin, calling it a big setback to bitcoin’s fungibility.
From now on, a few specific UTXOs will be denied access to the service by the coordinator. Unspent Transaction Output, or UTXO, is essentially what is created every time someone spends bitcoin.
It’s usually the amount remaining in their wallet after they’ve spent a certain sum. This means that the service can block a certain amount of bitcoin that has been stolen.
Rafe, one of the Wasabi Wallet developers, tweeted, “We are trying to protect the company and the project by minimizing the amount of these hackers and scammers using the coordinator and getting us in trouble. This should be in the rights of the company to do but believe me, none of us are happy about this.”
At the beginning of this month, gaming firm Valve’s president Gabe Newell revealed in an interview that half of the Bitcoin payments executed on Steam Deck(a subsidiary of Valve) were fraudulent. In October 2021, Valve even angered crypto enthusiasts by removing blockchain, crypto, and NFT games from its store.