Open-Source Wasabi Wallet to Censor Certain Bitcoin Transactions

Wasabi Wallet will blacklist certain bitcoin transactions from registering to its CoinJoin coordinator. The decision is a bid to prevent hackers and scammers from using the service and making away with stolen funds.

Wasabi Wallet, an open-source, non-custodial wallet strongly focused on privacy, will refuse certain bitcoin transactions from registering to its CoinJoin coordinator. The official Twitter handle posted the update on March 14 and did not provide any further details.

Wasabi wallet transaction censorship conundrum

zkSNACKs is the company that has built Wasabi Wallet, and the decision to blacklist certain transactions seems to be to prevent hackers and scammers from covering their tracks. Ostensibly, this would protect the company from legal trouble should the government decide to take action against privacy wallets for facilitating the hiding of stolen funds.

It’s important to note that Wasabi Wallet online coordinates transactions. But being able to see the transaction sources itself, it can choose to blacklist those to prevent it from being mixed.

Samourai Wallet, another wallet focused on privacy, also commented on the matter. It said that blacklists were “an affront to everything that is supposed to make bitcoin special.” It added that, with recent events, it was hoping that privacy takes a front seat once again.

Developers from the company are also displeased with the decision, but note that it does protect the company legally. This appears to be an increasing trend in the crypto industry, namely that centralized companies are seeking to limit possibilities that might fall foul of the law. Doing so would help prevent them from being investigated by authorities.

Governments and regulators flexing their muscles

The spate of crypto companies bending to government requests and demands has increased in recent years. South Korea, for example, has banned privacy coins. This is an inevitable consequence of the growth of the crypto market, which in its early years had been the home of enthusiasts and privacy fanatics.

But authorities are growing more concerned with the use of crypto to carry out illicit activities, including evading economic sanctions. As a result, while also regulating the crypto market and allowing it, they have also been imposing restrictions.

One of the more recent notable discussions that drew headlines was the EU’s amendment to a crypto framework. In it, lawmakers were deciding if proof-of-work should be banned, though it was ultimately rejected.