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Wasabi Wallet, one of the most well-known Bitcoin wallets, is about to close one of its most iconic services, CoinJoin. The news, announced on May 2 by Wasabi Wallet development team ZkSNACKS, comes amid growing regulatory pressure, especially from the United States, regarding cryptocurrency privacy protocols.

CoinJoin, a feature that allows multiple Bitcoin transactions to be combined to obscure the tracking of funds, has been a prominent feature of Wasabi Wallet. However, the team announced that starting June 1st, it will no longer support CoinJoin transactions.

In a blog post, the team highlighted the increasing difficulties in maintaining the service, citing regulatory hostility as the main reason behind the decision.

“After years dedicated to improving Bitcoin privacy, zkSNACKS is ending its CoinJoin coordination service. We always seek to operate within the law. But at this point, we need more regulatory clarity before moving forward,” he said.

Wasabi Wallet ceases activities with CoinJoin

Wasabi Wallet will continue to operate as a non-custodial Bitcoin wallet. Therefore, it will continue to allow users to create wallets and transfer assets without the CoinJoin feature.

CoinJoin was designed as a way to protect users’ privacy by breaking the link between transaction inputs and outputs. This makes it difficult to track the origin and destination of funds. Its discontinuation by Wasabi Wallet resonates with a regulatory environment increasingly hostile to privacy technologies in the cryptocurrency sector.

Wasabi Wallet’s decision follows a series of regulatory actions in the US targeting privacy protocols. In August 2022, for example, the US Treasury Department added Tornado Cash, an Ethereum-based privacy protocol, to its sanctions list, banning US residents from interacting with it.

The move was a response to the increased use of Tornado Cash by the Lazarus Group, a North Korean hacker group.

Furthermore, in April this year, the US Department of Justice charged the founders of Samourai Wallet with money laundering and other offenses related to money transmission. This suggests a growing crackdown on wallets and privacy protocols in the country.

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