Wasabi Bitcoin privacy mixing service to shut down starting June 1, zkSNACKs cites legal certainty concerns

zkSNACKs, the company pioneering the development of Wasabi Wallet, has revealed plans to shut down its Coinjoin coordination service, effective from June 1, 2024. It comes as The Financial Crimes Enforcement Network (FinCE) continues in its efforts to combat terrorist financing related to Hamas, Palestinian Islamic Jihad and the Democratic People’s Republic of Korea.

Also Read: Coinbase suggests US Treasury reconsider crypto mixing rules, says there is a regulatory gap

zkSNACKs to discontinue its Coinjoin coordination service effective June 1

Recently, FinCEN proposed rulemaking on crypto. The government bureau issued a statement in October, stating that it would label crypto mixers as a money laundering concern and combat bad actors that engage in terrorist financing and sanction evasion. In the latest development, zkSNACKs has announced plans to shut down its Bitcoin privacy mixing service, according to an official blog.

“Throughout our history, we have always made efforts to operate under legal clarity,” said the company. “At this point, we need to regain more certainty before moving forward.” It hints at possible confrontation with the law, but this is not indicated in the blog.

Even as the mixing service winds down, Wasabi Wallet will continue to function as a regular Bitcoin wallet. This means users will still be able to generate private keys for their Bitcoin transactions, either sending or receiving BTC.

Based on the report, users of other wallet clients that connect to the zkSNACKs coordinator will also be affected. Among them, Trezor Suite and BTCPayServer. This is because Coinjoins is a crucial part of the operating mechanism, such that the nature of the Bitcoin blockchain prevents users from obtaining complete privacy without Coinjoins.

zkSNACKs has, however, committed to continued funding of the continuous maintenance of Wasabi Wallet’s basic features.