• 26 May, 2024

Coinjoin Shuttered by Trezor Amidst Privacy Concerns and Regulatory Pressures

Privacy advocate Edward Snowden renewed his call for built-in privacy features in cryptocurrency protocols after Trezor, a leading hardware wallet manufacturer, announced the discontinuation of its coinjoin service. This move follows the recent shutdown of similar services offered by Wasabi Wallet and the exodus of crypto service providers from the US market due to regulatory uncertainties.

Trezor users will no longer be able to utilize the coinjoin feature within its Trezor Suite by June. The service facilitated through a partnership with zkSNACKs, the developer of Wasabi Wallet, aimed to obfuscate the origin and destination of Bitcoin transactions. While Trezor assures access to funds held in coinjoin accounts, the shutdown signifies a setback for cryptocurrency privacy options.

Coinjoin allows users to combine their Bitcoin transactions with others, making it more challenging to track individual transactions on the blockchain. Trezor was the first hardware wallet to integrate this privacy tool, highlighting its initial commitment to user privacy in the cryptocurrency space.

zkSNACKs, in a recent blog post, expressed their decision to terminate the coinjoin service stemming from a need for “legal clarity.” The company emphasizes that Wasabi Wallet will continue to offer alternative privacy features, such as client-side filtering and Tor integration.

This shutdown follows zkSNACKs’ decision to restrict access to its services, including Wasabi Wallet, for US citizens and residents due to mounting regulatory pressure. It reflects a broader trend within the cryptocurrency space, with other service providers like Phoenix exiting the US market entirely due to regulatory uncertainties.

The exodus of companies like Phoenix and the potential legal actions against MetaMask by the SEC paint a concerning picture for non-custodial crypto service providers in the US. The industry grapples with balancing user privacy with the need to prevent illicit activities, mirroring the concerns raised by Edward Snowden and others advocating for strong built-in privacy features within cryptocurrency protocols.

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