Wasabi Wallet coordinator will start blacklisting BTC linked to illegal activity
According to a Sunday announcement, the Wasabi Wallet coordinator, run by zkSNACKs, will begin blacklisting BTC associated with illegal activity.
Wasabi Wallet will blacklist certain UTXOs
Wasabi Wallet's bitcoin mixing service, which is part of the privacy-focused wallet, will begin banning Bitcoin with particular identities, according to a statement. Illegal use was already prohibited by zkSNACKs its terms and conditions, but the coordinator is now adopting a more serious stance by rejecting some UTXOs from accessing the service. Unspent Transaction Output, or UTXO, is essentially what is created every time someone spends BTC.The blacklisting only applies to those who use the Wasabi team's zkSNACKs coordinator. The coordinator is the machine that manages the distribution of Bitcoin among multiple people's wallets. The blacklisting does not apply to anyone who uses alternative coordinators.
A major setback to bitcoin's fungibility
Wasabi Wallet was one of the most respected privacy-focused wallets still in operation, so the announcement was a major slap in the face for the Bitcoin community that values privacy. Wasabi Wallet founder Adam Fiscor even admitted that "blacklisting" has arrived on CoinJoin, calling it a significant setback to bitcoin's fungibility, but as a result, users are looking for alternatives to Wasabi Wallet like Samourai Wallet and will likely switch to alternative coordinators.Mixing services let you obfuscate the transaction history of your coins, allowing users greater privacy they employ protocols such as CoinJoin to fully obscure transactions via either a coordinated or peer-to-peer method. The protocol allows a large group of users to join together an amount of Bitcoin (i.e. 100 people want to mix 1 BTC each) and CoinJoin then redistributes it so everyone gets 1 BTC back, but no one can tell who got what or where it came from.
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