Wasabi announced that it will bar certain Bitcoin transactions from its service using CoinJoins. Wasabi’s Bitcoin Wallet is known for its mechanism that helps users coordinate CoinJoins. CoinJoining is a method of mixing coins to protect users’ privacy on the public ledger by essentially conducting multiple transactions into a pool where their coins are mixed with other users’ coins. The user then receives an equal value of Bitcoin at the other end of the transaction. A CoinJoin makes it more difficult to connect the input and output of the transaction, making tracing the transactions more difficult.
The transactions will be barred to prevent hackers and scammers from using the service and to keep Wasabi out of presumably legal trouble. This change from Wasabi comes after a crackdown on tracking Bitcoin transactions. The highlights the difficulties for centralized companies building services to facilitate interactions on a decentralized ecosystem like the Bitcoin network.
CoinJoining is not specific to Wasabi, but Wasabi is the first company that is known for CoinJoining that will be surveilling CoinJoin transactions. A tweet has circulated with a screenshot from the Wasabi Telegram group that Wasabi will start paying a chain surveillance company to analyze bitcoin before CoinJoin rounds.
CoinJoining options on the Wasabi Wallet are not broken however. Users will still be able to use the CoinJoining function of Wasabi, but the zkSNACKS coordinator Wasabi uses will now place restrictions. The coordinator will now exclude CoinJoin capability from blacklisted addresses but will remain operational for all other users.