Wasabi Wallet to Begin Censoring Coinjoin Transactions

Wasabi Wallet, a privacy-oriented bitcoin-only wallet, has announced it will start introducing censorship methods into its mixing procedures. The announcement was made on social media, where the official account of Wasabi explained that a blacklist will prevent some UTXOs (unspent transaction outputs) from registering to Coinjoins, the method Wasabi and other wallets use to enhance transaction anonymity.

Wasabi Wallet, one of the main privacy-centric bitcoin wallets, announced it will start working to censor some transactions from using its mixing procedures. The announcement, made in a statement on social media, explained the way in which these transactions will be censored. Some unspent transaction outputs (UTXOs) coming from certain addresses won’t be able to register to participate in the Coinjoin process that helps users mix and anonymize their bitcoin. UTXOs are a key part of how bitcoin works, and serve to group bitcoins that are stored in wallets in different groups and quantities.

The community reacted negatively to this, criticizing the effect it would have on the popularity and adoption of Wasabi Wallet. Nopara73, also known as Adam Ficsor, founder and creator of Wasabi Wallet, stated:

Blacklisting arrived to coinjoins. IMO it is a major setback to Bitcoin’s fungibility.

Wasabi Wallet is owned by zkSNACKs, a Gibraltar registered company. While the announcement didn’t explain the reasons behind the resolution, Rafe, another member of Wasabi’s team, clarified the motivations that made Wasabi adopt these measures. He declared:

We are trying to protect the company and the project by minimizing the amount of these hackers and scammers using the coordinator and getting us in trouble. This should be in the rights of the company to do but believe me, none of us are happy about this.

The backlash the announcement caused also gave origin to a proposal to fork Wasabi’s code to eliminate the limitations the current version of Wasabi now has. The fork, which will be named Wasabi BTC, proposes to:

…remove all corporate/state censorship and make coinjoin possible for anyone. Decentralized coinjoin, fully open source and no attack vector for nation-states.

The upcoming fork received the blessing of Ficsor, who wished the team good luck in the endeavor.

The team of Samourai Wallet, another privacy-centric bitcoin wallet, also criticized the situation, declaring that “the radical encroachment of the state into the lives of ordinary law-abiding citizens is on a concerning upward trajectory.”

What do you think about Wasabi Wallet’s decision to censor transactions at a UTXO level? Tell us in the comments section below.