A Final Warning on Bitcoin Privacy: Edward Snowden’s Caution
Amid a tightening grip on crypto privacy projects by U.S. authorities, former CIA whistleblower Edward Snowden issues a “final warning” regarding Bitcoin privacy protocols. Snowden’s caution comes in response to recent developments such as the suspension of services for U.S. users by Wasabi Wallet and the shutdown of the anonymizing CoinJoin feature by Trezor.
U.S. Crackdown on Crypto Privacy Projects
Recent arrests of the founders of Samourai Wallet and legal actions against crypto mixer developers like Roman Storm have set off alarms within the crypto community. These incidents reflect a broader interpretation of money transmission laws by the Department of Justice, encompassing even wallet developers without direct control over user assets.
- Wasabi Wallet suspends services for U.S. users
- Trezor shuts down its CoinJoin feature
Backlash from the Crypto Community
The crypto community has reacted strongly to these developments, with some labeling them as a crackdown on crypto privacy projects. Organizations like Coin Center and individuals like Peter Van Valkenburgh have expressed concerns about the implications of these actions on liberty, due process, and privacy rights.
A Departure from Established Policies
Coin Center has criticized the Department of Justice’s stance as an overreach, suggesting that it contradicts existing FinCEN guidance and rulings. Senator Cynthia Lummis has also joined the criticism, highlighting the potential threats posed by the DOJ’s aggressive interpretation of money transmission laws.
FBI’s Warning and Federal Regulations
Following the arrests of Samourai Wallet founders, the FBI issued a warning against using unregistered crypto money transmitting services. Registered Money Services Businesses (MSBs) are obligated to conduct KYC checks, with public blockchains exposing transaction histories once wallets interact with platforms requiring KYC compliance.
International Impact on Crypto Privacy
Concerns about crypto privacy are not limited to the U.S., as evidenced by recent actions in the UK. The UK government’s characterization of privacy coins as detrimental to the public good has led to expanded powers for UK police to seize crypto assets and related items during investigations.
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