UNITED STATES - In a move that highlights the growing tension between cryptocurrency privacy and regulatory compliance, Swan Bitcoin has announced it will terminate accounts engaging with coin mixers such as Wasabi and Samourai Wallet. The decision, revealed on Friday, comes amid increased scrutiny from banks and custodial partners in response to proposed rules by the Financial Crimes Enforcement Network (FinCEN) targeting suspicious transaction mixing.
Yan Pritzker, the Chief Technology Officer at Swan Bitcoin, expressed the company's difficult position, having to balance the privacy-enhancing role of coin mixers with the realities of banking relationships and potential illicit use concerns. Pritzker noted that while Swan Bitcoin does not align with these regulatory pressures, it must act cautiously due to the fear-driven stance of financial institutions towards cryptocurrency.
The crypto community has responded critically to Swan Bitcoin's enforcement of this policy. Samourai Wallet accused the company of prematurely implementing an unratified proposal. Vlad Costea, host of the Bitcoin Takeover podcast, labeled the move as "dystopian," suggesting it promotes a culture of anti-Bitcoin compliance.
This development follows a recent legal affirmation in October 2023, where a federal court upheld the US Treasury's authority under the International Emergency Economic Powers Act to sanction entities like Tornado Cash involving foreign interests. FinCEN Director Andrea Gacki had previously identified mixers as problematic for enabling criminal funding and concealing illicit proceeds.
The regulatory landscape for crypto mixers has become increasingly hostile in the United States, as evidenced by last month's sanctions against Tornado Cash. The upholding of these sanctions marked a significant moment in the ongoing debate over privacy and regulation in the cryptocurrency space.
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