May 6, 2024
Bitcoin News

Bitcoin Privacy Service Shutdown: zkSNACKs Ceases CoinJoin

The company behind the privacy-enhancing service CoinJoin, zkSNACKs, has announced the cessation of its coordination service.

Max Hillebrand, CEO of zkSNACKs, revealed to Cointelegraph that this decision stems from the necessity to align with evolving legal and regulatory frameworks in the United States.

Compliance Concerns Prompt Closure

Hillebrand cited the ambiguity surrounding U.S. regulations about cryptocurrencies and privacy tools as a key factor in the closure.

Moreover, he emphasized the importance of regulatory compliance in the decision-making process, indicating the challenges posed by the uncertain regulatory landscape.

Privacy Advocates Express Concern

The announcement has elicited concern from privacy advocates, with former NSA whistleblower Edward Snowden among those lamenting the discontinuation of the service.

Hillebrand acknowledged the setback. He affirmed that while Bitcoin privacy will endure, the loss of zkSNACKs’ support for developers and educators is regrettable.

Implications for Bitcoin Privacy

Despite the closure of the CoinJoin service, Max Hillebrand assured users that Wasabi Wallet, zkSNACKs’ flagship product incorporating CoinJoin, will continue to function as a regular BTC wallet.

However, the unparalleled privacy offered by CoinJoins will no longer be available, with Hillebrand conceding that complete privacy on the Bitcoin blockchain is challenging without such mechanisms.

Ripple Effect Across the Ecosystem

The impact of zkSNACKs’ decision extends beyond its own services, affecting products and services across the Bitcoin ecosystem.

Hardware wallet services like Trezor Suite and BTCPayServer will no longer offer the CoinJoin service to users from June 2024. This prompted further questions about the future of Bitcoin privacy-enhancing tools.

Understanding CoinJoin: A Privacy Mechanism

During an interview at Bitcoin Amsterdam in 2023, Max Hillebrand detailed zkSNACKs’ CoinJoin service. By combining multiple inputs and outputs from various users into a single transaction, CoinJoin effectively obscures transaction details, enhancing privacy on the Bitcoin network.

Wasabi Wallet, launched in 2018, was a notable implementation of this technology. It offered anonymity through Tor integration and client-side filtering for transaction verification without compromising privacy.

Image by fabrikasimf on Freepik

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