July 16, 2024
Swan Bitcoin to Close Accounts Using Crypto-Mixing Services
Latest Cryptocurrency News

Swan Bitcoin to Close Accounts Using Crypto-Mixing Services

Swan Bitcoin has issued a warning to its users, notifying them of potential account terminations if found engaging in crypto-mixing, a move attributed to regulatory obligations imposed by its partner banks. Users were informed of this policy shift through a letter, indicating that the changes are in response to the proposed rule by the U.S. Financial Crimes Enforcement Network (FinCEN). Yan Pritzker, the co-founder, took to social media to express the company’s stance, asserting that while Swan Bitcoin supports privacy tools and mixing services, it must comply with the requirements of its banking partners.

Pritzker criticized the proposed FinCEN rule, describing it as poorly written and encompassing a broad spectrum of Bitcoin-related activities, such as using BTC addresses only once, mixing funds, and restricting programmable transactions like those on the Lightning Network channels. He emphasized that mixing services are often inaccurately portrayed, highlighting their common use to break large amounts of Bitcoin into smaller ones while prioritizing privacy.

In the broader regulatory landscape, U.S. authorities have viewed crypto-mixing services as potential conduits for illicit activities, resulting in sanctions and legal actions against platforms like Tornado Cash. Despite this, Pritzker stated that Swan Bitcoin has actively supported privacy, publishing guides that encourage mixing and endorsing privacy-focused companies like Wasabi.

Pritzker also pointed out the current climate of fear within the banking sector, where many banks are reluctant to engage with anything related to cryptocurrency. To maintain its Bitcoin on-ramp services, Swan Bitcoin’s custody partner must navigate the regulatory framework governed by FinCEN.

In the letter to customers, Swan Bitcoin not only communicates the changes but also suggests ways to oppose such policies, emphasizing the role of education in normalizing privacy practices within the Bitcoin community.

Image By WangXiNa

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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