Further crackdown on Bitcoin mixing services will harm human rights activists

Yesterday, the U.S. Department of Justice (DOJ) charged Keonne Rodriguez and William Lonergan Hill, co-founders of Samourai Wallet, a privacy-focused Bitcoin wallet that also acts as a mixer, with money laundering and operating an unlicensed money transfer business.

Many people, including activists and human rights defenders, spoke about the importance of this legal action soon after the news broke.

A Very Bad Day for Privacy on the Internet

The consequences of this are so dire

Real “Before and After” Moments https://t.co/ou6CgT9E0T

— Alex Gladstein 🌋 ⚡ (@gladstein) April 24, 2024

Lyudmyla Kozlovska, president of the Open Dialogue Foundation, which educates policymakers and regulators on how Bitcoin mixing services are a tool for pro-democracy activists living under authoritarian regimes that need to maintain anonymity, said it was a “broad international effort to delegitimize privacy.” expressed concerns about the effort. She preserves Bitcoin-related tools.

“If we look at this incident and the regulatory language in the G7 countries, including the AMLR passed by the European Parliament today, we can already see the beginning of the process of criminalizing private payment tools,” Kozlovska told Bitcoin Magazine.

“Crimes can be committed with any technology, but this is not a reason to criminalize or ban personal payment tools, especially not their developers,” she added.

“The fact that law enforcement agencies were able to identify money laundering crimes using this particular wallet means they have all the tools in place to detect such crimes and there is no need to criminalize the technology and its developers.”

Kozlovksa went on to explain how most major money laundering schemes occur over traditional financial rails and exist in the form of payments for expensive real estate deals or arrangements with former high-ranking government officials.

Anna Chekhovich, CFO of the Anti-Corruption Foundation and head of non-profit Bitcoin adoption at the Human Rights Foundation, also relies on Bitcoin Mixer and uses it. We are concerned that we have powers that do not take into account the human rights defenders who should be using them. This technique is used for your own safety.

“As an activist, I don’t like the trend of them trying to control tools like Mixer that give us privacy. Because for activists, human rights defenders and freedom fighters fighting against dictatorship, these tools are very important,” Chekhovich said. he told Bitcoin Magazine.

“At the Anti-Corruption Foundation, we use a blender because we need to protect our donors (identities). We are responsible for the safety of our donors because we encourage them to support us financially, and if they do, they risk up to eight years in prison. “We have a huge responsibility to do everything we can to prevent that from happening,” he added.

“We need a mixer to protect the (identity) of recipients of our funds.”

Kozlovska and Chekhovich implored those running other Bitcoin mixers not to invite malicious actors to use their services in the same way the Samourai Wallet founders did.

In the following tweets cited in the charges against Rodriguez and Hill, Samourai openly encouraged Russian oligarchs to use Samourai’s mixing service to evade sanctions.

New Russian Oligarch Welcomes Samourai Wallet Users https://t.co/WBhB6J89SR

— Samourai Wallet (@SamouraiWallet) June 30, 2022

“This is completely childish behavior,” Kozlovska told Bitcoin Magazine. “Such rhetoric certainly gives us more reason to attack both developers and private payment tools.”

Chekhovich echoed Kozlovska’s arguments and developed them further.

“I absolutely do not support and do not condone those who encourage Russian oligarchs to use Bitcoin or Bitcoin-related tools such as mixers,” Checkhovich told Bitcoin Magazine. “It is wrong to say such things and it is not only bad for the platform owners but also for the Bitcoin community in general.”