Bitcoin Privacy Remains Despite CoinJoin Shutdown — zkSNACKs CEO
The Bitcoin (BTC) ecosystem will soon lose a critical privacy-enhancing service after zkSNACKs announced it will discontinue its CoinJoin coordination service.
In an exclusive interview with Cointelegraph following the announcement, zkSNACKs CEO Max Hillebrand explained that the decision was made to comply with the latest legal and regulatory updates in the United States.
Hillebrand said the closure of the CoinJoin service was necessary due to a lack of clarity in the U.S. about the cryptocurrency space and regulations surrounding the use of privacy-enhancing tools.
Former NSA whistleblower Edward Snowden was among the commentators who lamented the disruption.
The zkSNACKs CEO said that the Bitcoin ecosystem is inevitably losing important services that help users transact while strengthening their privacy through the CoinJoin mechanism.
“Bitcoin privacy will survive, but it is an unfortunate setback that reduces zkSNACK’s support for Bitcoin developers and privacy educators.”
Hillebrand also confirmed that Wasabi Wallet, a Bitcoin wallet developed by zkSNACKs that integrates the CoinJoin service, will continue to function as a regular BTC wallet. Users can generate private keys to receive and send Bitcoin.
CoinJoin offers complete privacy
Despite the CoinJoin shutdown, Hillebrand said Wasabi’s client-side filtering architecture, Tor integration, and custom coin selection still provide users with important privacy protections. However, the level of privacy provided by CoinJoins will continue to be unmatched.
“Due to the nature of the Bitcoin blockchain, users cannot achieve complete privacy without CoinJoins,” Hillebrand acknowledged.
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The zkSNACKs CEO was hesitant to speculate whether similar crackdowns on the privacy protocol and CoinJoin service would occur in jurisdictions outside the United States.
The termination of zkSNACK’s CoinJoin coordination service also impacted products and services across the ecosystem. Hardware wallet services Trezor Suite and BTCPayServer will no longer be able to provide services to users from June 2024.
Cointelegraph reached out to Trezor for comment on zkSNACKs’ closure of CoinJoin and whether it would consider using another Bitcoin privacy-enhancing service for its users.
How does CoinJoin work?
Hillebrand detailed zkSNACK’s CoinJoin service in an in-depth interview with Cointelegraph at Bitcoin Amsterdam 2023.
As Hillebrand explained, the CoinJoin service provides an effective way to obfuscate Bitcoin transactions by combining multiple inputs and outputs from multiple users into a single transaction, making it much more difficult for outside observers to determine specific transaction details.
Related: Trezor Wallet Enables Bitcoin Privacy Features with CoinJoin
Wasabi Wallet was launched in 2018 after extensive research. The wallet uses Tor for anonymity, a lightweight client approach to check balances without compromising privacy, and utilizes block filters to trade efficiently and securely without downloading the entire Bitcoin blockchain. You can check .
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