Since the inception of Bitcoin, governments have tried to keep track of all the transactions taking place on the public blockchain. As the years progressed, authorities have shown a distaste for cryptocurrency mixing applications like Coinjoin. On Dec. 19, a Binance customer couldn’t withdraw his bitcoin because the exchange told him he used the mixing wallet Wasabi. Eventually, the customer got his funds back, but only after promising not to deposit to a tumbling wallet again.
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Coin Tumbling Users Beware
The battle for cryptocurrency anonymity is upon us and governments are invading the very decentralized frameworks designed to bypass their so-called authority. Last Thursday, a Binance customer explained on Twitter that his funds were frozen because he was withdrawing to a wallet that mixed his UTXOs. “Bitcoiners be warned: this is what happens if Binance finds you withdrawing to Wasabi wallet,” the Binance client tweeted. The customer dubbed @Bittlecat said he wasn’t surprised to find out his transactions were tracked, but stressed that he was very concerned that Binance knew he was sending to Wasabi. After telling the public about the incident, Bittlecat said that he got his BTC back. “I got my [satoshis] back, but not without promising Big Brother I wouldn’t mix those UTXOs,” he remarked. Bittlecat added:
It is really sad that [Coinjoin] is seen as criminal activity, and I’m glad that we are discussing this.
Bittlecat’s tweet, of course, quickly made its way across social media and crypto forums, becoming a viral topic in a matter of no time. Binance CEO Changpeng Zhao (CZ) replied to Bittlecat’s tweet and disclosed that the exchange operates under
