When you care about the ultimate impact your investments and spending activity have on the world, part of being a conscious consumer and investor includes attempting to deal only with companies who have both transparency in and liability for their actions. There are crypto technologies that allow people to make their activity untraceable, and that has the potential to lead to misuse by nefarious companies and individuals.
The U.K.’s National Crime Agency (NCA) has called for the regulation of crypto mixing technology that can disguise transactions which would otherwise have been traceable on the blockchain, according to a report by the Financial Times.
CoinJoin is a type of send transaction that can be used on the Bitcoin protocol to protect users’ privacy. The peer-to-peer, decentralized protocol disguises the origin of bitcoin transactions (inputs) by combining them with many other inputs in a pool and then returning an equivalent amount of funds to the users, obfuscating the details of the bitcoin’s origin.
“They can be used to provide a ‘layering’ service, churning criminal cash obscuring its origins and audit trail, similar to how a cash business might be used by criminals to legitimize cash through the banking system,” Gary Cathcart, the NCA’s head of financial investigation, said in an interview with FT published on Tuesday.
The NCA wishes for regulation that would require mixers to comply with money laundering laws, carrying out customer checks and audit trails of funds swapping hands on their platforms.
CoinJoin usage hit a peak of 65,000 BTC ($2.5 billion) in January 2021, equivalent to 0.35% of the total bitcoin transacted that month.
Some crypto exchanges have responded to crypto mixing by barring transactions from their services that appear to have participated in CoinJoins. Yesterday, zkSNACKs, the company behind the privacy focussed Wasabi wallet, announced it will bar certain bitcoin (BTC) transactions from using its CoinJoin coordination service.
Via this site.
