The 134th reason why you should not use Wasabi Wallet.

[NotATether]

Once upon a time, Wasabi Wallet was one of the most formidable, if not the most private wallet the Bitcoin community had to offer. It ran your bitcoins through WabiSabi, a CoinJoin protocol, and it "mixed" (if you want to call it that) your coins for you and gave you clean coins. Just like many of these mixers that you see advertised around here.

Unfortunately, Wasabi, like many other mixers and coinjoiners, had one inherent and fatal flaw - It ran a centralized coordinator. It was not decentralized at all.

This means that not only can law enforcement destroy a coordinator, but the coordinator itself can sabotage it's own users.

This is exactly what happened with Wasabi Wallet. While zkSNACKs, the owner of the coordinator, was busy preparing its draft announcing its intent to blacklist UTXOs that it doesn't like, the community was aloof of this news.

Of course, they were very angry when they found out about this, because there were no criteria for blacklisting a UTXO, not to mention the entire concept of blacklisting was unethical in the first place, so that basically meant that zkSNACKs could make up the rules on the fly for what UTXOs they would like to block.

Believe it or not, this is old news. It happened 4 years ago.

Since then, a couple of sockpuppets have taken it upon themselves to defend Wasabi of any wrongdoing, justifying harvesting your UTXO set for this purpose while decrying competing wallets doing the same. You can find these accounts on many platforms, like X and bitcointalk.

Fast forward to today, and now Wasabi announced that no American is allowed to use the Wasabi wallet or access their website.

I am sure you are shaking your head at this point thinking "but I thought only exchanges do that kind of stuff!" Well, that was the case for all KYC-verified services for a long time, but at least they had the excuse of obeying the law. Now though, even anonymous services are hiding from US users, not out of legal obligation, but out of fear. It has never been illegal for Americans to own bitcoin, even though the government wants a tax cut out of all bitcoin transactions at this point, which is not hard to see.

I actually think nopara73 (Wasabi founder) ran away from Wasabi Wallet because he saw this coming. I guess he didn't want his reputation to be further in the mud or something.

Do not use any bitcoin wallet that geoblocks its users. Bitcoin is a global, permissionles, decentralized, P2P electronic cash.

[yhiaali3]

Do not use any bitcoin wallet that geoblocks its users. Bitcoin is a global, permissionles, decentralized, P2P electronic cash.

This is how Bitcoin should be, but unfortunately this is not happening. Most services, even those that claim to be decentralized, block users based on geographical location. This is a real tragedy and it is unfortunate that Wasabi Wallet has joined this list.

This, on the other hand, reminds me of a similar problem if you remember the MetaMask incident, which blocked Russian users based on geographical location while everyone thought it was a decentralized service that maintained users’ privacy, but it turned out that it steals users’ information and can ban them.

I have a feeling that there is no real decentralization anywhere.

[TomPluz]

I have a feeling that there is no real decentralization anywhere.

I am sure that we in the cryptocurrency industry will be facing this issue more and more as years will pass and the more that crypto will be going into the mainstream population. The more that crypto will be popular, the more we might learn that decentralization is going to be redefined in ways we don't want to agree with. And the way I am seeing it is that there are two big factors here: the people behind the platform specifically in question and the continuing push of the government to retain control and influence everything its eyes lay on. The first factor is very unfortunate as it is nuking the very fabric of the platform and the level of trust and confidence the users bestowed on them. Decentralization is at the central of all things cryptocurrency and of the blockchain...without decentralization then we are just dealing with the usual stuffs. I am really wondering if there can a time when decentralization is something that we could not anymore enjoy and that people will be forced to accept that reality, otherwise be on the path of the government and its legal overreach.

[0t3p0t]

I personally do not use Wasabi wallet ever since I was in crypto up to this day because I am only using Electrum, Mycelium, Green Wallet, BlueWallet, Coinomi and Trust Wallet. I don't know if those hot wallets I am using are decentralized ones or not but I am comfortable using them since 2017.

Regarding decentralization yeah I think this depends on locations where we are at but since I am in a crypto friendly country I have no problem using wallets for now as I never heard someone getting banned from a wallet in here and hopefully not in the future.

[ABCbits]

Once upon a time, Wasabi Wallet was one of the most formidable, if not the most private wallet the Bitcoin community had to offer. It ran your bitcoins through WabiSabi, a CoinJoin protocol, and it "mixed" (if you want to call it that) your coins for you and gave you clean coins.

FYI, older version of Wasabi Wallet actually use protocol called ZeroLink[1].

Unfortunately, Wasabi, like many other mixers and coinjoiners, had one inherent and fatal flaw - It ran a centralized coordinator. It was not decentralized at all.

On top of that, it could be somewhat mitigated if their wallet let user easily switch coordinator and offer feature to discover coordinator run by someone else. Otherwise, their wallet could be alternative for JoinMarket.

[1] https://github.com/nopara73/ZeroLink

[Sim_card]

I personally do not use Wasabi wallet ever since I was in crypto up to this day because I am only using Electrum, Mycelium, Green Wallet, BlueWallet, Coinomi and Trust Wallet. I don't know if those hot wallets I am using are decentralized ones or not but I am comfortable using them since 2017.

Don't use trust wallet anymore, because centralized services are not safe but they claim to be. This is exactly what OP is saying that Wassabi claims to be decentralized whereas they are not. The problem with these centralized services is that they can sell out your information to the government. I learnt how Wassabi is not a safe wallet to use in storing bitcoin from the other forum.

[yhiaali3]

And the way I am seeing it is that there are two big factors here: the people behind the platform specifically in question and the continuing push of the government to retain control and influence everything its eyes lay on. The first factor is very unfortunate as it is nuking the very fabric of the platform and the level of trust and confidence the users bestowed on them. Decentralization is at the central of all things cryptocurrency and of the blockchain...without decentralization then we are just dealing with the usual stuffs. I am really wondering if there can a time when decentralization is something that we could not anymore enjoy and that people will be forced to accept that reality, otherwise be on the path of the government and its legal overreach.

Yes, unfortunately, this is what we are heading towards. I fear that we are losing decentralization little by little. Look at the successive attacks launched by governments on centralized and decentralized services related to cryptocurrencies. They are seeking to encircle it in the end to become under their complete control.

The only way that can save centralization is to use Bitcoin the way Satoshi created it, I mean P2P without the need for a third party. The government cannot attack Bitcoin so it attacks third party services.

[SamReomo]

Yes, I was pretty sure that wallets like Wasabi will leave the US market soon as I thought they might be the next target of SEC. They are now avoiding US users to be safe from SEC and that's a sign that they have done something wrong.

I have personally never used Wasabi wallet and I won't use it in future either but surely the ones who are using it should be careful after reading this thread. If they continue using Wasabi wallet then they might face issues in future.

[Sokani]

I think they're scared and they came up with this decision based on the government's continuous clampdown on various privacy enhancing tools. Based on the fact that it has been in operation for about 6 years and has offered it services to both US and non US citizens, is Wasabi really safe from the US government after this announcement? Can the government still go after it?

[MrSpasybo]

I think they're scared and they came up with this decision based on the government's continuous clampdown on various privacy enhancing tools. Based on the fact that it has been in operation for about 6 years and has offered it services to both US and non US citizens, is Wasabi really safe from the US government after this announcement? Can the government still go after it?

We will have to wait for new announcements regarding the US government's allegations against Phoenix and Wasabi Wallets. To be honest,  I am just a regular user, I am not a lawyer and do not fully understand the regulations and potential charges involved in these wallet apps. I am not in the US but I will also avoid using these wallet apps, the market has many other options that are more convenient, secure and legal than them.

I am really looking forward to more information about the allegations and the lawsuit, I do not care about the fate of Wasabi, I care about the court's views on all crypto wallet apps in the crypto market. Clear regulations can become a basis for crypto wallet apps to comply with and operate more effectively in the future, promoting the development of the entire crypto market.

[Z-tight]

They are now avoiding US users to be safe from SEC and that's a sign that they have done something wrong.

Wasabi wallet is not recommended, but that is on the basis that they offer selective privacy, but blacklisting certain utxo's from their tx. However, leaving the U.S market doesn't mean doing something wrong in my honest opinion, i believe they have seen what just happened to Samourai wallet and they are trying to be a step in front.

[0t3p0t]

They are now avoiding US users to be safe from SEC and that's a sign that they have done something wrong.

Wasabi wallet is not recommended, but that is on the basis that they offer selective privacy, but blacklisting certain utxo's from their tx. However, leaving the U.S market doesn't mean doing something wrong in my honest opinion, i believe they have seen what just happened to Samourai wallet and they are trying to be a step in front.

Well yeah maybe they just want fix something or what but that's natural I think as most TOS might say they do have the right to change things on their control though I am not that sure about the exact term for that maybe discretion but that is what I observed in every services offered. What happened to Wasabi might also be compliant or not to regulations to US SEC but that is up to the users though I am not from the US but this might personally be an intriguing topic or issue for me. I personally do not use Wasabi myself just to be honest.

[Fivestar4everMVP]

Thank you very much NotATether..
++ for I consider this a very vital information passed to this community here, I need not say that I am very familiar with Wasabi wallet, I was one of their signature ad participants way back then when they first began promoting their service on bitcointalk, and like you said, they were considered as one of the best bitcoin wallet for the bitcoin community.
And I also knew when the whole about them blacklisting UTXOs started, it's a thing the community on bitcointalk frowned at, but like every persons who ran a centralized service, it was hard for them to turn back, which means that they will ultimately lose the power of control, or being in charge, just exactly the same type fear the government have if they allow crypto to dominate over fiat.

Wasabi wallet coming out now to shut off US users proves one thing, and that is that they are centralized, and I believe this should act as a proof to all that have defended Wasabi all this years, I stopped using this wallet a long time ago by the way, I will advice users here who value their privacy and anonymity to also adhere to this advice.

[SamReomo]

However, leaving the U.S market doesn't mean doing something wrong in my honest opinion, i believe they have seen what just happened to Samourai wallet and they are trying to be a step in front.

Yes, that's very true but they are leaving the US market when they saw Samourai wallet got seized by the SEC. That simply shows that they fear that in future they might also get seized if they continue their services in the US.

I know some people say that US is going to shutdown each privacy providing service, but if the privacy providing service hasn't done something wrong then why they even have to fear a government?

[dkbit98]

Unfortunately, Wasabi, like many other mixers and coinjoiners, had one inherent and fatal flaw - It ran a centralized coordinator. It was not decentralized at all.

I understand your criticism towards Wasabi wallet, but why are you wasting so much time on them?
Wasabi is still a privacy tool, we need that, and there are much more centralized things in bitcoin ecosystem right now, for example Lightning Network.
I didn't see you criticizing LN that is basically a failed project that was never adopted by majority of bitcoin users, and it has constant problems.
We could also criticize Bitcoin developers for not enabling any protocol change that would improve privacy, for example mimble-wimble was proposed few years ago.