To terminate customer accounts that use Swan Bitcoin crypto-mixing services

Bitcoin (BTC) services platform Swan Bitcoin has warned its customers that it will be forced to terminate accounts obtained through interactions with crypto-mixing due to regulatory obligations of partner banks.

Customers were notified of the policy changes in a letter by the United States' Financial Crimes Enforcement Network (FinCEN), establishing new responsibilities on companies conducting transactions from hybrid services.

In the year On November 12, the company's founder Yan Pritzker took to X (formerly Twitter) to explain that although the company is not opposed to the use of privacy mixing tools and services, it must comply with its obligations to partner banking institutions.

Pritzker said the proposed FinCN rule was poorly written and would cover too many Bitcoin-related practices, such as banning single-use BTC addresses, mixing funds, and using any programmable transactions like Lightning Network channels.

He adds that mixing services is painted with a scary brush.

Financial regulators in the US have described crypto-mingling services as a conduit for illegal activities and have tried to crack down on the services. Regulators have sanctioned such activities and even prosecuted and jailed Tornado Cash creators. Pritzker added:

“In fact, we've written and published privacy policies that encourage the mixing and promotion of companies like Wasabi and Zamora. Mixing is common, not a crime, and we believe that using unmixed Bitcoin is akin to bringing your entire check to the grocery store to pay for an apple.

Pritzker noted that the current political climate has created a serious threat to the banking sector, with most banks simply unwilling to do anything in crypto. Therefore, in order to continue their Bitcoin on-ramp service, their security partner must interact with banking services governed by FinCEN regulations.

In a letter to Bitcoin customers, Swan suggested ways to challenge such policies, and said educating the masses on Bitcoin is the first step in that direction.

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