Wasabi Wallet Retires, Trezor Discontinues Privacy-Enhancing Coin-Mixing Feature

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Crypto hardware wallet manufacturer Trezor has announced today that it has discontinued the SynJoin feature in the Trezor Suite. The service, in partnership with zkSNACKs, the developer of the Wasabi wallet, will end in June. Despite the shutdown, Trezor has assured users that funds in Coinjoin accounts will remain accessible.

Coinjoin in Trezor will close on June 1, 2024.

We deeply respect the privacy of our users, and it is with great regret that we have to inform you that as of June 1st, we have to inform you that our partner will no longer be providing this service and that we will be discontinuing the Coinjoin feature for Trezor Suite.…

— Trezor (@Trezor) May 2, 2024

Coinjoin allows users to hide the origin and destination of their funds. Trezor is the first hardware wallet to accept CoinJoin transactions. In April last year, it added the Synoin feature to the Trezor Model T and extended the functionality to the Trezor Model One in August.

zkSNACKs, in a recent blog post stated that the decision to end its coinjoin coordination service was made with “a heavy heart” and in the interest of “legal transparency”. The company claims that Wasabi Wallet offers strong privacy features such as client-side filtering and Tor integration, even without Coinjoin.

The move follows zkSNACKs decision to block US citizens and residents from accessing its services, including Wasabi Wallet, following recent regulatory pressure. This prohibition extends to related websites and services, blocking IP addresses already implemented.

Non-custodial crypto service providers face legal repercussions.

Phoenix, another crypto wallet provider, recently announced that it will exit the US market due to ongoing regulatory uncertainty. Users are advised to close their channels and transfer funds before access is terminated on May 5, 2024.

“Recent announcements from US authorities have raised doubts about whether self-secured wallet providers, lightning service providers or lightning nodes could be considered financial services businesses and regulated as such,” Async, the bitcoin company behind Phoenix, said in a statement.

The move follows the SEC's recent crackdown on unregulated wallet provider Zamora Wallet and ongoing surveillance of MetaMask. The SEC has issued a Welsh notice to MetaMask's parent company, Consensys. This notice serves as advance warning that the SEC may consider legal action.

In response, Consensys filed suit against the SEC, choosing to face regulatory challenges head-on rather than wait for further SEC action. Earlier, Uniswap Labs, the team behind the decentralized exchange Uniswap, also received a notice from the securities agency Wells.

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