Wasabi, the Bitcoin wallet focused on user privacy, is now in the crosshairs of the European Union police agency, Europol, and blockchain intelligence firm, Chainalysis.
In a report by the European Cybercrime Center (EC3) from Europol, an analysis carried out on the Bitcoin wallet was revealed, Wasabi. Within which we seek to detail the possible impact that this wallet can cause in the execution of illicit activities. Citing that the wallet is focused on user privacy. Therefore, it can hide important information for the authorities to track this type of activities.
Likewise, the blockchain intelligence and analysis firm, Chainalysis detailed data where it is presumed that Wasabi is being used quite frequently to hide crimes and other illegal activities. According to Chainalysis:
«Over the last three weeks, BTC in the amount of almost 50 million US dollars were deposited in Wasabi. And almost 30% came from dark web markets… This is a significant amount, relatively speaking. Since transactions on the dark web are estimated to have only 1% of total transactions.
This information was revealed to Europol, referring to the transactional movements carried out in Wasabi. Which took place during the month of April of this year.
So based on this information, the EC3 stated in its report that things were not going well for Wasabi. However, these statements, which were confirmed by Europol, have caused great controversy within the cryptographic community. Bitcoin privacy advocates have spoken out on this issue. Alleging that the blockchain, the technology on which Wasabi is based, is completely transparent and very useful. Therefore, it allows you to track transactions carried out and track down possible criminals.
It may interest you: VCrypt Decryptor, Telefónica's tool to detect files affected by VCryptor
What information does the EC3 report reveal about the wallet?
The EC3 report was divided into 2 parts: the first only details general aspects about Wasabi Wallet. While in the second part, the authorities analyzed how an intelligence agent can detect the operations carried out within the wallet. As well as the possibility of being able to “unjoin” transactions that have already been carried out. Something that, of course, is quite difficult and unlikely to do. However, it appears that Chainalysis already has tools to achieve this so that even CoinJoin transactions cannot be considered secure under certain conditions.
This topic was discussed in r/WasabiWallet the space on Reddit where the developers pointed this out. It all started with a report given by the company in which they showed great interest in tracking Wasabi transactions using CoinJoin. The trace of the report was related to the scam of PlusToken, which cost its victims about 185 million dollars. Putting this company report together with the EC3 report, it is easy to deduce that Chainalysis has dramatically improved its blockchain tracking technology. Fortunately, the same EC3 report explains that tracking CoinJoin transactions point-to-point is currently an impossible task.
The EC3 report that was available on Scribd has been deleted. Although the Bit2Me News team has been able to capture it before its elimination. Likewise, the comment on Reddit, started by an anonymous Chainalysis employee who disclosed the report, has also been erased.
Can Wasabi really cover up criminals?
With the birth of Bitcoin, the importance of user privacy when carrying out financial transactions came to life again. Before this innovation, you had to conform to the operating method of traditional systems. Which of course do not guarantee the right to privacy that all users have, and that cypherpunks have defended for several years.
However, although Bitcoin does not offer complete anonymity and privacy, it did open the doors to a new technological era. In which new tools and applications have been implemented that are designed to grant this natural right to all users who wish to do so. One of these tools is Wasabi wallet, purse Open source Bitcoin, focused on guaranteeing the right to privacy in financial transactions.
Wasabi, the privacy wallet for Bitcoin
Wasabi allows users to have complete and absolute control over their digital assets. A control that prevents these assets from being frozen or censored by any central entity. Something that doesn't seem to sit well with government entities. That more than anything they long to continue having control and decision-making power over society's finances and economy.
Therefore, Wasabi Wallet is an open source and deterministic (HD) wallet, which enjoys absolute transparency. And whose code can be audited by any developer in the world who wishes to verify the functionality and operability of Wasabi. To ensure that the wallet operates correctly and does not hide any secret details.
However, with the measures that law enforcement authorities have been taking for some time, financial privacy advocates have implemented other tools that help obfuscate their transactions. For example, the coinjo, which is a mixer that allows several transactions to be joined together to guarantee anonymity in operations.
Cryptocurrencies are not the epicenter of illegal activity
CoinJoin is a tool implemented in Wasabi to make operations difficult to trace. Since it hides the senders and receivers of each movement. It is a privacy tool, not a tool to facilitate illegal acts. However, it seems to be of great interest to see cryptocurrencies as a space that fills or facilitates illegal activity. Forgetting that it is fiat money that takes the place of honor in this sense.
The same financial and law authorities worldwide recognize that fiat money continues to be the most used in the illegal world. In fact, the same EC3 report recognizes that the use of Bitcoin for illegal purposes barely represents 1% of all transaction volume. An extremely healthy number if we consider that the volume of illegal fiat transactions is of an unknown magnitude.
Continue reading: Erebus, an attack that can censor Bitcoin
