Wasabi blacklisting update - open letter / 24 questions discussion thread

[o_e_l_e_o]

All this operation appears to be decoy tactics, while in background they needed to buy some time while moving from Gibraltar to Seychelles.

Any source for this?

Their legal documents for Version 2 already state that zkSNACKs is based in Seychelles and has done for over a month already. If they are already based there, and the whole point of their move was to avoid blacklisting, then why are they still talking about blacklisting and not reversing their position?

That wouldn't make any sense: they could have quietly moved from one tax haven to an even bigger tax paradise without supporting and encouraging the foolish concept of tainted Bitcoins.

Completely agree with this. They are not blacklisting yet, but are still operating, meaning there is no legal requirement forcing them to blacklist or be shutdown. So there is nothing stopping them from continuing to operate without blacklisting while they move jurisdictions.

And even if this were the case, then the honest thing to do would still be to direct people to other coordinators while they spin up a different coordinator in a different jurisdiction, rather than supporting this taint nonsense.

[NotATether]

Unless all blockchain analysis companies cooperate in terms of what is tainted and what isn't, I would expect that they show different results and taint scores.

And now here lies the problem - nobody can even agree on the taint of the UTXOs so they will end up like the antivirus companies, who cannot even agree on even whether a file is malware, let alone agree on the names of the malware: "This EXE is safe, this RAR file is not (simply because only pirates use this extension), this .DOCX with embedded macro gibberish is safe, but this one is not!"

(N.B. the entire model of anti-viruses on microsoft windows is a complete joke, as they all depend on MS ultimately to integrate their codes into their closed-source kernel. Let's not turn Bitcoin into a fragmented abomination policed by chainanals behaving like rogue AV companies.)

[dkbit98]

Their legal documents for Version 2 already state that zkSNACKs is based in Seychelles and has done for over a month already. If they are already based there, and the whole point of their move was to avoid blacklisting, then why are they still talking about blacklisting and not reversing their position?

They are not openly talking about blacklisting anymore, but there is certainly a big reaction from other people about initial news, and bitcointalk forum is included.
I don't know what's the real truth behind this story but let's give them benefit of the doubt, until (or if) we see moving into wrong direction.

And even if this were the case, then the honest thing to do would still be to direct people to other coordinators while they spin up a different coordinator in a different jurisdiction, rather than supporting this taint nonsense.

Listening to one of their developers speaking I am sure there are people now actively working on creating alternative coordinators with different jurisdiction.
You can't expect them to come up openly and show all their cards in public, that would be like shooting yourself in a foot.
Tainted coins concept is a stupid )and dangerous) idea, but it was not invented by Wasabi wallet, centralized exchanges first started doing this and lot of rich people supported it.
I am not defending Wasabi, but I am taking more neutral position here.

[o_e_l_e_o]

They are not openly talking about blacklisting anymore, but there is certainly a big reaction from other people about initial news, and bitcointalk forum is included.

They barely openly talked about it even when they announced it. It's not really surprising why - obviously they don't want a lot of publicity around the fact that a so called "privacy wallet" is now anti-privacy and pro-censorship.

I don't know what's the real truth behind this story but let's give them benefit of the doubt, until (or if) we see moving into wrong direction.

They've been moving in the wrong direction solidly since this announcement. They have doubled down on a lot of things and continued to attack others to such an extent that I cannot believe it is all just some clever ruse.

Listening to one of their developers speaking I am sure there are people now actively working on creating alternative coordinators with different jurisdiction.

Well, they've had loads of time to do it, and apparently no pressure to implement blacklisting. So why not launch an alternative coordinator first, change it the default, and then announce blacklisting on zkSNACKs? Makes no sense.

[NotATether]

Well, they've had loads of time to do it, and apparently no pressure to implement blacklisting. So why not launch an alternative coordinator first, change it the default, and then announce blacklisting on zkSNACKs? Makes no sense.

No pressure is the key - they might not implement blacklisting on the default coordinater for years, or may even drop that initiative entirely if they suspect that its not worth the effort.

[n0nce]

Let's assume your statement regarding Bitcoin price was valid; what does it matter?
If it is higher or lower, in the end what ultimately counts in my opinion, is if Bitcoin is good money. This can be achieved at a price of $100,000 or $1,000 per coin; doesn't matter since we have enough decimal places.

It does matter.
An invention that in theory is very good, because it is decentralized, autonomous and limited in its production, for it to be really good it lacks that people believe in it and that is reflected in the price.
If the price of Bitcoin were $0.01 today, after 13 years, it would still be a good invention in theory but bad in practice. And this forum would be long dead, for example.

Why would it be 'bad in practice', though? I guess a lower price would be correlated with lower market capitalization, which may be the result of less people buying Bitcoin (to then potentially use it). But I'm not sure how a lower price would directly make Bitcoin less usable or a higher price make it more usable. Ultimately, when it comes to the utility / usability of Bitcoin, I'd say centralized exchanges may do more harm than good for various reasons. To summarize, their whole business concept relies on people not withdrawing and holding and / or using their coins as intended, but leaving them on the platform. It manifests itself in exaggerated withdrawal fees and advertisements that are purely based on the 'story' that cryptocurrencies are primarily an investment asset.
As well as scaring users that their coins can be frozen stolen by the exchange if they dare to withdraw them, use them (e.g. for gambling) and send them back to the exchange to realize fiat profits.

Their legal documents for Version 2 already state that zkSNACKs is based in Seychelles and has done for over a month already. If they are already based there, and the whole point of their move was to avoid blacklisting, then why are they still talking about blacklisting and not reversing their position?

They are not openly talking about blacklisting anymore, but there is certainly a big reaction from other people about initial news, and bitcointalk forum is included.
I don't know what's the real truth behind this story but let's give them benefit of the doubt, until (or if) we see moving into wrong direction.

I appreciate your more neutral position; and in general I always welcome having a healthy discussion instead of just an angry mob of people that all share one opinion.
For me personally, the 'wrong direction' was chosen the moment they decided to even consider blacklisting as a viable option, even before they announced it publicly - no matter if they ever did it or not. The next step 'into the wrong direction' for me was them defending the decision over and over, in written and spoken form and giving me a totally untrustworthy impression of their understanding of privacy (especially in the spoken Twitter group chat thing), see below.

11. We're talking about political refugees, government critics and investigative journalists for example; these are amongst the ones needing privacy the most (and therefore switching to Bitcoin in the first place). But in https://twitter.com/HillebrandMax/status/1537503087987937283, at 1:32:10, Aviv Milner says that 'the average person who's using the product especially if you're not in a situation where you're your life depends on it and there's a large government organization that's well funded that's looking to to find you and hunt you down if you're not in that extreme situation then wasabi provides an incredible amount of privacy'. So it means WasabiWallet is not the 'ultimate privacy solution' for Bitcoin after all; just maybe for 'getting a little privacy' or how should we call that? Someone who really, really needs actual privacy cannot rely on Wasabi then? What should they use in your opinion? On one hand, you say Wasabi is the only / best option for privacy, but then admit it doesn't provide enough privacy if someone's life depends on it; so what's the point of it all then? We don't believe privacy is something quantifiable; it's more a yes-or-no kind of deal. Either your UTXOs and transactions are private or they're not.

The last step 'into the wrong direction' for me, was how they advertised the 'first Wasabi 2.0 CoinJoin not using the blacklist' as a 'promotional feature'. Besides the fact that privacy is a serious thing for me and shouldn't be used as a marketing gimmick that is turned on or off based on their mood or the daily occasion, I don't get how it's so risky for them to not have a blacklist when it comes to business partners and whatnot, but at the same time they can opt not to use it for such an event. Doesn't really check out for me.

Wanna become part of the first ever Wasabi 2.0 main net CoinJoin?

There’s no UTXO filtering, the minimum amount to join is 0.00005 BTC, small amounts don’t pay a coordination fee.

Imagine 'there is no UTXO filtering' is used like some sort of 'goodie' or 'specialty' *just today!*-type deal.. Of a privacy wallet. Sir, I can send any UTXO to anyone, on any day of the week (not just when Wasabi is holding a 'special event'), by just using a different wallet. You're living in a different universe.

Well, they've had loads of time to do it, and apparently no pressure to implement blacklisting. So why not launch an alternative coordinator first, change it the default, and then announce blacklisting on zkSNACKs? Makes no sense.

No pressure is the key - they might not implement blacklisting on the default coordinater for years, or may even drop that initiative entirely if they suspect that its not worth the effort.

Then why would they announce it and double-down on it so many times? I'm just a bit puzzled right now if they really end up not implementing using it.

[Poker Player]

Why would it be 'bad in practice', though?

In the same way that $1M is of no use to you on a desert island.

If a deflationary currency as of today after all the mining of 13 years, the entire market cap was $19k would mean that the theory that it is deflationary does not match the practice, as the price would have remained more or less stable in 13 years instead of growing, which is what it should have done, as opposed to fiat currencies, which are inflationary and against which Bitcoin was created.

I also would not want us not to get bogged down in discussing this unrealistic example.

The point I was trying to make is that people tend to like the price of Bitcoin to go up. If you bought Bitcoin at $100 and have been able to hold it until today, you are certainly going to be much happier if it is worth $20k than if it goes back down to $100.

Centralized exchanges, as bad as they are, have provided liquidity and ease of exchange that have helped a lot in driving the price up.

I'd say centralized exchanges may do more harm than good for various reasons.

I could agree with you if we specified but I don't want to derive this debate into an off-topic because the main thing is Wasabi's Blacklisting, but I'm happy to continue debating if you like. I will wait to see how the events of what dkbit98 comments about changing their stance on blacklisting end up.

[PrivacyG]

I do not buy the rumor that Wasabi is using blacklisting as a decoy while buying time to move to Seychelles.  I have two reasons.  In this case, I think a reply to n0nce's open letter would have been avoided and declined by them.  And secondly, why would they have to use 'decoy tactics'?  It is not like they just robbed a bank and have to quickly flee the country.  I do not think there is anything illegal in moving things to Seychelles, or am I missing a key piece of the puzzle here?

-
Regards,
PrivacyG

[o_e_l_e_o]

Umm, what the actual fuck is this: https://nitter.it/wasabiwallet/status/1550510985022169089

Check us out on our Tik-Tok!
tiktok.com/@wasabi.wallet

TikTok is one of the worst privacy invasions in existence (a few selected links at the bottom, but you can find thousands more with a simple web search). So much so, that the FCC is recommend that the app is banned in the US. Here's a quote from FCC Commissioner Brendan Carr:

TikTok is said to collect “everything”, from search and browsing histories; keystroke patterns; biometric identifiers—including faceprints, something that might be used in “unrelated facial recognition technology”, and voiceprints—location data; draft messages; metadata; and data stored on the clipboard, including text, images, and videos.

So Wasabi want its users to follow them on TikTok, therefore linking the fact that they use Wasabi to their real identity, their biometrics and facial scan, their location, and all their clipboard data, for starters. Did you so much as copy one of your addresses? Maybe you looked up your transaction on a block explorer? Maybe you saved a couple of screenshots of your wallet, or some back up file? Great, now we've linked your entire wallet to your real identity too. Privacy = zero.

This is mad. Even if you want to argue that this isn't actively malicious, it is so incredibly naive that it beggars belief coming from a team which are supposedly focused on privacy.


https://www.yahoo.com/entertainment/tiktok-circumvent-apple-google-privacy-140000271.html
https://www.engadget.com/fcc-commissioner-google-facebook-ban-tik-tok-064559992.html
https://techcrunch.com/2021/06/03/tiktok-just-gave-itself-permission-to-collect-biometric-data-on-u-s-users-including-faceprints-and-voiceprints/
https://www.wsj.com/articles/tiktok-tracked-user-data-using-tactic-banned-by-google-11597176738
https://www.gizmodo.com.au/2022/07/tiktok-app-phone-access/

[PrivacyG]

Umm, what the actual fuck is this: https://nitter.it/wasabiwallet/status/1550510985022169089

Check us out on our Tik-Tok!
tiktok.com/@wasabi.wallet

Next up on Wasabi's Twitter account: Check out our new Wasabi Smart Box!  $59.99 for pre-orders!  Link your Smart Box to Alexa and start Coin Joining by simply asking out loud!

Man, this is getting worse almost every day it seems.

-
Regards,
PrivacyG

[DireWolfM14]

Umm, what the actual fuck is this: https://nitter.it/wasabiwallet/status/1550510985022169089

That's what I was thinking!  Two ticktock videos, 17 seconds of my life invested, and absolutely no twerking?!?  What is this world coming to? [/sarcasm]

Ticktock isn't a social media app, it's a CCP surveillance app.  Any and all infringements on your privacy while using the app are specifically by design.  That's probably why the version Ticktock that's available in China is used completely differently, for example: https://video.foxnews.com/v/6309696840112#sp=show-clips

But I do get your point, a privacy wallet that's so out-of-touch, they think they'll find clients by advertising to those who have no clue how to secure their own privacy.

[BlackHatCoiner]

Wasabi developers continue acting childishly. TikTok, ok. Next. 

Would the world be better off with purely P2P transactions as Satoshi devised? Surely, but the price would not have gone over $1k.

Um, evidence?

Sure, marketing did help, but it is certainly not the main reason we're currently paying 22 grand for a bitcoin. Yes, purely P2P transactions would have lessened market manipulation and blunted the idea that bitcoin is an investment. Without Coinbase, Binance and the rest, we would have less benighted people who would be willing to hand out personal data and money for the feeling of acquiring something they don't even understand. Wouldn't that be better?

[o_e_l_e_o]

Now i'm almost sure they hire PR people who don't know much about Wasabi or privacy.

Which would be bad enough on its own, but they guy in the second video is Norbert Lévai, the project manager at zkSNACKs, meaning you can't pass this off as a PR fuck up. The highest level people in Wasabi are promoting Chinese spyware to all their users. And the Wasabi Twitter account has never struck me as being run by some random PR hire, but by the developers themselves.

But I do get your point, a privacy wallet that's so out-of-touch, they think they'll find clients by advertising to those who have no clue how to secure their own privacy.

I honestly can't wrap my ahead around what is going on here. They are either so completely out of touch with all things privacy that they genuinely have no idea TikTok is spyware, or they are aware of this fact but the just don't care at all. Which is worse?

[DireWolfM14]

I honestly can't wrap my ahead around what is going on here. They are either so completely out of touch with all things privacy that they genuinely have no idea TikTok is spyware, or they are aware of this fact but the just don't care at all. Which is worse?

How does anyone involved in cryptocurrency to the level of developing a "privacy wallet" not know the implications of using this particular app?  I thought everybody knew that TikTok was CCP spyware.  The former president of the US attempted to block them from operating their service in the US, and settled on the ByteDance (the parent company,) creating a service specifically for the US and storing all the data on US servers (it's worth noting that the current administration has reversed those restrictions.)

I am of the opinion that blocking UTXOs based on arbitrary taint-proclamations was a really stupid move, but I never thought of the Wasabi development team as stupid.  I mean, they're software developers, how can they be this stupid?  Right?  It makes me think they are in the "don't care" phase and are just trying to shill their wallet in any way they can, without any real concern for their clients' privacy.

Wasabigate keeps getting muddier and murkier.

[Agbe]

The zkSNACKs coordinator is clearly the largest and has substantially more liquidity than others; hence, this is why most people use it. Wasabi Wallet was built in a way that the developers and zkSNACKs don't collect any data about their users. We do not care who you are and what you do with your bitcoins! We don't want to know. Unfortunately, some people do collect data, attach it to bitcoin addresses and make decisions based on that information. The company is getting in trouble and harassed because apparently some of the users of our coordinator are so-called “criminals”, according to the people keeping up these databases.

We are not saying that the database is correct, as we do not agree with most of the classifications but we want to be able to see the same information that apparently others already have. We don’t want to do any chain surveillance ourselves, so we would rather just buy that information from others. We are not interested in applying sanctions or other immoral crap. We are exercising our right as a company to choose not to serve those people who could get us in trouble and the ones whom we wouldn’t want to support for ethical reasons.

I have a disturbing question on this thread. Although I am not a programmer and I can not develop an app or a software but I can design website with Adobe Dreamweaver CSS and HTML code. That means I have small idea on different a website even though I am not a professional.

zkSNACKs company targeted audience are the bitcoiners, which is other cryptocurrency users can not user the software to avoid confusion of coins. Wasabi Wallet company does not or have nothing to do with users data and the information, yes it is possible since the software is designed to be open source but the software was developed and lunched by human not robot, that means they most have access to the users data to set and make things easier for the users. If the company do not know the Users data then how will they know the total number of users of the wallet? If a particular User account is having issue, how will they resolved it?

Finally. From my point of view your (OP) post history, I came to the conclusion that you are a computer software engineer plus a programmer that is why I am asking you. Keep it up. I really like your threads. You did full review on hardware and software analysis.

[n0nce]

Now i'm almost sure they hire PR people who don't know much about Wasabi or privacy.

Which would be bad enough on its own, but they guy in the second video is Norbert Lévai, the project manager at zkSNACKs, meaning you can't pass this off as a PR fuck up. The highest level people in Wasabi are promoting Chinese spyware to all their users. And the Wasabi Twitter account has never struck me as being run by some random PR hire, but by the developers themselves.

I was about to say. The degree of incompetence in the highest levels, for me started to really manifest itself when they spoke in those Twitter 'spaces' (I believe that's what those were called?) - those voice-only livestreams where everyone can listen and join to ask questions.
When they threw around phrases such as 'incredible privacy, if you're not in an extreme situation'. Or 'Maybe there is a little more privacy in Lightning'. Just the word 'maybe' is so wrong in this context. If you are a lead developer of what's supposedly the 'last hope for Bitcoin privacy' you should have a very clear idea of what existing solution is most private, why, how and to what degree. As well as knowing exactly how much more private your solution is, and if it's not, ask yourself why you're even developing it.

Them creating an official TikTok account just highlights this again. I'm not sure how they were even able to code a CoinJoin implementation (some amount of skill and knowledge is required), while at the same time apparently being so extremely naive on the whole subject of privacy.
It gives me real 'well we have nothing to hide so we don't need to worry about TikTok data privacy problems' vibes. Just to reiterate: 'I have nothing to hide' is the prime example of a total lack of understanding of privacy.

But I do get your point, a privacy wallet that's so out-of-touch, they think they'll find clients by advertising to those who have no clue how to secure their own privacy.

I honestly can't wrap my ahead around what is going on here. They are either so completely out of touch with all things privacy that they genuinely have no idea TikTok is spyware, or they are aware of this fact but the just don't care at all. Which is worse?

It must be one of the two; but I can't understand how the intelligence required to implement CoinJoin functions simultaneously with being completely oblivious and naive with regards to the TikTok privacy catastrophe.

The zkSNACKs coordinator is clearly the largest and has substantially more liquidity than others; hence, this is why most people use it. Wasabi Wallet was built in a way that the developers and zkSNACKs don't collect any data about their users. We do not care who you are and what you do with your bitcoins! We don't want to know. Unfortunately, some people do collect data, attach it to bitcoin addresses and make decisions based on that information. The company is getting in trouble and harassed because apparently some of the users of our coordinator are so-called “criminals”, according to the people keeping up these databases.

We are not saying that the database is correct, as we do not agree with most of the classifications but we want to be able to see the same information that apparently others already have. We don’t want to do any chain surveillance ourselves, so we would rather just buy that information from others. We are not interested in applying sanctions or other immoral crap. We are exercising our right as a company to choose not to serve those people who could get us in trouble and the ones whom we wouldn’t want to support for ethical reasons.

I have a disturbing question on this thread.
...
Wasabi Wallet company does not or have nothing to do with users data and the information, yes it is possible since the software is designed to be open source but the software was developed and lunched by human not robot, that means they most have access to the users data to set and make things easier for the users. If the company do not know the Users data then how will they know the total number of users of the wallet? If a particular User account is having issue, how will they resolved it?

Hey Agbe; it's possible that the website does collect user information, while the application doesn't. The only thing that can be verified is the code that is available open-source and we only have that for the Wasabi application. About issues with user accounts, I don't think that's a problem either since a proper software wallet shouldn't have 'accounts' at all in the first place. Download numbers can also be tracked without tracking users; that's just a matter of counting accesses to a certain file on your webserver (or in their case just done through GitHub).

The issue at hand is that they are discriminating between coins (UTXOs). Even propagating and legitimizing the idea of this (called 'taint') is extremely anti-Bitcoin, which they even claimed themselves in the past. That's why I reference it in the 24 questions. The whole idea of Bitcoin is to have free(dom) money that everyone can send to anyone, anytime, anywhere, without intermediaries and without the possibility of getting a payment intercepted, rejected, blocked, confiscated, et cetera.

In interviews / 'Twitter spaces', official statements and now through creating a TikTok page, they are giving the impression of having very little clue about privacy and extreme naiveté, which is obviously terrible coming from a 'privacy wallet'.

[NotATether]

TikTok is one of the worst privacy invasions in existence (a few selected links at the bottom, but you can find thousands more with a simple web search). So much so, that the FCC is recommend that the app is banned in the US.

This particular app is a fucking abomination, and makes Facebook's privacy invasion look like angels by comparison (at least FB openly admits it!).

Reflecting on it, it's quite sad how it has captured most of the young generation and making them dumb. There are a few tough bunches who resisted subjugation (such as quite proudly myself), but it's grasp is near total, that I even read somewhere that the US. Army is using it for promotion.

[o_e_l_e_o]

How does anyone involved in cryptocurrency to the level of developing a "privacy wallet" not know the implications of using this particular app?  I thought everybody knew that TikTok was CCP spyware.

At least someone on their team must have known and informed them. Which means the only conclusion you can reach is "They don't care". They don't care that they are encouraging their users to download spyware on their devices and potentially link every bitcoin wallet and address on their device with their real identity. What have you got to hide, right!?

It makes me think they are in the "don't care" phase and are just trying to shill their wallet in any way they can, without any real concern for their clients' privacy.

I reached this conclusion when they tried to defend asking a blockchain analysis company to spy on their users as somehow good for privacy. This just cements that conclusion.

Even propagating and legitimizing the idea of this (called 'taint') is extremely anti-Bitcoin, which they even claimed themselves in the past.

Which they themselves still claim:

This leaves us with fungibility as the primary property to focus. The most important thing one can choose to work on is Bitcoin’s fungibility.

This makes Wasabi Wallet 2.0, the missing piece of Bitcoin: it solves its fungibility, as far as English speaker, hot desktop wallet users are concerned.

I cannot fathom how someone can write articles claiming they have "solved fungibility" while simultaneously enforcing arbitrary blacklists. Those two positions are mutually exclusive. That is not up for debate; that is a simple fact. You cannot state you have solved the issue of some bitcoin being discriminated against while you are actively discriminating against some bitcoin.

[n0nce]

Even propagating and legitimizing the idea of this (called 'taint') is extremely anti-Bitcoin, which they even claimed themselves in the past.

Which they themselves still claim:

This leaves us with fungibility as the primary property to focus. The most important thing one can choose to work on is Bitcoin’s fungibility.

This makes Wasabi Wallet 2.0, the missing piece of Bitcoin: it solves its fungibility, as far as English speaker, hot desktop wallet users are concerned.

I cannot fathom how someone can write articles claiming they have "solved fungibility" while simultaneously enforcing arbitrary blacklists. Those two positions are mutually exclusive. That is not up for debate; that is a simple fact. You cannot state you have solved the issue of some bitcoin being discriminated against while you are actively discriminating against some bitcoin.

Interesting, I've missed this article. To be fair, I don't follow Wasabi's every step.
One reason for the discrepancies between statements, ideas and actions might also simply be because of varying degrees of technical understanding, privacy understanding, degrees of importance that different people on the team put into their values and varying degrees of greed and willingness to throw out such values for profit.

It's possible that some Wasabi developers do believe in fungibility and oppose blacklists, but are overruled by a slight majority within the team. I have no idea, I'm just trying to give them a little 'benefit of the doubt' and making sense of this mess they've put themselves in. At the same time, I'm the first to point out issues and as such created the 24 questions and this whole thread, of course.

[o_e_l_e_o]

One reason for the discrepancies between statements, ideas and actions might also simply be because of varying degrees of technical understanding, privacy understanding, degrees of importance that different people on the team put into their values and varying degrees of greed and willingness to throw out such values for profit.

I have no doubt that different people on the team feel differently about their new anti-privacy and pro-censorship stance, but that's why I made the point in my last point about the two positions being mutually exclusive. It does not matter if some individuals have different values, understandings, ethical dilemmas, moral considerations, and so on. Stating you have solved fungibility while enforcing non-fungibility is an outright lie, regardless of personal opinions.

Also worth pointing out that the article linked was written by nopara73, who has obviously been very vocal in defending their decision to enforce blacklists and censorship.