Wasabi blacklisting update - open letter / 24 questions discussion thread

[LoyceV]

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.
~
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.

Maybe I'm mistaken, and maybe I've fallen for some carefully planned PR, but until recently I got the impression Wasabi Wallet was created as a privacy solution with very low fees. I also assumed that's why so many people were vouching for it on Bitcointalk.
My next impression is they never expected nor planned to earn a lot of money from it, but suddenly the 0.003% fee turned into substantial amounts of money, and their priorities changed because of that.

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[n0nce]

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.

Yes, this somehow makes no sense. I just created another thread just in case someone wants to discuss it and / or nopara73 wants to take some time to explain how this contradiction in his opinion makes sense.

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.
~
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.

Maybe I'm mistaken, and maybe I've fallen for some carefully planned PR, but until recently I got the impression Wasabi Wallet was created as a privacy solution with very low fees. I also assumed that's why so many people were vouching for it on Bitcointalk.
My next impression is they never expected nor planned to earn a lot of money from it, but suddenly the 0.003% fee turned into substantial amounts of money, and their priorities changed because of that.

Are you implying they 'changed priorities' ('a little less privacy' / 'enough privacy for most people' - Wasabi team statements) because they had made a lot of money? That greed got to them? I have no idea; I wouldn't do such speculations, but I honestly don't even understand their move from a 'greedy business perspective'.
If a wallet that never claimed anything about privacy makes a decision that negatively impacts privacy, not many will complain. But if you literally made your business about 'having the best privacy' and whatnot and then turn around 180 degrees, without a lot of PR, you can quickly destroy your business.

[LoyceV]

Are you implying they 'changed priorities'

I'm saying it's a possibility. I remember the days Zuckerberg said the users came first. Then, he got rich

If a wallet that never claimed anything about privacy makes a decision that negatively impacts privacy, not many will complain. But if you literally made your business about 'having the best privacy' and whatnot and then turn around 180 degrees, without a lot of PR, you can quickly destroy your business.

Could it be many of their users don't even know and simply believe the privacy claims?

[o_e_l_e_o]

I'm saying it's a possibility. I remember the days Zuckerberg said the users came first. Then, he got rich

Absolutely. Remember when Brave started and was being hailed as the next big privacy browser. Then ad companies paid them to whitelist their ads, so they did. Then Facebook paid them to let all their trackers through, so they did. Then Binance paid them to inject their code in to the browser, so they did. As soon as most people get offered money, then morals and principles quickly go out the window.

Could it be many of their users don't even know and simply believe the privacy claims?

Absolutely. They make deliberately misleading statements on their documentation which suggests that they are still anti-censorship, while making absolutely no mention whatsoever of their blacklists. They outright lie, such as the statement that they have "solved fungibility". Their website makes absolutely no mention anywhere of censorship, blacklists, blockchain analysis, etc. It is a deliberate campaign of misinformation to keep their users in the dark about what they are actually doing.

[DireWolfM14]

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.

I'm not sure it's as innocent as you describe it, but I do hope I'm wrong.  I'm starting to grow a significant amount of distrust for this development team, and their continued use of the word "fungibility" is starting to sound calculated and sinister.  Could it be that they are trying to drive a narrative by saying obviously ignorant things like "fungibility is an essential property of good money"?  What is bad money?  If it's money it's fungible regardless of how many strippers' thongs it has visited or lines of coke it has ducted.  It's neither good nor bad, it's just money.

Bitcoin is fungible with or without Wasabi.  They are not assisting in any of the fungibility properties of bitcoin but blacklisting can only hurt.  They must know this.  I cannot reconcile the idea that they are so skilled as developers, yet so ignorant to not understand the meaning fungibility.

I'm saying it's a possibility. I remember the days Zuckerberg said the users came first. Then, he got rich

Absolutely. Remember when Brave started and was being hailed as the next big privacy browser. Then ad companies paid them to whitelist their ads, so they did. Then Facebook paid them to let all their trackers through, so they did. Then Binance paid them to inject their code in to the browser, so they did. As soon as most people get offered money, then morals and principles quickly go out the window.

Brave is a good example, but to this day I don't know if they truly valued integrity at first, or if was nothing more than a brilliant marketing ploy.

Could it be many of their users don't even know and simply believe the privacy claims?

Absolutely. They make deliberately misleading statements on their documentation which suggests that they are still anti-censorship, while making absolutely no mention whatsoever of their blacklists. They outright lie, such as the statement that they have "solved fungibility". Their website makes absolutely no mention anywhere of censorship, blacklists, blockchain analysis, etc. It is a deliberate campaign of misinformation to keep their users in the dark about what they are actually doing.

Agreed, they certainly aren't making a big deal about blacklisting, nor making much of an effort to address the criticism.  I think they're hoping that if they just ignore it (us) the whole thing will just go away.  Even in the blogpost where they spilled the beans, they gaslight the ramifications by describing it as a "debate" and "for the greater good."  I'm sure they're banking on the fact that many people won't know about the blacklist, and that many of those who do won't understand the greater implications.  Just look at the other posts on their blog, they still portray themselves as the authority on private use of bitcoin.

[n0nce]

Could it be many of their users don't even know and simply believe the privacy claims?

Absolutely. They make deliberately misleading statements on their documentation which suggests that they are still anti-censorship, while making absolutely no mention whatsoever of their blacklists. They outright lie, such as the statement that they have "solved fungibility". Their website makes absolutely no mention anywhere of censorship, blacklists, blockchain analysis, etc. It is a deliberate campaign of misinformation to keep their users in the dark about what they are actually doing.

Regarding discrepancy between actions and 'their documentation', this was part of the 24 questions. Their reply probably means that what was written in docs.wasabiwallet.io, is not valid anymore.

9. This statement on your website also strongly implies you are not censoring users, which you now clearly are doing.

The only known possible 'malicious' actions that the server could perform are two sides of the same coin; Blacklisted UTXO's: Though this would not affect the users who are able to successfully mix with other 'honest/real' peers.

In general, it seems like you intentionally never changed the website until the latest redesign (which didn't affect the docs page quoted here, though). Why was there so little communication around this huge update and everything kept so 'on the low'? (big credit to o_e_l_e_o for digging these out)

Answer: What you are looking at is 1.0 documentation. 2.0 docs are still under construction. Blacklisting is still not implemented.

I guess if they're being honest, documentation of Wasabi 2.0 will not include statements such as the deliberately misleading statements you mentioned, anymore.

[o_e_l_e_o]

Even in the blogpost where they spilled the beans, they gaslight the ramifications by describing it as a "debate" and "for the greater good."

Such gaslighting is a recurring theme:

It does not come at the cost of privacy of our users and we do care about them. That's exactly why we introduced blacklisting: so we can continue to operate and users can still have privacy using Bitcoin. If we wouldn't care about our users, then we would not have sacrificed our reputation, just shut down the service and nobody would have got any privacy.

Right. "We are spying on you and censoring you because we care." What kind of gaslighting bullshit is this?

I guess if they're being honest, documentation of Wasabi 2.0 will not include statements such as the deliberately misleading statements you mentioned, anymore.

How convenient that the docs for 2.0 have been under construction this whole time! The one thing which will apparently make it clear that they are blacklisting, anti-privacy, and pro-censorship, but it just happens to not be finished yet. Plenty of time to write nonsense blog posts like the one I linked to earlier or launch their own spyware TikTok channel, but no time to write their official documentation. Oh well. But let's have a quick look at what is included so far. Specifically, this page: https://github.com/zkSNACKs/WasabiDoc/blob/docs-2.0/docs/why-wasabi/TransactionSurveillanceCompanies.md

Privacy invasions can lead to damaging or destroying bitcoin fungibility. The aim of bitcoin is to be a decentralized digital currency, but if all users are eventually required to consult centralized blacklists before accepting bitcoin, then its decentralization will be destroyed.

There appears to be no recourse for someone affected by false positive identification of exchange-disapproved transaction history. This could result in them wrongly having their coins confiscated.

Transaction surveillance company market themselves as a tool for finding "bad guys", but it's unclear which jurisdiction that applies to. For example, could one day the government of China pressure those companies into marking certain coins as "bad" because they belong to users who disagree with Chinese government policy?

Transaction surveillance companies rely on heuristics or assumptions when analyzing the blockchain. These heuristics are sometimes not true, for example, the common-input-ownership heuristic is broken by CoinJoin.

Wow. They make some very good arguments about why taint is complete nonsense and blockchain analysis companies are not to be trusted. Still no mention anywhere of the fact that they do the exact opposite of all of this and use your coinjoin fees to pay for blockchain analysis firms to spy on you. The bottom of the page even includes a list of blockchain analysis companies. Perhaps we could open a GitHub issue and ask them to put an asterisk next to the ones they work with.

[DireWolfM14]

Unfortunately, Bisq's twitter admin has stepped into this drama.  Yesterday he retweeted a post that disparaged Samourai Wallet, and many interpreted that as support for Wasabi.  Today he justified his post, which I believe has since been taken down.

The premise of the original tweet is that Samourai/Whirlpool is the FED.  I mean, of course they are.  They're all FED, and if you're smart you'll assume the same.  In fact, the only centralized mixing service that is certainly not FED is Chipmixer.  And I'm not saying that because I'm wearing their signature.  I'm wearing their signature because I believe that.  If you don't believe me, just google "chipmixer" and witness all the scams that pop up in it's place.  That would never happen if they were FED.

Now, I don't want to come off like a right-wing, tinfoil capped nutjob, but the truth is I'm treading a thin line.  Just because I have nothing to hide from the fed doesn't mean I want them to know everything about me.  I have nothing to hide from the FED today, but, I'm old enough to remember and never forget 1994 when the fed turned millions of Americans into criminals as they slept.  They did it with firearms, they can do it with bitcoin.  Your freedom is a threat.

[NotATether]

Unfortunately, Bisq's twitter admin has stepped into this drama.  Yesterday he retweeted a post that disparaged Samourai Wallet, and many interpreted that as support for Wasabi.  Today he justified his post, which I believe has since been taken down.

It appears as though the rest of the world (outside of this forum) is less and less concerned about wasabi's blacklisting and more concerned with whatether conjencture they made up against Samourai.

[Mate2237]

At first I was confused on zkSNACKs blacklisting but as you explained it in detail I came to understand it. But why it is that Wasabi Wallet is only for desktop computer? They would have Developed Android version so that those who are not using desktop can use phone for although the idea is best known for them.

[NotATether]

At first I was confused on zkSNACKs blacklisting but as you explained it in detail I came to understand it. But why it is that Wasabi Wallet is only for desktop computer? They would have Developed Android version so that those who are not using desktop can use phone for although the idea is best known for them.

The platform wouldn't matter as far as blacklisting is concerned - it's implemented server-side in the coordinator, so all builds would have to access it by default anyway.

[o_e_l_e_o]

Yesterday he retweeted a post that disparaged Samourai Wallet, and many interpreted that as support for Wasabi.

I don't take it as an endorsement of Wasabi, rather just a shot at Samourai. There has never been any love lost between Samourai and Bisq. For example, here's Samourai taking shots at Bisq a year ago: https://nitter.it/samouraiwallet/status/1388095210912092160

The premise of the original tweet is that Samourai/Whirlpool is the FED.  I mean, of course they are.

Samourai are maybe spying on you, but you can still achieve privacy by running your own server. Wasabi are provably spying on you, and there is nothing you can do about it. I wouldn't use either.

Meanwhile, here is nopara73 claiming responsibility for the fact that coin control is in use today, while also saying that you are all too stupid to use it and therefore shouldn't have it: https://teddit.net/r/WasabiWallet/comments/w8r7pw/why_i_wont_be_using_v2_of_wasabi_after_having_it/ihtvm0p/. He also slips in a quick reminder that they are only bastion of hope for bitcoin fungibility, despite actively treating bitcoin as non-fungible. Excuse me while I roll my eyes so hard I have to go lie down.

[DireWolfM14]

Samourai are maybe spying on you, but you can still achieve privacy by running your own server. Wasabi are provably spying on you, and there is nothing you can do about it. I wouldn't use either.

Yeah, the SPV server issue is easily resolved by running your own instance of bitcoin core or a node with an Electrum server.  Samourai can spy on you if you use their servers, but how can we insure they're not spying on you address by address when using Whirlpool?  I may not be as technically sophisticated as many here, but I don't see how we can ensure that's not the case.

Meanwhile, here is nopara73 claiming responsibility for the fact that coin control is in use today, while also saying that you are all too stupid to use it and therefore shouldn't have it: https://teddit.net/r/WasabiWallet/comments/w8r7pw/why_i_wont_be_using_v2_of_wasabi_after_having_it/ihtvm0p/. He also slips in a quick reminder that they are only bastion of hope for bitcoin fungibility, despite actively treating bitcoin as non-fungible. Excuse me while I roll my eyes so hard I have to go lie down.

Thanks for the link.  I can't believe the arrogance of that post, just wow.  "Bitcoin Core and Electrum had coin control before, but I informed the world how cool coin control is."  Here's a comment from that post that has me laughing out loud and fuming at the same time:

The thing is, making Bitcoin fungible is not an easy task and all odds are against us.

@nopara73, get a grip, dude.  You're not making bitcoin fungible any more than you're making the US dollar fungible.  You don't have that kind of clout, so stop making a fool of yourself by saying asinine shit like that.  Bitcoin is fungible with or without you, and you're not helping it's fungibility at all.  Quite the contrary, your shenanigans can only hurt.

[o_e_l_e_o]

I may not be as technically sophisticated as many here, but I don't see how we can ensure that's not the case.

It uses something known as a Chaumian coordinator (as does Wasabi). Each participant in the coinjoin connects to the coordinator via Tor, and supplies the coordinator with their inputs as well as their blinded outputs. The coordinator signs these blinded outputs and returns them to the participants. The participants then unblind their outputs and reconnect to the coordinator via a new identity, and then send back the now unblinded outputs. The coordinator can verify these unblinded outputs are correct since they still carry the correct signature the coordinator gave them earlier. The coordinator now has all the inputs and all the outputs, but cannot match them up.

It would obviously be possible to introduce a vulnerability in this process, but given that both wallets are open source, any vulnerability should get picked up and revealed.

Bitcoin is fungible with or without you, and you're not helping it's fungibility at all.  Quite the contrary, your shenanigans can only hurt.

Call me crazy, but here's an idea to promote bitcoin fungibility: Don't use coinjoin fees to directly fund blockchain analysis firms.

[dkbit98]

Unfortunately, Bisq's twitter admin has stepped into this drama.  Yesterday he retweeted a post that disparaged Samourai Wallet, and many interpreted that as support for Wasabi.  Today he justified his post, which I believe has since been taken down.

I don't want to ruin day to anyone but I think that some people working on Bisq exchange are in the same time working on new Wasabi wallet.
That could have good and bad sides depending how things go in future with regulations and blacklisting transactions.
I can't be 100% about this connections and I don't have any evidence for this claims, it's all speculation.

If you don't believe me, just google "chipmixer" and witness all the scams that pop up in it's place.  That would never happen if they were FED.

Scammers don't really care who is the fed and who isn't, they are cloning any popular service because they can profit from this and steal money.
I don't know how can you be so sure that Samourai/Whirlpool or anything else is a part of fed or some other government agency, especially if something is open source.
They usually like to make things closed source like it was done in the case with honeypot Anom smartphones with Arcane OS that was sold to criminals for ''secure communication''.

Wasabi are provably spying on you, and there is nothing you can do about it. I wouldn't use either.

I don't think this statement is true, at least not for now, until proven differently.
Wasabi is not spying on you and with Tor enabled they don't even know your real IP address.
Centralized exchanges are spying people for sure. they are blacklisting, freezing coins, closing accounts, and most people are still using them.

[n0nce]

[...]
Wow. They make some very good arguments about why taint is complete nonsense and blockchain analysis companies are not to be trusted. Still no mention anywhere of the fact that they do the exact opposite of all of this and use your coinjoin fees to pay for blockchain analysis firms to spy on you. The bottom of the page even includes a list of blockchain analysis companies. Perhaps we could open a GitHub issue and ask them to put an asterisk next to the ones they work with.

I'm doing my best attempt at devil's advocate here and trying to construct a scenario that in their eyes might look 'benign' / 'for the users': (objections in parentheses)

• If your input is rejected from Wasabi CoinJoin, at least it doesn't get confiscated. So you can still figure out what to do with it. (Not sure how though, without coin control)
• If your input was able to be mixed, you have pretty high probability of not getting it confiscated from a centralized exchange. (Easier to just avoid CEX)
• Chain analysis company can't spy due to not having a link between Bitcoin address and identity / IP / KYC.

Another idea:

• Blacklist will never be activated / implemented, no information will ever be shared with chain analysis companies. (No way for users to verify this is happening or not)
• Official statement was just a regulatory obligation / something to 'point to' if someone questions them about AML.
• Then they can say 'oh we absolutely don't work with criminals by checking all UTXOs against a blacklist' while actually not doing any of it. (No way for users to verify this is happening or not)

I would support such a GitHub issue; sincerity and openness is important..

Unfortunately, Bisq's twitter admin has stepped into this drama.  Yesterday he retweeted a post that disparaged Samourai Wallet, and many interpreted that as support for Wasabi.  Today he justified his post, which I believe has since been taken down.

It appears as though the rest of the world (outside of this forum) is less and less concerned about wasabi's blacklisting and more concerned with whatether conjencture they made up against Samourai.

I believe that's usual social media drama; all bullshit and waste of time - that's why I stay away from it.

If you don't believe me, just google "chipmixer" and witness all the scams that pop up in it's place.  That would never happen if they were FED.

Scammers don't really care who is the fed and who isn't, they are cloning any popular service because they can profit from this and steal money.
I don't know how can you be so sure that Samourai/Whirlpool or anything else is a part of fed or some other government agency, especially if something is open source.

This is a very risky assumption... Take Ghidra as an example; it's open-source, too... https://github.com/NationalSecurityAgency/ghidra/
As for whether Samourai, Wasabi or ChipMixer are part of the FED; I don't think there's any way for anyone to know for sure.

[witcher_sense]

I'm doing my best attempt at devil's advocate here and trying to construct a scenario that in their eyes might look 'benign' / 'for the users': (objections in parentheses)

• If your input is rejected from Wasabi CoinJoin, at least it doesn't get confiscated. So you can still figure out what to do with it. (Not sure how though, without coin control)

nopara73 claims that they didn't remove the coin control feature but rather improve it significantly by making it fully automatic and insusceptible to human error and bad privacy practices. But if you think you know better what to do with your own coins and how to spend them in the correct way, you can still choose UTXOs manually using the "secret" combination CTRL+D+C.

• If your input was able to be mixed, you have pretty high probability of not getting it confiscated from a centralized exchange. (Easier to just avoid CEX)

This statement is based on the assumption that Wasabi Wallet developers care about ordinary users and don't want them to get in trouble because them using a "privacy-oriented" wallet. But the claims made by zkSNACKS CEO here and here contradict this assumption: their main objective is to maximize revenue by flirting with regulatory bodies and institutional investors, which is why they introduced blacklisting -  to protect themselves and also rich investors at the expense of ordinary people seeking for privacy tools.

• Chain analysis company can't spy due to not having a link between Bitcoin address and identity / IP / KYC.

If they couldn't spy, why would they work with people controlling a mixing coordinator? I think that a CoinJoin coordinator requesting the information about particular UTXOs is in itself valuable information that may help chain surveillance firms deanonymize at least some transactions.

Stating you have solved fungibility while enforcing non-fungibility is an outright lie, regardless of personal opinions.

Let us call it "permissioned" fungibility or "selective" fungibility - the coins that got through Wasabi Wallet filter should now be considered fungible because their previous history is unknown or uncertain. All other coins, including those coming from competitors such as Whirlpool, are obviously not.

[dkbit98]

This is a very risky assumption... Take Ghidra as an example; it's open-source, too... https://github.com/NationalSecurityAgency/ghidra/
As for whether Samourai, Wasabi or ChipMixer are part of the FED; I don't think there's any way for anyone to know for sure.

I never said this is impossible, we know open source Tor is made by them, and some people even claimed that Bitcoin was a government agency project.
I can't be sure about anything this days and I am not trusting anything with 100%, open source or not.

nopara73 claims that they didn't remove the coin control feature but rather improve it significantly by making it fully automatic and insusceptible to human error and bad privacy practices. But if you think you know better what to do with your own coins and how to spend them in the correct way, you can still choose UTXOs manually using the "secret" combination CTRL+D+C.

Did you try using this secret combination to enable coin control in Wasabi wallet?
This is probably working in wiNd0ws and opening new window, but I am not sure if same combination is used in Linux and Mac os.
I know most of the people don't even use coin control, but more advanced users can't imagine a good wallet that don't have this option.

[n0nce]

I'm doing my best attempt at devil's advocate here and trying to construct a scenario that in their eyes might look 'benign' / 'for the users': (objections in parentheses)

• If your input is rejected from Wasabi CoinJoin, at least it doesn't get confiscated. So you can still figure out what to do with it. (Not sure how though, without coin control)

nopara73 claims that they didn't remove the coin control feature but rather improve it significantly by making it fully automatic and insusceptible to human error and bad privacy practices. But if you think you know better what to do with your own coins and how to spend them in the correct way, you can still choose UTXOs manually using the "secret" combination CTRL+D+C.

If the automatic coin control really works as well as doing it manually, I'm sure it's a great feature for the large amount of people that doesn't know anything about coin control and doesn't use it.
But it shouldn't be made this difficult to enable manual coin control. I would like to see a GUI toggle right up front in the setup screen to be honest. And easy to find afterwards.

I'm not exactly sure if you get a 'preview' before you sign and broadcast a transaction in Wasabi, but it's something Sparrow does and that I really appreciate. With such a view, I may be comfortable to use auto coin control, since I could quickly check myself that it didn't mess anything up and indeed did not jumble UTXOs together or any other weird stuff that I don't like.


[source: https://www.youtube.com/watch?v=GSHyKTigNQY]

• Chain analysis company can't spy due to not having a link between Bitcoin address and identity / IP / KYC.

If they couldn't spy, why would they work with people controlling a mixing coordinator? I think that a CoinJoin coordinator requesting the information about particular UTXOs is in itself valuable information that may help chain surveillance firms deanonymize at least some transactions.

First of all, their definition of spying may be different from ours; for them as long as there is no IP attached to a UTXO (due to using Tor) they probably believe no spying is possible.
And regarding what the chainalysis company gets from the deal, well, they get paid right. So even if they gained nothing in terms of information, they would get cash money from Wasabi / zkSNACKs.

Stating you have solved fungibility while enforcing non-fungibility is an outright lie, regardless of personal opinions.

Let us call it "permissioned" fungibility or "selective" fungibility - the coins that got through Wasabi Wallet filter should now be considered fungible because their previous history is unknown or uncertain. All other coins, including those coming from competitors such as Whirlpool, are obviously not.

Nope, this doesn't work. The moment you start making distinctions, you introduced non-fungibility. Either something is fungible or it is not. It can't be 'a little' fungible.

[NotATether]

This is a very risky assumption... Take Ghidra as an example; it's open-source, too... https://github.com/NationalSecurityAgency/ghidra/

So apparently the NSA is a collective of "Java boffins" with the exception of Ghidra, which is good on paper, but for reversing Win32 programs, IDA is still ahead on that because it can locate the system call names from Windbg files.