Samourai Wallet seized by the feds

[NotATether]

What makes you think that they are not going to target Wasabi next?

Targeting Wasabi what for? They're not even a honeypot. They're officially paying for mass surveillance software and their privacy software is broken. What else could the government ask for?

Governments are not known to be very savvy, and with this recent anti-money laundering craze going on over there, it wouldn't surprise me if they see Wasabi as facilitating those kind of transactions. After all, they're the only large coordinator left now that Samourai's gone.

*Actually an elevated risk, since they have not implemented any blacklisting yet so nothing is actually getting blocked.

[1714885154]

1714885154

[1714885154]

1714885154

[RickDeckard]

Coinjoins aren't custodial, so there's no funds they can seize. The Feds are only able to access the data of Samourai's users since their wallet was designed to collect xpub addresses and IP addresses by default.

As if it wasn't possible to use it over Tor since 2019, or a VPN. Taking shots at your competitor even after they have been extinguished -- the kind of class I would expect from you.

Besides, nobody cares so long as you weren't sending money to North Korea-related or other watchlist addresses.

Considering their documentation[1] and how xpub[1] were handled when not using DOJO with Samourai Walelt can we assume that, in worst case scenario, the DOJ has access to every xpub and can trace the mixes that were done in the platform? I assume that is more private create a new wallet and then transfer the funds from Sparrow Wallet to it, instead of just importing them to another one...
[1]https://docs.samourai.io/en/dojo/using-dojo
[2]https://learnmeabitcoin.com/technical/keys/hd-wallets/extended-keys/#extended-public-key-normal

[BlackHatCoiner]

Can anyone see a silver lining?

I personally can't. Samourai wasn't a custodial mixer, so that to say this seizure encouraged the adoption of self-custodial solutions, or whatever. Samourai was one of the best and cheap solutions to coinjoin most effectively and self-custodially. Now the second best, IMO, is XMR swap, and I dare to add, XMR in general as it embodies the true spirit of cypherpunks, which Bitcoin failed to. The only problem is that Bitcoin appreciates more in capital than Monero.

You're lying, Wasabi's privacy software isn't broken. If you aren't lying, then prove it by tracing this Wasabi coinjoin:

This is not another Wasabi thread. I'm not attempting to de-anonymize Wasabi, all the evidence of people who used it and got caught speak for itself, but I know you'll blame the users that "they didn't use it correctly".

Governments are not known to be very savvy, and with this recent anti-money laundering craze going on over there, it wouldn't surprise me if they see Wasabi as facilitating those kind of transactions. After all, they're the only large coordinator left now that Samourai's gone.

I mean, totally possible. Wasabi funding chain analysis and getting seized would be a little ironic, though.

Considering their documentation[1] and how xpub[1] were handled when not using DOJO with Samourai Walelt can we assume that, in worst case scenario, the DOJ has access to every xpub and can trace the mixes that were done in the platform? I assume that is more private create a new wallet and then transfer the funds from Sparrow Wallet to it, instead of just importing them to another one...

Any user who shared their xpub should consider themselves traced already, and if I were them, I'd send everything to another wallet, not just migrate with the same seed phrase.

[EarnOnVictor]

Petter Todd gave a 50% chance Samurai Wallet was run by feds:
https://www.youtube.com/watch?v=oPNFdhZUGmk

I guess the chance is now 100%

RIP indeed, I hope the tech continues being used via open source anon development though

It has been confirmed 100% indeed and I believe more is to come because the US and EU government seems getting more serious these days. And for me, is there any crypto establishment that can be trusted? Sadly, people often talk about the seizure but do not condemn the offence.

Besides, what is happening in the crypto world reminds me of my warning many times even as people claimed the decentralised system can't be brought down by the government, blah blah blah. Is it not the government we are talking about? They can do what pleases them and just because they've not clamped down on something doesn't mean they do not have the power or will still not clamp down on it. They have all the information, the power and the resources to do so, we should just hope for less destabilization of our plans regarding crypto simply for the sake of trying to control everything.

[darkv0rt3x]

Bitcointalk people were already forseing this when they forbid conjoin campaigns in te forum...

Coinjoin services are allowed. Mixers are not.

yeah I meant that. But the line between one and the other, for the FEDs is probably very slim!

Edited
I mean, there aren't many differences between the two. Mostly one is non-custodial and the other would be custodial. But both would be seen as to "money laundering" by any law enforcement, for sure!

[Kruw]

I personally can't. Samourai wasn't a custodial mixer, so that to say this seizure encouraged the adoption of self-custodial solutions, or whatever. Samourai was one of the best and cheap solutions to coinjoin most effectively and self-custodially. Now the second best, IMO, is XMR swap, and I dare to add, XMR in general as it embodies the true spirit of cypherpunks, which Bitcoin failed to. The only problem is that Bitcoin appreciates more in capital than Monero.

Samourai's coinjoins were massively expensive and provided the worst privacy compared to any of their competitors. Common input ownership is revealed and toxic change is created in Whirlpool tx0 transactions, making them trivial to trace on the blockchain:

Post the tx ID of any Whirlpool transaction and I will show you the tx0 transaction that was created by each of the new entrants.

Ok, here's one: https://mempool.space/tx/ed3131b544fbf00a71709942e483b55e629312ecb181e6e819409f419ee0d226

Where exactly is the privacy loss for new entrants, splitting a single UTXO in to multiple UTXOs to join the pool?

Okay, here's all the payments that can be tracked from the two new participants of the Whirlpool coinjoin transaction:

Entrant 1: bc1q03c0443ausjjdxl2h6ud5m8c0dux0zyg3dqdj7 created 0.00170417 BTC in unmixed change sent to bc1q3fduld0l3r8nclyt5p3r7ak675tekurstn55tl.  Since this UTXO is not private, the sats were marked as unspendable and have not been recovered by the wallet owner  

Entrant 2: bc1qzc8zku26ej337huw5dlt390cy2r9kgnq7dhtys created 0.00191247 BTC in unmixed change sent to bc1qjlltxr443uy236wl4xhpxlr6dgsu0zltlv3m44. This UTXO was used in a second tx0 transaction, creating a huge trail of transactions that could be traced to each other  

The 2nd tx0 transaction created 0.00076348 BTC unmixed change which was sent to bc1qehd7gy8rza9mnzm9wnfjhgw82rp47wmqt7vpgy

Since this unmixed change is below the .001 pool minimum, it was consolidated in a 3rd tx0 with 3 other addresses owned by the same wallet:
31x8GPqrhzdaxiBJa9N5UisuoxbX1rAnHa
16Gw5WKjbxZmg1zhZQs19Sf61fbV2xGujx
3LZtsJfUjiV5EZkkG1fwGEpTe2QEa7CNeY

The 3rd tx0 transaction created .00200317 in unmixed change which was sent to bc1q2p7gdtyahct8rdjs2khwf0sffl64qe896ya2y5
This was spent in a 0.00190000 payment to 3B8cRYc3W5jHeS3pkepwDePUmePBoEwyp1 (a reused address)

That payment left .00008553 in change that was tracked to 3Dh7R7xoKMVfLCcAtVDyhJ66se82twyZSn and consolidated with two other inputs in a 4th tx0 transaction:
bc1qeuh6sds8exm54yscrupdk03jxphw8qwzdtxgde
3ByChGBFshzGUE5oip8YYVEZDaCP2bcBmZ

This 4th tx0 created .00533406 in unmixed change which was sent to bc1qzh699s75smwukg9jcanwnlkmkn38r79ataagd9 which was consolidated with 3 more addresses into a 5th tx0:
3F2qiWQJKQjF7XFjEo8FUYP3AU5AC6RqX8
3HAYYVKUpYbr2ARMdZJr9yVu8xi8UcxtPz
3GQtwwRK31wwCc22q6WS5sCgixUHsG5KaT

The 5th tx0 created 0.00058494 BTC in unmixed change that was sent to bc1qvh2zjcwwkj9y70xulla2semvlav3lty0p3l3w3
This was spent in a .00047290 payment to bc1qvzg8jq6wqtr5navn4e3ps4qrkk9r6n4h98gjck

That payment left .00008411 in change that was tracked to bc1qg6j0f0wfhpktt2l8uzdn48ct3um2xyur40eyzd and consolidated with another input into a 6th tx0 transaction:
31iZLXWfoywhuMZTPGxTkpzphzh2NXshpP

The 6th tx0 created .00753775 in unmixed change that was tracked to bc1qgfll2apc27yct6h2c8r8wq4kqhxjsfrudhhn5q
This was spent in a .00737000 payment to bc1q5emzer2t0sq5dez0zsrqgh6scvwn0n24xsladp (a reused address)

This payment left 0.00010896 BTC in change which has not been spent yet, but the payment only took place 11 days ago, so I assume it will eventually be spent, allowing the Whirlpool user to be tracked even further.

This is not another Wasabi thread. I'm not attempting to de-anonymize Wasabi,

If you can't deanonymize Wasabi, then STOP LYING by claiming "the privacy software is broken".

all the evidence of people who used it and got caught speak for itself, but I know you'll blame the users that "they didn't use it correctly".

That's a fake thread self moderated by a hit job account, you can find the UNMODERATED response here:

User "kayirigi" has posted a fake accusation of scamming against Wasabi Wallet:  https://bitcointalk.org/index.php?topic=5480440.0

This user, of course, "self moderated" the fake topic in order to prevent anyone from commenting honestly about these blatantly false accusations.

There have been 5 documented cases of coinjoins being flagged by exchanges and brokers. All have concerned Wasabi. Rather than fix recurring issues with their implementation, Wasabi claimed that the problem was due to an anti-coinjoin campaign by KYC actors despite the fact that only Wasabi coinjoins have ever been targeted https://6102bitcoin.com/coinjoin-flagging/ (Update: now 6 documented cases. See below.)

Do not let these obvious hit job accounts scare you out of using Bitcoin privately.  If someone you are transacting with "flags" your coinjoined funds, it is not due to "an issue with their implementation", it's because that person is requiring your data in order to transact with them.  Defy them, and become anonymous anyway.

You are wrongfully blaming Wasabi for exchanges rejecting private funds.

[Wind_FURY]

OK, I believe this proves that the Samourai developers are NOT working for state actors, and the project itself is NOT a honeypot collecting information for intelligence agencies. This is a very sad day for Bitcoin privacy advocates. Kruw, some of your fellow developers were arrested, move on for today. Debate again tomorrow.

[goldkingcoiner]

Centralized elements will always remain attack vectors. Unless it is 100% decentralized, it should be considered 100% centralized. Too bad, they had the right idea but went about it all wrong.

Good thing the wallet itself is decentralized at least. I bet the government would love to steal users funds under the pretext of enforcing some bs law.

There is a reason why Monero and Bitcoin founders are anonymous. Now we see why.

[The Sceptical Chymist]

They can shut it down so long as they believe the platform is being used by the criminals they hate the most, such as those North Korean hackers, to "launder" money through it.

There were weapons of mass destruction in Iraq prior to the US invading that country and taking down Saddam, right?  Right, guys??

Governments are the biggest liars, the biggest thieves (with banks in second place), and unfortunately since they make the laws and enforce them and instill fear in their citizens' hearts, they get to do whatever the fuck they want to. 

I've written letters to my state senators about crypto before.  What else can I or any of us who live in the US do?  The crypto crackdown is starting to look like it's being run by Joe McCarthy's resurrected corpse.

[Kruw]

OK, I believe this proves that the Samourai developers are NOT working for state actors, and the project itself is NOT a honeypot collecting information for intelligence agencies. This is a very sad day for Bitcoin privacy advocates. Kruw, some of your fellow developers were arrested, move on for today. Debate again tomorrow.

Why do you think it's too early to say "I told you so"? Samourai deliberately designed their wallet to collect user data by default and lied about it: https://twitter.com/SamouraiWallet/status/1576923638846005248

I opened an issue to have a warning displayed to users about the data they are leaking, Samourai closed it and later deleted it: https://web.archive.org/web/20230417145554/https://code.samourai.io/wallet/samourai-wallet-android/-/issues/458

I've spent an enormous amount of time warning people about the risks involved with this exact outcome. Now whatever data Samourai had is within arms reach of the Feds.

[JackpotRacer]

Well, it's a fact that this kind of news is never good for the community. And it is regrettable that we are reaching this type of situation that the authorities have been promoting.

But we also have to note that they were the ones who put themselves in the sights of the authorities:


They invited Russians who were being penalized by the authorities because of the war to use their services to evade the sanctions. Without a doubt, it was a matter of time before the authorities caught up.

Yes, the Russian move was a very bad idea and I am really surprised about it and I would like to know what was the reason for it.

[Kruw]

Yes, the Russian move was a very bad idea and I am really surprised about it and I would like to know what was the reason for it.

Geopolitics aside, they openly encouraged hackers to use their service: https://twitter.com/SamouraiWallet/status/1610484148057120768

[SlamDunkIT]

BlackHatCoiner, great choice to quote Satoshi, I love to see advice and wisdom from our founder. Also R.I.P. Samouri Wallet, something new and better will come along to replace you.

Samourai Wallet has been taken down by the U.S. authorities: https://www.justice.gov/usao-sdny/pr/founders-and-ceo-cryptocurrency-mixing-service-arrested-and-charged-money-laundering. You can verify by opening samouraiwallet.com (it's under the authorities' control).

Another privacy enhancing tool goes down the road. Apparently, the governments use everything in their disposal to undermine the users' privacy. Samourai team had recently announced that they were developing a decentralized version of whirlpool, using the Soroban network. It could be the case that they foresaw their own disappearance.

Very frustrated. An important reminder and good quote is needed here.

>You will not find a solution to political problems in cryptography.

Yes, but we can win a major battle in the arms race and gain a new territory of freedom for several years.

Governments are good at cutting off the heads of a centrally controlled networks like Napster, but pure P2P networks like Gnutella and Tor seem to be holding their own.

R.I.P. Samourai.

[joker_josue]

Yes, the Russian move was a very bad idea and I am really surprised about it and I would like to know what was the reason for it.

Pure marketing and with the aim of obtaining more customers and financial return.

Imagine if Satoshi in the Genesis block had said "currency created to avoid taxes". Do you think Bitcoin had reached this day without major complications? Logically not.

The problem is when people exaggerate how far they can go, and end up exposing themselves too much.

This is reminiscent of what happened with torrents and PirateBay. Why was this the most followed torrent site to date? Because it was what was most exposed and clearly shown to the public as a way to obtain paid content for free. Today, torrent sites continue to exist, but as they do not expose themselves to that level, they manage to go unnoticed. And with constant small adjustments, they manage to avoid the actions of the authorities. They are not free from being caught, but it ends up being different.

[bitmover]

Samourai Wallet has been taken down by the U.S. authorities: https://www.justice.gov/usao-sdny/pr/founders-and-ceo-cryptocurrency-mixing-service-arrested-and-charged-money-laundering. You can verify by opening samouraiwallet.com (it's under the authorities' control).

I think US government should also look closer at all that NFT money laundry industries.  Specially ordinals and Runes.

No one can convince me that this single satoshi is worth 2.1 million to anyone.  This is money laundry
https://decrypt.co/228084/bitcoin-epic-sat-halving-sells-over-2-1-million

The first satoshi mined on Bitcoin after the halving, one of just four "epic sats" to date, fetched 33.3 BTC at auction. Here's why.

[NotATether]

I think US government should also look closer at all that NFT money laundry industries.  Specially ordinals and Runes.

No one can convince me that this single satoshi is worth 2.1 million to anyone.  This is money laundry
https://decrypt.co/228084/bitcoin-epic-sat-halving-sells-over-2-1-million

The first satoshi mined on Bitcoin after the halving, one of just four "epic sats" to date, fetched 33.3 BTC at auction. Here's why.

They are going to clean out white-collar crime nationwide before they investigate Ordinals and NFTs. which is a fancy way of saying they won't do it.

Sorry but that's just the reality of how the FBI and SEC are ran.

[cryptosize]

These mofos ain't lying:

Welcome to 2030. I own nothing, have no privacy, and life has never been better

https://medium.com/world-economic-forum/welcome-to-2030-i-own-nothing-have-no-privacy-and-life-has-never-been-better-ee2eed62f710
https://twitter.com/wef/status/809424034169581568



Just look at her eyes... do you think she has a sane mind?

Techno-Communism (AI/robots + CBDC + UBI) will require abolition of privacy, that's why they're taking everything down.



https://twitter.com/sethforprivacy/status/1783270473121382845

Use Monero for spending, keep using Bitcoin for savings

[coolcoinz]

OK, I believe this proves that the Samourai developers are NOT working for state actors, and the project itself is NOT a honeypot collecting information for intelligence agencies. This is a very sad day for Bitcoin privacy advocates. Kruw, some of your fellow developers were arrested, move on for today. Debate again tomorrow.

As for the honeypot, we're yet to find out what information they get from there, how well the servers were protected and so on. I'm not an expert here, but I've read that they had their own nodes and most of their users did not use them.

As for the US government, It's a great example of double standards where a person can kill another person and get 10 years, while these guys are facing 20 (correct me if I'm wrong) for running a privacy oriented software! That's insane.
At the same time Jamie Dimon's bank was FINED for money laundering. Why aren't these devs let go with a fine? Because the government rules with fear and likes to make examples of people to scare the rest.

[FinneysTrueVision]

You're lying, Wasabi's privacy software isn't broken. If you aren't lying, then prove it by tracing this Wasabi coinjoin:

This is not another Wasabi thread. I'm not attempting to de-anonymize Wasabi, all the evidence of people who used it and got caught speak for itself, but I know you'll blame the users that "they didn't use it correctly".

Those accusations are disingenuous and have been debunked numerous times already. The PlusToken scammers weren’t caught because they used Wasabi, they got caught because they were operating a ponzi scheme. Moreover, it’s well known they didn’t use Wasabi but instead a modified client they coded to specifically allow reusing the same address. A larger portion of their BTC was self-mixed, poorly, via repetitive UTXO splitting and merging. Also, they were using centralized exchanges which had their KYC information.

The Twitter hackers also used centralized exchanges as well as custodial mixers which you promoted and endorsed, yet I don’t see ChipMixer being blamed for their arrest.

Any user who shared their xpub should consider themselves traced already

This was repeatedly downplayed by their developers and their fanatical reply guys on social media. Anybody who dared to call it a vulnerability was relentlessly trolled. They had no regard for the possibility of exposing users to this risk, just as long as they were still collecting their fees, that’s all that mattered.

[buwaytress]

Can anyone see a silver lining?

I personally can't. Samourai wasn't a custodial mixer, so that to say this seizure encouraged the adoption of self-custodial solutions, or whatever. Samourai was one of the best and cheap solutions to coinjoin most effectively and self-custodially. Now the second best, IMO, is XMR swap, and I dare to add, XMR in general as it embodies the true spirit of cypherpunks, which Bitcoin failed to. The only problem is that Bitcoin appreciates more in capital than Monero.

Always held Monero with respect, and now that you mentioned it, am wondering why no one's gone for their devs or taken down their gits or whatever. Suppose it helps they have never really gathered the capital or volume as you say.

One must hope "this is not the end" but to bring back the silver lining question I asked and to answer myself, perhaps this is one more reason for people to attempt a "return" to basics. Hurts me personally a little to see recent cypherpunk headlines talking about Pavel instead of some other Bitcoin or even Monero relation.