Can what happened to Samourai Wallet happen to Electrum ?

[BlackHatCoiner]

What happened in Samourai is that a non-custodial wallet was charged for "allowing" money laundering. That is so broad that anything can be considered likewise. We hadn't experienced such a case before, it was mostly mixers which were getting shut down, and lawfully, as they were transmitting money. Now this is a game changer. Joinmarket, Electrum, Bitcoin Core, DEXes, C++ libraries, Internet providers, this forum-- anything can be considered a money transmitter after Samourai.

And for those who think Samourai was shut down: It's just one coordinator. Another one might pop up. Whirlpool isn't over, and probably that's why they had announced decentralized Whirlpool recently.

[Z-tight]

What happened in Samourai is that a non-custodial wallet was charged for "allowing" money laundering. That is so broad that anything can be considered likewise. We hadn't experienced such a case before, it was mostly mixers which were getting shut down, and lawfully, as they were transmitting money. Now this is a game changer. Joinmarket, Electrum, Bitcoin Core, DEXes, C++ libraries, Internet providers, this forum-- anything can be considered a money transmitter after Samourai. 

I don't believe things will go that far, and the reason they were shut down is that they enhance privacy for BTC users, and we all know the government is targeting any service that enhances privacy, by charging them for allowing money launderers conceal their tx's. So Electrum and some of the services you mentioned do not fall under this category, because they do not enhance privacy or make it hard to track BTC tx's.

[BlackHatCoiner]

I don't believe things will go that far, and the reason they were shut down is that they enhance privacy for BTC users, and we all know the government is targeting any service that enhances privacy, by charging them for allowing money launderers conceal their tx's. So Electrum and some of the services you mentioned do not fall under this category, because they do not enhance privacy or make it hard to track BTC tx's.

Electrum comes with coin control, lightning network, Tor, plugin support, custom Electrum server support-- all of which allow privacy enhancement. If you pass a legislation that treats Samourai Wallet as illicit based on the criterion that it enhances privacy, then you open the Pandora's box to ban everything that can help you enhance you privacy. Everything, even your Internet connection; it's that vague.

[Synchronice]

Anti-privacy dictatorships such as USA can always arrest anybody including developers like they did the Samourai devs and they can easily shut down any website or take down the open source code on Github.

To be honest, absolutely every country is anti-privacy. I don't care what they write on papers because that's different, not everything is as fulfilled as it has to be. So, absolutely every country is anti-privacy!

What they can't do is shut down Electrum because it is not centralized the way Samourai was. Electrum relies on "indexed full nodes" known as Electrum servers that are run by individuals that are independent and can continue running these nodes as long as they want since they are from various jurisdictions.

By the way, why would anyone want to shut down Electrum? I mean, it's a simple wallet, doesn't offer coinjoin or mixing, so, there is nothing to deal with it. But if they decide to seize their domain and ban Electrum, then many people will shut down electrum servers, especially those who live in countries where US has extradition treaties. So, in that case, we will be dependent on people from Russia, Iran, Belarus and so on.

Electrum comes with coin control, lightning network, Tor, plugin support, custom Electrum server support-- all of which allow privacy enhancement. If you pass a legislation that treats Samourai Wallet as illicit based on the criterion that it enhances privacy, then you open the Pandora's box to ban everything that can help you enhance you privacy. Everything, even your Internet connection; it's that vague.

Then they have to shut down Tor project and probably Mozilla's headquarter (why not? ).

[pooya87]

To be honest, absolutely every country is anti-privacy. I don't care what they write on papers because that's different, not everything is as fulfilled as it has to be. So, absolutely every country is anti-privacy!

That's a good point. I'd say there is a degree for their anti-privacy policies. For example I don't know of any country that spends billions of dollars mining citizens data every second of every day (ie. what NSA does).

By the way, why would anyone want to shut down Electrum? I mean, it's a simple wallet, doesn't offer coinjoin or mixing, so, there is nothing to deal with it. But if they decide to seize their domain and ban Electrum, then many people will shut down electrum servers, especially those who live in countries where US has extradition treaties. So, in that case, we will be dependent on people from Russia, Iran, Belarus and so on.

@BlackHatCoiner already answered this above your comment.

I'd like to add that it's a slippery slope, when they start cracking down on Bitcoin related services there is no reason to believe anything or anyone is safe.
Why did the Chinese dictators shut down bitcoin mining? Mining wasn't breaking any laws. But that was the same slippery slope that started from authorities shutting down the CEXes that were obviously laundering money in broad daylight.

As for Electrum nodes, I wouldn't worry about it. They are already widespread across the globe to not have to shut down if authorities in one jurisdiction "went crazy".
You can take a look at default servers here and find more of them in your Electrum client or by going through the peer discovery protocol of Electrum itself manually
https://github.com/spesmilo/electrum/blob/master/electrum/servers.json

[AprilioMP]

I don't believe things will go that far, and the reason they were shut down is that they enhance privacy for BTC users, and we all know the government is targeting any service that enhances privacy, by charging them for allowing money launderers conceal their tx's. So Electrum and some of the services you mentioned do not fall under this category, because they do not enhance privacy or make it hard to track BTC tx's.

If everything was full privacy, the government wouldn't be able to find out what they want from us. I'm not here to say that they are anti-privacy, lest I be wrong.
Samourai wallet has features that can strengthen user privacy. Because it uses Coinjoin in its mixing services, this is a strong reason for the authorities to confiscate it.

When the government targets all services that can increase privacy for money laundering reasons, then I think they don't want everything to be completely private and that's where I think they are anti-privacy. Too political an act.
I don't see that Electrum can be their target with all that Electrum has.

[Synchronice]

@BlackHatCoiner already answered this above your comment.

I'd like to add that it's a slippery slope, when they start cracking down on Bitcoin related services there is no reason to believe anything or anyone is safe.
Why did the Chinese dictators shut down bitcoin mining? Mining wasn't breaking any laws. But that was the same slippery slope that started from authorities shutting down the CEXes that were obviously laundering money in broad daylight.

As for Electrum nodes, I wouldn't worry about it. They are already widespread across the globe to not have to shut down if authorities in one jurisdiction "went crazy".
You can take a look at default servers here and find more of them in your Electrum client or by going through the peer discovery protocol of Electrum itself manually
https://github.com/spesmilo/electrum/blob/master/electrum/servers.json

I read BlackHatCoiner's post for sure. No one knows what will happen in the future, who would expect if it become forbidden to go outside without mask? Right now, I can confidently say that Electrum is in no danger and no one will seize Electrum's domain, nor ban the wallet.

- Coin control - this is just a natural thing for Bitcoin, they can't ban Electrum for this feature, this is a native feature.
- Lighting Network - This is not prohibited and we don't see articles about Lazarus laundering money via Lighting Network channel, something like that. It is also never mentioned that Lighting Network helps in doing something illegal, so no worries right now.
- Tor support - They can't ban electrum for that, they have to ban Tor at first before they ban Electrum. Connecting to Tor is also perfectly legal, so no worries.
- What they want to ban is financial privacy, they want to ban the possibility of untraceable transactions, services that offer you such feature.
- There are many reasons to ban Bitcoin mining, for example unnecessary electricity waste.

There are many reasons to ban Bitcoin mining, for example unnecessary electricity waste. If your government thinks that Bitcoin is a money and electricity shouldn't be wasted on it, then they can ban it.

[BlackHatCoiner]

- Coin control - this is just a natural thing for Bitcoin, they can't ban Electrum for this feature, this is a native feature.

Coinjoining is also a natural thing for Bitcoin.

It is also never mentioned that Lighting Network helps in doing something illegal, so no worries right now.

It definitely helps engaging in illegal activities, because it is untraceable, just like whirlpool was. BTW, from all whirlpool's coins, it is said that only 5% are used in criminal proceeds.

Connecting to Tor is also perfectly legal, so no worries.

Coinjoining using whirlpool's coordinator was also perfectly legal, until recently.

[Synchronice]

- Coin control - this is just a natural thing for Bitcoin, they can't ban Electrum for this feature, this is a native feature.

Coinjoining is also a natural thing for Bitcoin.

Coinjoin is a manual attempt to combine multiple payments into a single transaction to make tracing more difficult. In other words, this is an attempt to make tracking of your transaction difficult and helps you to gain financial privacy. So, it makes it difficult to understand how you have money, how you got it. This is the red flag for governments and financial institutes. In other words, they want to know how you get your money. You would probably say that it's not their job and I agree with you but it is what it is.

Lighting network might be banned and unsupported soon as there is as scepticism about it from developers. Electrum doesn't offer you coinjoin service (but they might be forced to remove lighting network because electrum gives you the possibility to choose an UTXO, open a Lighting channel and do a submarine swap.
I still think that Electrum won't be banned, it doesn't offer you services that will improve your privacy.

BTW, from all whirlpool's coins, it is said that only 5% are used in criminal proceeds.

That excuse works very well on dumb people and you know what I told about the number of dumb people recently . Probably more than 50% of world money is used by criminals but no one talks about that. Governments are a group of criminals who are in charge of countries, the rule is like, government is the only legal group of criminals and because of this legality, they are entitled as anti-criminals. So, people believe whatever they say. No one should be blocking any service where 5% of users are criminals but they do anyway because people agree with them and there is no massive protest.

[BlackHatCoiner]

Coinjoin is a manual attempt to combine multiple payments into a single transaction to make tracing more difficult.

And coin control enables manual control of which UTXO to spend when making a transaction, avoiding consolidating toxic change, making your tracing more difficult. 

Electrum doesn't offer you coinjoin service

Electrum doesn't directly offer you coinjoin service, but it allows you to install plugins, one of which allows you to join coins with other people. This means that it indirectly supports coinjoin.

I still think that Electrum won't be banned, it doesn't offer you services that will improve your privacy.

It isn't advertised as privacy enhancing, but it does enhance your privacy if you know how to use it. Judging by the stance of the authorities right now in privacy, it will not surprise me if they start threatening Electrum developers.

No one should be blocking any service where 5% of users are criminals but they do anyway because people agree with them and there is no massive protest.

Forget about the 5%. Privacy, just as every other human right, should not be invaded for "the sake of the children".

[Synchronice]

It isn't advertised as privacy enhancing, but it does enhance your privacy if you know how to use it. Judging by the stance of the authorities right now in privacy, it will not surprise me if they start threatening Electrum developers.

I think that's why Electrum is safe, it doesn't advertise itself as privacy enhancer. Just imagine, a shop that sells knives for bread and a shot that sells knives to kill people. Which one will be closed and which one will be left open? Of course first one will remain open and the second one will be closed by authorities while it's equally possible to kill a human via knife bought in both places.
Yes, Electrum offers coin control but it's absolutely manual, you can use it save on transaction fees too, so this feature is not automatically labeled as privacy enhancer but definitely yes, it can.

I don't know if it's hard to think like me in this case but for all the reasons I stated above, I think that Electrum is safe and we shouldn't worry about it but I can't say the same about Sparrow if they don't remove some of their features.

[BlackHatCoiner]

I think that's why Electrum is safe, it doesn't advertise itself as privacy enhancer.

I agree it is safer than Samourai. But, safe in general? Depends on how people use it. If effective coinjoin plugins were developed, and everyone who coinjoined in whirlpool migrated to Electrum, then I expect authorities to address them.

Just imagine, a shop that sells knives for bread and a shot that sells knives to kill people.

Well, you can't cut a loaf of bread with whirlpool or with coinjoin plugins, so this analogy does not apply. Certain software is simply written to enhance your privacy, there is no other utility.

I think that Electrum is safe and we shouldn't worry about it but I can't say the same about Sparrow if they don't remove some of their features.

Whirlpool has been removed in v1.9.0: https://github.com/sparrowwallet/sparrow/releases.

[Synchronice]

I think that's why Electrum is safe, it doesn't advertise itself as privacy enhancer.

I agree it is safer than Samourai. But, safe in general? Depends on how people use it. If effective coinjoin plugins were developed, and everyone who coinjoined in whirlpool migrated to Electrum, then I expect authorities to address them.

Just imagine, a shop that sells knives for bread and a shot that sells knives to kill people.

Well, you can't cut a loaf of bread with whirlpool or with coinjoin plugins, so this analogy does not apply. Certain software is simply written to enhance your privacy, there is no other utility.

I think that Electrum is safe and we shouldn't worry about it but I can't say the same about Sparrow if they don't remove some of their features.

Whirlpool has been removed in v1.9.0: https://github.com/sparrowwallet/sparrow/releases.

If Electrum is dangerous, then so is Bitcoin Core and the whole Bitcoin with its blockchain. Then they have to simply ban Bitcoin but that's not going to happen because as you see they changed their strategy and instead of fighting it, they became a part of it and recently we even got Bitcoin ETF approval. This means that they aren't going to ban Bitcoin, they accept it's nature and that's all. It's also getting easier to tract transaction these days compared to old days and I think their main plan will be to censor miners, i.e. they'll be forced to ban certain transactions. If governments have this level of control, then even Samourai and mixers will not be a threat for them.
So, to sum up, Bitcoin is getting adopted, it's welcomed and ETF approval proves that. Electrum and similar wallets can't be banned or else they'll have to ban Bitcoin which they definitely aren't going to ban.

[BlackHatCoiner]

If Electrum is dangerous, then so is Bitcoin Core and the whole Bitcoin with its blockchain.

Correct, if. Alone, these pieces of software are unlikely to provide sufficient levels of privacy, but if they do, then expect their developers to be in danger. For example, if a softfork was proposed to implement ring signatures and confidential transactions, which would obscure the amounts transacted and the sender in each transaction, then I'd expect the authorities to address them before tomorrow morning. Same goes for Electrum if they updated their client to support decentralized coinjoin, as another example.

So, to sum up, Bitcoin is getting adopted, it's welcomed and ETF approval proves that.

Bitcoin is getting adopted, price increases, let's buy lambos! etc., but we're missing the point. One of the core principles of cryptocurrency, being privacy, is taken away aggressively. We may have won the fight, but we have lost the war, in Bitcoin. That's my view. 

[NotATether]

So, to sum up, Bitcoin is getting adopted, it's welcomed and ETF approval proves that.

Bitcoin is getting adopted, price increases, let's buy lambos! etc., but we're missing the point. One of the core principles of cryptocurrency, being privacy, is taken away aggressively. We may have won the fight, but we have lost the war, in Bitcoin. That's my view.  

Not lost, losing.

It's not over until they completely ban privacy of everything.

[BlackHatCoiner]

It's not over until they completely ban privacy of everything.

Privacy of Bitcoin is what I was talking about. Not everything. If developers are afraid of writing code that enhances Bitcoin privacy, then we've lost the war.

[Z-tight]

Privacy of Bitcoin is what I was talking about. Not everything. If developers are afraid of writing code that enhances Bitcoin privacy, then we've lost the war.

Sad, but i think you are right. The government is our common enemy, and they have to power to ban, seize and imprison, developers are not going to risk jail time to preserve privacy on the BTC network. They make it look like it is a fight against money laundering, but this is an attack on BTC, against its fungibility and privacy on the network, it's going to be impossible to use BTC privately in sometime to come.

[logfiles]

Anti-privacy dictatorships such as USA can always arrest anybody including developers like they did the Samourai devs and they can easily shut down any website or take down the open source code on Github.

This is what I was thinking could be the next phase by Anti Privacy US Government. They are going to heap pressure on platforms like GitHub not to allow development of such apps on their platforms, just like the bans of Google play and App Store.

This will massively affect the collaboration and development of the projects we love here.

Do we have any good alternatives to GitHub? A platform that is more like a "decentralized GitHub" that the US Government can not just threaten?

[bitmover]

Do you think this can happen to other software wallets ? Especially Electrum ?

Government can not take down Electrum because Electrum is only a wallet and not centralized in any way than its users using central server to connect to the blockchain.

In short, Electrum is not aiming for money in a centralized way that can make government to take it down. It is not even a mixer. Not having anything that can make it to be the government target.

Additionally,  electrum is open source.

Anyone can take the code and run, and keep the development
Samourai was basically a software and a service , electrum is just an open software

[BlackHatCoiner]

They make it look like it is a fight against money laundering, but this is an attack on BTC, against its fungibility and privacy on the network, it's going to be impossible to use BTC privately in sometime to come.

Fortunately, it will always be possible to decentrally exchange BTC for XMR, so you can always opt-out to fully anonymous. But, if you want to stay anonymous without exchanging bitcoin for an altcoin, that's difficult. Your best course would be Joinmarket, which is far from ideal.

Do we have any good alternatives to GitHub? A platform that is more like a "decentralized GitHub" that the US Government can not just threaten?

It's called git.