Key Takeaways
- Swan Bitcoin will terminate accounts interacting with crypto-mixing services due to regulatory obligations.
- The policy change aligns with proposed FinCEN rules, impacting a broad spectrum of Bitcoin-related activities.
- Swan Bitcoin emphasizes the need for public education on Bitcoin to challenge and potentially modify these regulatory policies.
Swan Bitcoin, a Bitcoin (BTC) service platform, has warned its customers about the termination of accounts involved with crypto-mixing services.
The enforcement actions directly respond to the regulatory requirements imposed by the partner banks and align with the new responsibilities outlined by the United States Financial Crimes Enforcement Network (FinCEN).
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In a letter to customers, Swan Bitcoin detailed the changes and attributed them to the proposed FinCEN rule, which seeks to regulate transactions involving mixing services.
On November 12th, Yan Pritzker, co-founder of Swan Bitcoin, addressed the issue on X (formerly Twitter). Pritzker emphasized the company's neutral stance on privacy-mixing tools and services but highlighted the necessity of complying with the regulations of their banking partners.
Pritzker critiqued the proposed FinCEN rule for its broad scope, which covers a wide range of Bitcoin-related activities. He pointed out that the rule includes one-time BTC address usage, fund mixing, and restrictions on programmable transactions, such as those on the Lightning Network.
Pritzker expressed his concern regarding the negative portrayal of mixing services by financial regulators, who often associate these services with illicit activities. He argued that mixing services, which are commonly used for breaking large Bitcoin amounts into smaller units with privacy in mind, are unfairly stigmatized.
The stance of US regulators towards crypto-mixing services has been stringent, with sanctions and legal actions taken against creators of services like Tornado Cash. Pritzker added:
We believe that mixing is normal, privacy is not a crime, and that using unmixed Bitcoin is similar to bringing your whole paycheck to the grocery store to pay for an apple.
Swan Bitcoin not only informed customers of the policy changes but also suggested ways to oppose such policies. The company believes that educating the public about Bitcoin is a crucial step in this direction.
