In light of the recent efforts to eliminate blockchain privacy tools such as privacy-focused wallets and crypto mixers, Shifty is at a critical juncture. The heightened regulatory scrutiny, particularly from regions with strict regulations like the United States (US) and the European Union (EU), has presented significant challenges for crypto mixers. Consequently, we must make a difficult request to our esteemed users in these regions: we kindly ask you to refrain from using our CoinJoin service.
Regulatory Challenges Facing Privacy Tools
The current regulatory environment has become increasingly hostile toward blockchain privacy-enhancing technologies. Regulators in the US and EU have intensified their examination of crypto mixers, also known as cryptocurrency mixers, creating legal risks and compliance burdens that conflict with our privacy-centric mission.
The core principle behind our coin-mixing service is to enhance the privacy and anonymity of cryptocurrency transactions for everyday users. The CoinJoin protocol represents not only a technical innovation but also a philosophical commitment to financial privacy and freedom—fundamental human rights we deeply respect.
Crypto Mixers and Recent Regulatory Actions
The mounting regulatory pressure has compelled many privacy-focused services to reassess their operations in these heavily regulated regions. Notable examples include the Wasabi Wallet and the Trezor hardware wallet, both of which have disabled or limited CoinJoin operations in the US and EU. These decisions highlight the growing challenge of balancing user privacy with regulatory compliance.
Another concerning development is the U.S. government's Notice of Proposed Rulemaking (NPRM) proposed last year. This rule would impose new recordkeeping and reporting requirements on U.S. financial institutions and agencies. Specifically, it targets transactions where there is knowledge, suspicion, or reasonable grounds to suspect the use of Bitcoin mixers and Convertible Virtual Currency (CVC) mixing. This means U.S. financial institutions would be required to report all transactions they believe involve the use of crypto mixers, adding another layer of oversight and regulatory burden.
By imposing these stringent compliance requirements, regulators are effectively forcing services like ours to choose between compromising our principles, withdrawing from the US and EU markets, or ceasing operations on the open web and moving to less accessible platforms.
Why Crypto Mixers Cannot Adopt KYC
At the heart of our CoinJoin service lies an unwavering commitment to user privacy. We firmly believe in the fundamental right to financial confidentiality and have designed our crypto mixer, Shifty, to enable users to conduct transactions without revealing their identities. Shifty is the crypto mixer for everyday users, and this commitment means we do not collect or verify personal information, making it impossible for us to comply with the latest Know Your Customer (KYC) requirements imposed by US and EU regulators.
The regulatory overreach embodied in measures like the NPRM and enhanced KYC mandates stands in stark contrast to our privacy policies. Complying with these regulations would require us to fundamentally alter our service model and compromise the financial privacy our users value most. We are thus faced with a difficult decision: either comply and abandon our privacy-first principles or maintain our commitment to privacy and exclude users from over-regulated regions.
Operating in the US or EU without adhering to these regulations carries serious legal risks. Financial penalties, legal action, and even criminal charges can be imposed on services that fail to comply with these strict requirements. Recent actions against Samourai Wallet and other privacy-focused services like Tornado Cash, Bitcoin Fog, Helix, and Blender.io serve as stark reminders of the potential consequences.
Our Request to US and EU Users
Given the current regulatory landscape, we are unable to comply with the strict KYC requirements mandated by US and EU authorities. We uphold the principle of "no KYC crypto," and implementing such measures would not only jeopardize our users' privacy but also violate the core values upon which our service is built.
As a result, we regretfully request that all US and EU citizens refrain from using our CoinJoin service. This request is not made lightly, and we deeply regret any inconvenience it may cause. However, we believe it is the only way to protect the privacy and integrity of our coin-mixing service.
To our users in the US and EU, we sincerely appreciate your understanding and support. We hope that the regulatory environment will evolve to respect fundamental rights to privacy and financial autonomy. Until then, we ask that you please refrain from using our CoinJoin service to safeguard both your privacy and our ability to continue providing this essential service to users in less restrictive jurisdictions. We remain dedicated to our mission and will continue to advocate for privacy and freedom in the digital age, where privacy is more valuable than ever. Your support during these challenging times means a great deal to us.
Conclusion
As regulators in regions like the US and EU continue to impose stringent regulations, privacy-focused services like ours face existential threats. The demands for compliance with KYC and other invasive regulations stand in direct opposition to our commitment to user privacy. We believe in the importance of financial confidentiality and the right of individuals to conduct transactions without undue scrutiny. However, the current regulatory environment makes it exceedingly difficult for us to operate in these regions without compromising our principles. This has led us to the tough decision to ask all users from these areas not to use our coin-mixing service.
We remain steadfast in promoting the importance of financial privacy and are exploring ways to provide our services in a manner consistent with both our principles and legal requirements. We are optimistic that a future exists where financial privacy is respected and protected, and we are committed to working towards that goal.
