Swan Bitcoin to Close Crypto-Mixing Accounts Due to Banking Regulations
Summary:
Swan Bitcoin, a crypto service platform, has issued a warning to its users about the mandatory closure of accounts engaged in crypto-mixing due to regulations set by partner banks. The move comes in response to an incoming rule proposed by the Financial Crimes Enforcement Network (FinCEN), which places stricter obligations on companies processing mixed crypto transactions. Despite no personal objections to such services, Swan Bitcoin's co-founder, Yan Pritzker, stated that the company must comply with these regulatory demands to continue its operation. He encouraged educating the public about Bitcoin to challenge such policies.
Swan Bitcoin, a cryptocurrency service merchant, has cautioned its user-base about the potential closure of accounts engaging with cryptocurrency-mixing in line with regulation requirements set by partner financial institutions. The communication detailing these changes cited the incoming alterations enforced by the Financial Crimes Enforcement Network (FinCEN) mandating specific obligations on companies processing mixed transactions. Swan Bitcoin's co-founder, Yan Pritzker, addressed users via X (previously known as Twitter) on the 12th of November, clarifying that despite no personal objection to privacy orientated mixing tools, they must comply with the stringent rules imposed by their partnered banks. Pritzker stated that the impending FinCEN regulation lacked clarity and has broad implications on a vast scope of Bitcoin operations such as single-use BTC addresses, the mixing of funds, and the prohibition of all transacted programming (Lightning Channels). Pritzker further commented that mixing services are wrongly associated with illegal operations, whereas their true purpose is to enable private, small-scale Bitcoin fractioning. The US financial regulators have a known reputation for denouncing cryptocurrency-mixing services as potential facilitators for illicit activities and have sought to regulate these services accordingly. The consequences of such activities have been severe, leading to prosecutions and imprisonments, including the creators of Tornado Cash. In defense of mixing services, Pritzker said, “We view mixing as standard, privacy is not a crime, and using non-mixed Bitcoin is much like using your full salary in a grocery store to buy an apple." He further addressed the current political climate's impact on the banking industry, resulting in several banks being wary of engaging with cryptocurrency operations. Thus, their Bitcoin on-ramp services can only continue if their custodian partner complies with FinCEN governed banking services. Swan Bitcoin enclosed advice on challenging such policies in their customer correspondence, emphasizing teaching the general public about Bitcoin as the most logical starting point. The subject of teaching children about Bitcoin was also addressed in a magazine asking, 'Should we ‘orange pill’ children? The case for Bitcoin kids' books'.
Published At
11/14/2023 10:45:53 AM
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