Swan Bitcoin will close accounts of customers utilizing cryptocurrency mixing services.
Swan co-founder Yan Pritzker expressed that while the company is supportive of privacy, it must adhere to FinCEN regulations, and therefore does not object to customers using such services.
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Swan Bitcoin, a Bitcoin services platform, has issued a warning to its users, stating that it will be compelled to close accounts engaged with crypto-mixing due to regulatory obligations imposed by its partner banks. Customers received notification of this policy change in a letter, attributing the adjustments to the proposed rule by the United States Financial Crimes Enforcement Network (FinCEN), which outlines new responsibilities for firms handling transactions from mixing services.
On November 12, Yan Pritzker, the co-founder of Swan Bitcoin, clarified on social media that while the company supports the use of privacy-focused mixing tools and services, it is obligated to adhere to the requirements of its partner banks. Pritzker criticized the proposed FinCEN rule, describing it as poorly written and encompassing a broad range of Bitcoin-related activities, including the use of BTC addresses only once, fund mixing, and the prohibition of programmable transactions like those on the Lightning Network.
Pritzker emphasized that mixing services are unfairly stigmatized, despite being a common method to enhance privacy by breaking down large Bitcoin amounts into smaller ones. He underscored Swan Bitcoin's belief that privacy is not a crime and that using unmixed Bitcoin is akin to bringing an entire paycheck to a grocery store to buy an apple.
Given the regulatory scrutiny on crypto-mixing services in the U.S., Pritzker acknowledged the prevailing fear in the banking sector. He explained that to continue offering Bitcoin on-ramp services, Swan Bitcoin's custody partner must engage with banking services governed by FinCEN regulations. The platform's letter to customers also suggested advocating for policy opposition and emphasized the importance of educating the public about Bitcoin as a crucial first step.
