Wasabi Wallet faces scrutiny by Europol over dark web transactions

Wasabi Wallet, a Bitcoin mixing wallet that increases transaction anonymity is now facing scrutiny from Europol for supporting dark web transactions.

Wasabi Wallet is a Bitcoin mixing tool that shuffles coins to increase the privacy of the Bitcoin transaction. Europol, a law enforcement agency of the European Union, internally presented a two-part report analyzing the wallet’s utility in illegal activity.

Wasabi Wallet under European scrutiny

The first part of the report by Europol referenced data from blockchain analysis firm Chainalysis saying that 30 percent of these deposits into Wasabi came through dark web sources. The report stated that around 15 million dollars were deposited into Wasabi through dark web markets.

The report noted that this was a significant number considering that dark web transactions account for only one percent of all transactions.

Europol is a European regulator that acts more like a data processing agency rather than a law enforcement agency. The agency’s primary function is to collect and analyze data to enhance the cooperation of national authorities.

Wasabi Wallet makes it hard to demix transactions

The report noted that the mixing service makes it very difficult to trace bitcoin transactions. Furthermore, the service makes it hard to “demix” transactions i.e. unravel the mixed transactions to trace its origin.

The service hosts a large number of transactions with “uniform output amounts” that obscure the destination of the funds. The report noted that the hope lies in the suspect making a mistake if he groups the mixed coins.

This is not the first reported case of Bitcoin mixing services being used in criminal activities. In February, an Ohio man was arrested for using a Bitcoin mixing service to launder money.

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