Bitcoin (BTC) users that utilized CoinJoin solution to achieve enhanced anonymity for their transactions, have suffered from consequences for the actions, as Binance has blocked all of their withdrawing process. 

Specifically, on December 19th, a Twitter account called Catxolotl has revealed what seems to be a correspondence, generated from a member of Binance Singapore, claiming that an investigation has been initiated to look closely into a withdrawal of an unspecified sum of Bitcoin. 

Binance stated that the employment of CoinJoin in Catxolotl’s transaction, through wallet provider Wasabi, has led to the appearance of the correspondence. 

“Binance SG operates under the requirements as set forth by MAS and our MAS regulated partner, Xfers. Hence there are AML CFT controls set in place for the Binance SG. Unfortunately, this user has triggered one of our risk control mechanisms and thus we are conducting a deeper investigation.” A Binance staff has provided confirmation to the matter. 

CoinJoin is a tool that helps grouping together Bitcoin transactions, “mixing” unspent transaction outputs (UTXOs) while at the same time provide anonymity to the information of the sender, the destination and what was transferred. 

Per Binance CEO Changpeng “CZ” Zhao, Singapore regulatory boundaries have put an end to CoinJoin-related transactions. 

“Some advocate using CoinJoin as a ‘best practice’ but they do not necessarily inform you on the risks. FYI, a risk of using CoinJoin is @chainalysis or others will increase your ‘risk score’. @binance & others use these vendors & share data.” The Bitcoin enthusiast Giacomo Zucco spoke out against initiatives to prevent transactions with extra privacy.