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What to do if you’ve used Samourai Wallet

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What to do if you’ve used Samourai Wallet

  protos.com 2 h

What to do if you’ve used Samourai Wallet

So, you’ve used the bitcoin mixing service Samourai Wallet. Its founders have been arrested, its domain is seized, and five different law enforcement agencies have issued joint press releases about the alleged crimes it perpetrated. What should you do?

To begin, you should probably do what you should have done in the first place — follow the law. While it’s almost always legal to transact online, store data on Bitcoin’s blockchain, and use node and wallet software, it is illegal to use Bitcoin to do certain other things.

What to do if you’ve used Samourai Wallet

Law enforcement agencies seize Samourai Wallet’s website.

For example, it is a crime to evade taxes; to intentionally launder the proceeds of others’ crimes; or to conspire with or assist others in breaking the law.

It’s also a crime to avoid cash-like reporting requirements — and there are many cash reporting requirements. For example, most US business owners who pay any worker more than $600 (soon rising to $5,000) per year need to file a Form 1099. Most cash-like transactions exceeding $10,000 are also subject to Form 8300 reporting requirements.

While a full discussion of the legality of Samourai or other coin mixers is beyond the scope of this article, ensuring that you follow the law should remain your top priority.

How to stay private without Samourai Wallet

Next, and assuming you have always followed the law, there are some practical steps you can take to disentangle yourself from the shuttered coin mixer. Although it’s generally legal to use privacy tools for non-criminal purposes, Samourai Wallet is seized and no longer operates.

Moreover, many coin mixers have suspended coin mixing services, including Sparrow Wallet’s integration with coin mixer Whirlpool. Sparrow terminated that privacy service a couple of hours ago.

Therefore, if you want to keep your bitcoin private, you must use the rapidly dwindling services that remain.

Bull Bitcoin founder and privacy advocate Francis Pouliot wrote a quick how-to guide. He recommends a series of actions that could remove a leak of your Bitcoin wallet’s xpub (the master index of all public keys belonging to one private key). Spoiler alert: It’s hard work.

First, a user following Pouliot’s suggestion would need to create several wallets using Wasabi, a European coin mixing service that competed with Samourai. Next, the user should send each UTXO of their bitcoin balance to unique Wasabi wallets. Finally, they should initiate CoinJoin or Join Market transactions to anonymize bitcoins from those wallets.

If a user carefully follows these steps, Pouliot argues, they should be able to privately disentangle their Bitcoin wallet from Samourai’s shuttered service.

Good luck!

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