Wasabi Wallet White Paper INTRODUCTION Criminals and terrorists are constantly seeking novel techniques to remain undetected. The latest trend in evading law enforcement has led many criminals to turn to anonymous and easy-to-use cryptocurrencies, which allow them fast, international money transfers for diverse illicit purposes and barters. While the identities of transaction makers are pseudo-anonymous, transparency is inherent in the design of the blockchain - all transactions, including addresses, amounts and timestamps, are publicly available. The public nature of the blockchain has prompted advanced bad actors to develop methods to further enhance their anonymity. Traditional cryptocurrency analytics and tracing tools combine open-source intelligence with public blockchain data analytics to identify illicit transactions and follow them on the blockchain. However, in some cases, they may face challenges while attempting to associate blockchain transactions with the identities of their makers. These solutions provide indirect de-anonymization using the "follow the money" methodology: once a suspicious transaction is identified on the blockchain, law enforcement agencies must collaborate with crypto exchanges or Virtual Assets Service Providers (VASPs), which are subject to Know Your Customer (KYC) regulations, to identify the person behind the suspicious transaction. This methodology is not applicable in many cases, including those cases in which suspects use mixing services as a means of increasing their anonymity. Mixers are virtual services that ‘mix’ one user’s cryptocurrency with another’s in such a way that makes it difficult to link inputs with their respective outputs and thus hinders the ability to trace transactions on the blockchain. Privacy enhanced wallets are services that embed privacy or security features, such as built-in mixing services and/or anonymous network access, in a digital wallet. Operating since 2018, the Wasabi Wallet is a popular crypto wallet famed for its privacy features. These features are attractive to criminals seeking to evade being tracked and have thus posed challenges for law enforcement agencies. Criminals regularly use the Wasabi Wallet to launder Bitcoin due to advanced security measures, including: CoinJoin built-in, distributed, easy to use mixing protocol. For a small fee, coins can be mixed with coins of other Wasabi users, making them fungible and untraceable. Security is ensured, as coins are never under the control of the operator of the service.>>> TOR client a software that renders its communications traffic anonymous and seemingly impossible to analyze. In this instance, the software does not classify Wasabi Wallet traffic as such. This paper details how Wasabi works and what is needed to overcome the challenges it poses. 2