Bitcoin: France Further Ridicules Itself

Once is not custom, France is once again showing its sheer mistrust towards bitcoin.

The Senate bans “mixers”

The Senate has just adopted an amendment banning the use of “crypto-asset mixers”. They are also referred to as “coinjoins” in the jargon.

Mixers help to enhance the pseudonymity of bitcoins. They are very useful for protecting one’s privacy, which annoys the senators:

“The present amendment aims to ban the use of crypto-asset mixers that seek to obscure and render untraceable the origin of crypto-assets circulating on the blockchain. Given their characteristics, these mixers are indeed increasingly used in money laundering circuits, particularly concerning revenues from drug trafficking.”

🇫🇷 France moves to ban Bitcoin mixers.

A new amendment expands money laundering rules to include crypto transactions using mixers, citing their role in concealing fund origins.

Lawmakers argue this aligns with EU regulations set to take effect in 2027, which will prohibit… pic.twitter.com/FnNjYM7vjD

— Bitcoin News (@BitcoinNewsCom) February 6, 2025

This amendment is particularly ironic when we know that the National Assembly is currently embroiled in a drug consumption scandal. Furthermore, if we follow the same logic, let’s also ban banknotes since they all contain traces of cocaine. But then, how will our deputies get their powder?

The Senate highlights that the amendment aims to align with EU regulations that will come into force in 2027. The Mica law voted by the centre-right European People’s Party (EPP) prohibits financial services allowing anonymous transactions.

The Senate’s attitude is truly counterproductive. The Netherlands has just released the developer of Tornado Cash, Alexey Pertsev. Earlier in January, the federal court in Texas had annulled the sanctions imposed by the Office of Foreign Assets Control (OFAC) against Tornado Cash.

⚡️ NEW: Tornado Cash co-founder Alexey Pertsev will be released on February 7. pic.twitter.com/r7hYzj5JfN

— Cointelegraph (@Cointelegraph) February 6, 2025

The European Union’s relentless pursuit against bitcoin is shameful. So much time wasted because of overpaid ideologues who believe they can stifle such a profound technological breakthrough.

Meanwhile, the United States is just weeks away from creating a strategic reserve of bitcoins. Not to mention leveraging miners to balance the network and support their energy providers. In contrast, we still don’t know where to find the 70 billion that the next six French nuclear reactors will cost…

The utility of mixers

Bitcoin transactions are certainly pseudonymous, but all transactions are public. Each BTC is linked to a transaction history. It is possible to trace back to the very first block in which BTC were created.

[Currently, 3.125 BTC are created every block (every ten minutes) as a reward for the miners providing energy to secure the network]

Put differently, it suffices to be able to associate a transaction with an identity to know the entire history of future and upcoming transactions. Unfortunately, the fact is that obtaining bitcoins requires going through exchange platforms that force you to reveal your identity.

Thus, at a minimum, these platforms are a potential flaw. Or even your email provider! Indeed, Coinbase, Revolut, to name a few, do not hesitate to send emails containing the addresses used to withdraw BTC.

Not to mention data leaks due to hacks… Imagine a data leak revealing that you have withdrawn several bitcoins to a personal wallet! The recent kidnapping case of the co-founder of Ledger should remind us that privacy can be a matter of life or death.

In short, since Bitcoin transactions are public, the recipient of a transaction can consult the entire transaction history of the sender and vice versa. Not all privacy is lost, thanks to mixers (coinjoin).

Bitcoin coinjoin, concretely

In simple terms, a coinjoin is a mega transaction combining numerous transactions from dozens, if not hundreds, of people. This transaction will effectively shuffle the cards by creating transactions of the same amounts in output.

Imagine a helicopter chasing a car that suddenly enters a tunnel. And 100 identical cars emerge from the other side of the tunnel. Which one to follow?…

This is the principle of coinjoin. The goal is to break the link between transactions to create “plausible deniability”, as the Anglo-Saxons say.

Pushing your bitcoins through a coinjoin after withdrawing them from an exchange platform helps obscure the trails. The platform can no longer be certain about which addresses your BTC are on. In the event of data leaks, a malicious actor will no longer know if you still hold the BTC withdrawn from the platform.

Unfortunately, the main wallets offering the coinjoin option (Trezor, Wasabi) have closed their doors due to US legal action against the developers of Samurai. However, many options remain available online, notably joinmarket.

Here’s a series of articles to understand the mechanics of a coinjoin. It’s a great way to learn more about how bitcoin works:

-Bitcoin – Why should we not reuse our addresses?
-Bitcoin Coinjoin – How does it work?
-How Chainalysis tracks your bitcoins?
–UTXO and Privacy

Privacy is part of human rights. Let’s hope that the more pragmatic approach of the new American government soon spreads to the old continent. And that Christine Lagarde’s cherished CBDC project ends up in the dustbin.