Part 7/13:
Beyond Samurai Wallet, the discussion extends to the entire privacy ecosystem—including CoinJoin mixers like Wasabi, privacy protocols like CoinJoin, and even Lightning Network service providers.
Rehypothecation and Fungibility Issues
One concern is how traditional financial systems and custodial services frequently rehypothecate (reuse) assets, undermining Bitcoin’s core property of fungibility—where each coin should be indistinguishable from any other. Regulators could leverage traceability of Bitcoin’s transaction history, making it easier to link an address to illicit activity and potentially classify self-custodial tools as illegal money transmitters.