The Departure of Phoenix and Wasabi Wallets from the US Market
In recent developments, the creators of Bitcoin wallets Phoenix Wallet and Wasabi Wallet have made the decision to discontinue their services for consumers in the United States. This decision comes in the wake of increasing scrutiny and enforcement actions involving self-custody cryptocurrency wallets in the US market.
Wasabi Wallet Takes a Stand
Wasabi Wallet maker zkSNACKs has taken a firm stance by blocking US citizens and residents from accessing its websites and products. This includes preventing them from downloading the wallet and utilizing associated features such as API and RPC interfaces.
- An IP address block has been implemented for US residents on specific websites related to Wasabi Wallet.
- US citizens and residents are not permitted to download Wasabi Wallet or utilize its coinjoin feature.
Phoenix Wallet Follows Suit
Similarly, Phoenix Wallet has announced that its app will no longer be available in US app stores, prompting users based in the US to withdraw their funds before May 3rd.
- US users are advised to empty their wallets using specific guidelines provided by Phoenix Wallet.
- Users are encouraged to avoid force-closing channels to minimize on-chain fees.
Regulatory Actions Prompt Exodus
The decisions by Phoenix and Wasabi Wallet to exit the US market come in response to recent enforcement actions targeting self-custody cryptocurrency wallets:
- Samourai Wallet co-founders were arrested for allegedly operating an unlicensed money-transmitting business.
- The SEC issued a Wells Notice to Consensys, signaling potential enforcement action against MetaMask creators.
Challenges Faced by Self-Custodial Wallet Providers
ACINQ, the company behind Phoenix Wallet, highlighted the regulatory uncertainty surrounding self-custodial wallet providers in the US:
- US authorities’ recent announcements have raised concerns about the classification and regulation of self-custodial wallet providers.
- Lightning service providers and nodes may also face potential regulatory challenges in the future.
Hot Take: Phoenix and Wasabi Wallets Exit the US Amid Regulatory Pressure
As authorities in the US intensify their focus on self-custody cryptocurrency wallets, Phoenix Wallet and Wasabi Wallet have chosen to cease operations for US consumers. The regulatory landscape in the US regarding cryptocurrency services continues to evolve, leading to increased scrutiny and enforcement actions against industry players.
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