ACINQ’s Bitcoin wallet, Phoenix Wallet, and zkSNACKs’ Wasabi Wallet are discontinuing their services for customers in the United States. This decision comes in response to the recent crackdown on two major self-custodial cryptocurrency wallet providers by U.S. regulatory agencies. Both ACINQ and zkSNACKs have expressed concerns about the legitimacy of self-custodial wallet providers as money service businesses, following actions taken against Consensys and Samourai Wallet.
zkSNACKs stated in a statement on April 27 that they are now strictly prohibiting U.S. users from using their services due to the recent announcements by U.S. authorities. ACINQ, in an April 26 post on X, explained that recent announcements from U.S. authorities have raised doubts about whether self-custodial wallet providers, Lightning service providers, or even Lightning nodes can be considered Money Services Businesses and regulated accordingly.
ACINQ has given Phoenix Wallet users until May 2 to adjust to the upcoming changes, while the new policy at Wasabi Wallet was implemented immediately. ACINQ advised Phoenix Wallet users to drain their wallets without force-closing them to avoid significant on-chain fees.
Regulators worldwide have been arguing that self-custody crypto wallets may facilitate illicit activities such as money laundering. Consensys received a Wells notice from the SEC on April 10, warning of potential enforcement actions related to its MetaMask Swaps and MetaMask Staking products. The SEC alleged that Consensys was operating as an unregistered broker-dealer. In a separate incident, the co-founders of Samourai Wallet were arrested on April 24 on charges of money laundering brought by the U.S. Justice Department and other agencies. European regulators, on the other hand, have recently relaxed proposed regulations concerning self-custody wallets.
In conclusion, the discontinuation of services by Phoenix Wallet and Wasabi Wallet for U.S. customers is a response to the crackdown on self-custodial cryptocurrency wallet providers. The recent actions against Consensys and Samourai Wallet have raised concerns about the legitimacy of such providers as money service businesses. While regulators worldwide argue that self-custody wallets may facilitate illicit activities, European regulators have relaxed proposed regulations concerning these wallets.