Phoenix and Wasabi pull out of the US market as self-custody wallets come under investigation
Other US-based crypto service providers are understandably scared after recent regulatory action against Samourai and Consensys.
In light of the recent crackdown on two prominent self-custodial cryptocurrency wallet providers, ACINQ’s Phoenix Wallet and zkSNACKs’ Wasabi Wallet have both decided to stop serving clients in the United States.
In light of the recent actions taken by U.S. regulatory authorities against Consensys, the founder of Metamask, and Samourai Wallet, a crypto mixer, ACINQ and zkSNACKs have voiced worries regarding the legitimacy of self-custodial wallet providers.
According to a statement released on April 27 by zkSNACKs, “zkSNACKs is now firmly barring U.S. users from accessing its services” due to recent pronouncements by Washington authorities.
“In an April 26 article on X, ACINQ noted that recent pronouncements from US authorities have raised questions about the potential classification of self-custodial wallet providers, Lightning service providers, or even Lightning nodes as Money Services Businesses and the subsequent regulation of these entities.”
Wasabi Wallet’s new policy is “effective immediately,” whereas ACINQ has given Phoenix Wallet users until May 2 to make the necessary adjustments.
In order to prevent “on-chain costs might be large,” ACINQ warned Phoenix Wallet users not to “force-close” their wallets, but rather to “drain” them.
Authorities throughout the globe have recently voiced concerns that cryptocurrency wallets that users keep in their own possession can aid in the facilitation of illegal operations like money laundering.
Consensys reportedly got a Wells notice from the SEC on April 10, alerting the company to possible enforcement proceedings over its MetaMask Staking and MetaMask Swaps products, according to Cointelegraph’s reporting on April 25.
It was purportedly during a phone conference that the SEC said that Consensys was acting as an unlicensed broker-dealer.
Cointelegraph revealed the arrest of the co-founders of cryptocurrency mixer Samourai Wallet on April 24th, only one day before the U.S. Justice Department (DOJ) and other authorities presented allegations of money laundering against them.
Among the charges against Samourai Wallet’s chief tech officer William Hill and CEO Keonne Rodriguez is one of conspiracy to conduct money laundering, which carries a maximum sentence of twenty years in prison. Additionally, Hill faces a five-year sentence for conspiracy to operate an unlicensed money transmitting business.
Meanwhile, authorities across Europe have lately eased restrictions on self-custody wallets. According to Cointelegraph, a number of lead committees in the European Parliament removed a cap of 1,000 euros ($1,080) on cryptocurrency payments made via self-hosted wallets as part of revised anti-money laundering regulations on March 23.
On the other hand, cryptocurrency exchanges are required to do due diligence on customers who transact 1,000 EUR or more in business by checking their identities.
Also Read: Oklahoma Legislation Expands Protections for Bitcoin Owners and Managers
