Two Bitcoin wallets are being withdrawn from the US market, likely due to recent regulatory action taken against the non-custodial Samurai Wallet and the US Securities and Exchange Commission's decision to remove the most popular Ethereum access point. This is likely in response to signs that they are investigating MetaMask.
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On Friday, Paris-based Bitcoin company Acinq announced it would remove its popular Lightning Network wallet Phoenix from U.S. app stores, citing regulatory uncertainty. Users are encouraged to close channels and transfer funds before access ends on May 3, 2023.
The next day, zkSNACKs stated in an April 27 article, “In light of recent announcements by U.S. authorities, zkSNACKs is now strictly prohibiting U.S. users from using its services.'' announced that it would block access to the site in the United States. statement.
This point was echoed in Acinq's statement, stating, “Recent announcements from U.S. authorities indicate that self-custodial wallet providers, Lightning service providers, and even Lightning nodes are considered money services businesses and will be regulated as such. It raises questions about whether that is the case.”
It's unclear exactly what announcements Acinq is responding to, but the legal action taken against Samourai Wallet and the recently published Wells Notice regarding inquiries regarding MetaMask indicate that non-custodial wallets are This indicates that it may fall within the scope of US regulations.
Additionally, an April 26 U.S. Department of Justice court filing in response to a motion to dismiss the lawsuit against Tornado Cash co-founder Roman Storm states that even though a decentralized, non-custodial service This indicates that you will likely need to implement KYC/AML and register with FinCEN. 1960 of the United States Code.
“This expands the MSB Act to encompass virtually all of the crypto space other than users running their own nodes,” said crypto advocate Seth ForPrivacy. Ta. I wrote to X. “Anything that facilitates the use of Bitcoin could fall under this overly broad definition if there are no controls required for transfers.”
Many observers of the crypto community have noted that the decision to pull Phoenix out of the US is disappointing, but almost understandable given the legal uncertainty. Jack Dorsey, founder of fintech company Block, which developed the hardware wallet, lamented Acinq's move. “It feels completely unnecessary.”
“Agreed. This is not the way.” Lightning Labs CEO Elizabeth Stark answered and said To Mr. Dorsey.
This news comes on the heels of recent indictments against cryptocurrency companies, with Samurai Wallet CEO Keonne Rodriguez and Chief Technology Officer William Hill being arrested for operating an unlicensed money transfer business. The Department of Justice alleges that Samurai has processed more than $2 billion in illegal transactions and earned more than $4.5 million in fees since 2015.
Although legal experts dispute the rationale for pursuing non-custodial platforms that do not hold assets on behalf of users, authorities around the world have long sought to bring these software systems under some regulatory oversight. I've been trying.
For example, the EU is considering imposing a €1,000 ($1,080) limit on crypto transactions from self-hosted crypto wallets as part of new anti-money laundering legislation. U.S. authorities are also considering introducing legislation that would effectively ban “unhosted wallets,” but this was successfully blocked in 2022.
However, new legal actions and statements from authorities have increased uncertainty, raising the prospect that many core crypto activities beyond building wallets may fall under this category. Remittance methodincluding even numbers Host Lightning nodes. As with many other things in cryptocurrencies, these concerns will likely come down to court rulings, which is part of the reason ConsenSys decided to sue the SEC.
It is unclear whether Phoenix and Wasabi will be the only wallets to leave the U.S., but at least one wallet company, Zeus, has made it clear that it will remain. “We're not going anywhere” Zeus' account Said At X.
“We believe that Zeus is currently following the provisions of the law. If the law changes or any rulings are made, we will make adjustments accordingly,” said Zeus founder Evan Karoudis. said.
“If Zeus falls, next up are all the other Lightning node operators. If a Lightning node operator falls, next up is self-care. This is the hill to die on, it’s self-care. Agreed. If you can't, you've never used Bitcoin for a good reason. So follow us or go home. Future generations are watching over us and counting on us.”
