Phoenix Wallet, a Bitcoin wallet that facilitates payments via Lightning Network, has declared that it will soon be taken down from US app stores. This occurs at the same time that ACINQ, the company that created the wallet, is criticizing US regulations governing self-custodial wallets.
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Phoenix Wallet Closes US Operations Due to Discrimination in Regulations
The creators of Phoenix Wallet, ACINQ, expressed disappointment on April 26 about the exclusion of Lightning service providers, self-custodial wallet providers, and Lightning nodes from the list of money services businesses. The US Federal Bureau of Investigation recently issued a warning to users about participating in unregistered cryptocurrency money-transmitting businesses, which served as the impetus for ACINQ’s statement.
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The US authorities specifically emphasized that the most common kind of these money-transmitting services are self-custodial wallets, which don’t require a know-your-customer process. After releasing the initial announcement, ACIQN has now declared that the Phoenix wallet app will be taken down from all US app stores on May 3rd, 2024.
getting ready. Users in the US are advised to empty their wallets by Phoenix Wallet. Additionally, they recommended against “force-closing” channels in order to save hefty on-chain costs. Phoenix provided users with clear instructions through an X post: they should empty their wallets by going to “Settings” and choosing “Drain Wallet” on iOS devices or “Close Channels” on Android devices.
In addition to ACIQN, zkSNACKs has prohibited US citizens from using its Wasabi cryptocurrency wallet and any related goods or services. The cryptocurrency company stated that “recent announcements by US authorities” were a contributing factor in their decision, though they did not provide a specific explanation for their actions.
It is yet to be seen, though, if the recent voluntary departures will lead to a significant migration of cryptocurrency companies out of the US, which is frequently chastised for having an unclear regulatory environment for the fledgling sector.
Crypto enthusiasts can only look to the US Congress for immediate legislative intervention due to the Securities and Exchange Commission’s (SEC) ongoing crackdown on cryptocurrency exchanges and the Department of Justice’s recent pursuit of developers for the improper use of their platforms by sanctioned entities.
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