Phoenix Wallet, a Lightning payment Bitcoin wallet, is no longer available for U.S. residents starting May 3. ACINQ, the company behind Phoenix Wallet, plans to remove it from U.S. app stores, leaving American users without access. The reason for this decision isn’t clear yet, but recent U.S. government statements have raised doubts about the regulatory status of self-custodial wallets and Lightning service providers.
Starting May 3, Phoenix Wallet, a Bitcoin wallet specialized for Lightning Network transactions, will no longer support users based in the United States.
Starting from a specific date, Phoenix Wallet, which is managed by ACINQ, will no longer be available for download on app markets based in the United States. Consequently, individuals residing in the U.S. will lose access to this application.
Beginning May 3, 2024, @PhoenixWallet will no longer be available for download in US app stores. To avoid losing access to your funds, US users are advised to take the following steps:
— Phoenix Wallet (@PhoenixWallet) April 26, 2024
The company urges its American clients to process their withdrawals promptly. Yet, they caution against hasty wallet closures, explaining that such actions might incur increased on-chain transaction fees.
The company recommended that its American iOS users visit the wallet’s settings and select “drain wallet,” while Android users should likewise access the settings and tap “close channels” to securely deplete their digital wallets.
There’s no clear explanation from the U.S. authorities on why ACINQ’s self-custodial wallet, Strike, was removed from app stores. However, based on recent government declarations, it seems plausible that self-custodial wallets, Lightning service providers, or even Lightning nodes could be classified as Money Services Businesses and therefore subjected to regulation.
New information released by American regulatory bodies has raised questions about the potential classification of self-custodial wallet providers, Lightning service providers, and even Lightning node operators as Money Services Businesses (MSBs), subjecting them to regulatory oversight.
— ACINQ (@acinq_co) April 26, 2024
As a crypto investor, I’ve recently learned that the company has made a decision following some legal actions taken against the creators of Samourai, a popular Bitcoin mixing wallet. This means that the company is taking steps in response to these developments.
On April 24th, the US Attorney’s Office in the Southern District of New York revealed that Samourai Wallet founders Keonne Rodriguez and William Lonergan Hill had been indicted. The prosecutors alleged that these individuals assisted in conducting unlawful transactions using the Samourai platform. According to the indictment, Rodriguez stands to serve a maximum sentence of 20 years in prison if found guilty, while Hill could potentially face up to five years.
According to the U.S. Department of Justice, I’ve uncovered allegations that the creators of Samourai knowingly facilitated over $2 billion in unlawful transactions via their platform since 2015, raking in over $4.5 million in fees during this period. The platform was actively marketed as a means to bypass censorship and support illicit activities.
As a crypto investor, I’ve come to realize that the recent arrest of Rodriguez by the FBI comes with a cautionary note for users dealing with unregistered crypto firms suspected to function as money services businesses. This law enforcement action aligns with the ongoing trend of U.S. authorities clamping down on wallets and mixers involved in allegedly illicit activities.
The indictment news has sparked strong reactions within the cryptocurrency sphere. Notably, CryptoQuant CEO Ki Young Ju has spoken up in support of Rodriguez and Hill, emphasizing that safeguarding privacy is a crucial element inherent to the very nature of Bitcoin.
Ju drew an analogy between the current predicament and penalizing the innovator of a knife rather than the individual who misutilizes it. He underscored the significance of the inventor’s intention in determining the tool’s lawfulness.
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2024-04-27 22:44