In reaction to the recent crackdown on two prominent self-custodial cryptocurrency wallet providers, Acinq’s Bitcoin wallet, Phoenix Wallet, and zkSNACKs’ Wasabi Wallet are both stopping services for consumers in the United States. Concerns were voiced by Acinq and zkSNACKs over the legitimacy of self-custodial wallet providers in the wake of U.S. regulatory bodies’ recent actions against Consensys, the company that created Metamask, and Samourai Wallet, a cryptocurrency mixer. “zkSNACKs is now strictly prohibiting U.S. users from using its services,” the company stated in a statement on April 27 in response to recent announcements made by U.S. authorities.
In a post published on X on April 26, Acinq stated, “Recent announcements from US authorities cast a doubt on whether self-custodial wallet providers, Lightning service providers, or even Lightning nodes could be considered Money Services Businesses and be regulated as such.”While Wasabi Wallet’s new policy went into effect “immediately,” Acinq has allowed Phoenix Wallet users until May 2 to make the necessary adjustments.
Users of Phoenix Wallets should empty their wallets, however Acinq advised against “force-closing” them since “on-chain fees could be significant.”
Regulators from all around the world have recently contended that self-custody cryptocurrency wallets can help to facilitate illegal activities like money laundering.According to reports on April 25, Consensys received a Wells notice from the SEC on April 10 alerting the company to possible enforcement actions over its MetaMask Staking and Swaps products.
During a phone conference, the SEC purportedly claimed that Consensys was conducting business as an unlicensed broker-dealer.A day prior, on April 24, it was revealed that the co-founders of Samourai Wallet, a cryptocurrency mixer, had been detained on suspicion of money laundering by the U.S. Justice Department and other law enforcement organizations.
The chief technology officer William Hill and CEO Keonne Rodriguez of Samourai Wallet are each charged with one count of conspiracy to operate an unlicensed money transmitting business, which carries a maximum sentence of five years in prison, and one count of conspiracy to commit money laundering, which carries a maximum sentence of twenty years in prison.
Meanwhile, possible suggested laws pertaining to self-custody wallets have lately been loosened by European regulators.As part of new anti-money laundering rules, most main committees of the European Parliament eliminated a $1,000 ($1,080) cap on cryptocurrency payments from self-hosted wallets on March 23.
Nonetheless, users who transact at least 1,000 euros in business must submit to due diligence by means of identity verification checks conducted by cryptocurrency exchanges.