Amidst a recent crackdown on self-custodial cryptocurrency wallet providers by U.S. regulatory agencies targeting major players like Consensys and Samourai Wallet, Acinq’s Phoenix Wallet and zkSNACKs’ Wasabi Wallet have made the decision to discontinue services for customers based in the United States.
Expressing concerns over the legitimacy of self-custodial wallet providers as money service businesses in the wake of regulatory actions, both Acinq and zkSNACKs have taken steps to restrict access for U.S. users.
“In light of recent announcements by U.S. authorities, zkSNACKs is now strictly prohibiting U.S. users from using its services,” stated zkSNACKs in an April 27 release.
Similarly, Acinq highlighted uncertainties regarding the regulatory landscape in an April 26 post, explaining, “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.”
Acinq has set a deadline of May 2 for Phoenix Wallet users to adapt to the impending changes, while Wasabi Wallet’s new policy was immediately put into effect.
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Advising Phoenix Wallet users to empty their wallets without force-closing them to avoid significant on-chain fees, Acinq provided guidance for the transition period.
Regulators worldwide have voiced concerns that self-custody crypto wallets might facilitate illicit activities like money laundering.
This sentiment was underscored by recent actions taken against Consensys and Samourai Wallet.
Consensys received a Wells notice from the SEC, signaling potential enforcement actions related to its MetaMask products, while the co-founders of Samourai Wallet face charges of money laundering and operating an unlicensed money transmitting business brought by the U.S. Justice Department.
In contrast, European regulators have taken a more relaxed stance on potential regulations concerning self-custody wallets.
Scrapping a proposed 1,000 euro limit on crypto payments from self-hosted wallets, European Parliament’s lead committees emphasized the importance of due diligence measures by crypto exchanges for transactions exceeding this threshold.
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