Key Insights
- Bitcoin wallet providers zkSNACKs (Wasabi Wallet) and Acinq (Phoenix Wallet) have blocked U.S. users from accessing their services.
- The move comes amid regulatory uncertainty over whether self-custodial wallets could be classified as money services businesses requiring regulation.
- It follows the recent arrests of founders of other privacy-focused crypto wallets and mixing services by U.S. authorities.
LONDON (MarketsXplora) – Several Bitcoin wallet providers including zkSNACKs, developer of the privacy-focused Wasabi Wallet, and Acinq, maker of Phoenix Wallet, have barred users in the United States from accessing their services over regulatory concerns, the companies said.
zkSNACKs said on Saturday it had implemented an IP address firewall blocking U.S. users “effective immediately” from visiting its websites, downloading Wasabi Wallet and using any related products and services like APIs and interfaces.
The move comes amid “recent announcements by U.S. authorities” that have cast doubt over whether self-custodial crypto wallets and Lightning service providers could be classified as money services businesses requiring regulation, zkSNACKs said.
Acinq, in a post on the social media platform X, formerly Twitter, also said it would discontinue Phoenix Wallet services for U.S. customers from May 2, citing similar regulatory uncertainties around self-custodial wallets and Lightning nodes.
“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 explained.
While not explicitly stated, the wallet providers’ moves follow the arrest this week of the founders of Samourai Wallet, another Bitcoin wallet with privacy features that U.S. officials say enabled money laundering.
That case came after the 2022 arrest of key personnel behind the Ethereum mixing service Tornado Cash, which prosecutors alleged was used by criminals despite its design to boost transaction anonymity.
“In light of the recent announcements from U.S. authorities, uncertainty lies on whether self-custodial wallets such as Wasabi Wallet could be considered money transmitters,” a zkSNACKs spokesperson told MarketsXplora.
“Although we believe that Wasabi Wallet is complying with current legislations and regulations, zkSNACKs is taking a conservative approach and decided to not be exposed to the regulatory uncertainty of the U.S.”
Industry advocates have argued that prosecuting open-source developers over how users deploy their products could infringe on free speech rights.
Bitcoin companies have faced increased scrutiny from U.S. authorities over anti-money laundering and sanctions compliance in recent years.