Phoenix Wallet, a Bitcoin wallet provider for the Lightning Network, is leaving US app stores due to regulatory issues. ACINQ, its developer, has criticized the uncertainty around self-custodial wallets’ regulation in the US. Following the FBI’s warning against unregistered crypto money services, ACINQ announced Phoenix Wallet’s removal from US app stores on May 3rd, 2024.
The Phoenix Wallet, which allows Bitcoin transactions through the Lightning Network and is managed by ACINQ, has announced its upcoming deletion from US app marketplaces. This decision follows ACINQ’s criticism towards the regulatory environment surrounding self-custodial wallets in the United States.
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Phoenix Wallet Terminates US Services Over Regulatory Discrimination
As a researcher studying the developments within the cryptocurrency industry, I was dismayed to learn that ACINQ, creators of Phoenix Wallet, voiced their disappointment on April 26th over the exclusion of self-custodial wallet providers, Lightning service providers, and Lightning nodes from being recognized as money services businesses. This sentiment stemmed from a recent warning issued by the US Federal Bureau of Investigation, urging users to avoid unregistered crypto money-transmitting businesses.
New information released by American regulatory bodies raises questions about the potential classification of self-custodial wallet providers, Lightning service suppliers, and even Lightning network nodes as Money Services Businesses (MSBs), subjecting them to regulatory oversight.
— ACINQ (@acinq_co) April 26, 2024
Self-custodial wallets, which don’t involve any Know Your Customer (KYC) process, were identified by US authorities as the main category of money-transmitting services that don’t require regulatory oversight. Subsequently, ACIQN declared on May 3rd, 2024, that they would be removing their Phoenix wallet app from all US application stores.
Phoenix Wallet has urged its US users to take action by draining their wallets. To do this, they should access ‘Settings’ on Android devices and choose ‘Close Channels,’ or on iOS devices, select ‘Drain Wallet.’ Additionally, Phoenix strongly recommends against forcefully closing channels to prevent hefty on-chain fees.
In addition to ACIQN, zkSNACKs has restricted US citizens from utilizing its Wasabi crypto wallet and related offerings. The rationale behind this move wasn’t explicitly stated, but the company pointed to “recent statements from US regulatory bodies” as a motivating factor.
It’s yet to be determined if these latest departures of crypto businesses from the US will lead to a large-scale departure of companies from this jurisdiction, given its ongoing criticism for having an unclear regulatory landscape for the emerging sector.
Amidst the SEC’s persistent efforts to regulate crypto exchanges and the DOJ’s recent actions against developers for alleged misuse by sanctioned parties, crypto supporters are urgently calling for congressional intervention in the United States.
Crypto Market Overview
Recently, the cryptocurrency market has shown impressive growth, increasing by 2.70% in just one day to reach a total market capitalization of $2.38 trillion. It’s worth noting that Ethereum (ETH) and Solana (SOL) have been particularly strong performers among the top 10 cryptocurrencies, with daily gains of 6.20% for Ethereum and 5.34% for Solana respectively. Bitcoin, the largest cryptocurrency by market capitalization, has also risen, trading at $63,855 after a gain of 1.46%.
Total crypto market cap valued at $2.314 trillion | Source: TOTAL chart on Tradingview.com
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2024-04-28 18:11