ZKSNACKS Bans US Customers Over “Regulation Concerns”

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Regulatory concerns have led zkSNACKs to restrict access to its platforms for US customers, specifically preventing them from downloading and using Wasabi Wallet and related services. The company introduced an IP address firewall to achieve this. The policy change is believed to be connected to the arrest of two Samourai Wallet founders, Keonne Rodriguez and William Lonergan Hill, who were charged by the US Department of Justice (DOJ) with laundering $100 million through their crypto mixing service. This charge carries a potential sentence of up to 20 years in prison for conspiracy to commit money laundering, and five years for operating an unlicensed money transmitting business. Samourai Wallet is thought to be a Bitcoin wallet that enhances privacy for transactions. However, regulators view it as a cover for large-scale money laundering. Approximately 80,000 BTC, worth around $3.2 billion at current prices, has passed through Whirlpool and Ricochet, two Samourai services, accumulating fees totaling approximately $4.5 million.

Due to certain regulatory issues, zkSNACKs has limited the use of its platform for customers residing in the United States.

Samourai Wallet Crackdown Possibly Triggered zkSNACKs

Wasabi Wallet, the Bitcoin wallet developed by zkSNACKs that enhances user privacy, has restricted access to their platforms for individuals residing or holding citizenship in the United States.

Individuals in this particular group are unable to access the zkSNACKs website to obtain and employ Wasabi Wallet and associated offerings such as APIs and RPC interfaces. To enforce this restriction, the platform implemented a firewall that blocks specific IP addresses.

As a researcher looking into this situation, I’ve noticed that the developer failed to provide a clear explanation for the recent policy change and withdrawal. However, based on available information, it appears that these actions may be connected to the arrest of two Samourai project founders.

The US Department of Justice (DOJ) accused Samourai Wallet’s founders, Keonne Rodriguez and William Lonergan Hill, of laundering $100 million through their crypto tumbling service. According to the charges, they could face a maximum prison term of 20 years for money laundering conspiracy, and up to five years for operating an unlicensed money transmitting business.

As a crypto investor, I’ve come across Samourai Wallet, a Bitcoin (BTC) wallet known for enhancing the privacy of transactions. However, there are conflicting opinions regarding its true intentions. Some regulators suspect that this service is merely a disguise for a complex money laundering operation on an extensive scale. To date, around 80,000 BTC, equivalent to approximately $453 million at current prices, have been processed through Whirlpool and Ricochet – two Samourai services, accumulating fees worth about $4.5 million.

More Crypto Projects Go Under the Bus

The founders of Tornado Cash, a well-known cryptocurrency mixing service under scrutiny for alleged involvement in illicit activities, have been taken into custody. In response to the accusations, these individuals have put forth their defense and filed a motion to dismiss the charges brought against them.

The DOJ has answered Semenov’s MTD request, but its response did not align with his expectations. The regulatory body emphasized that Semenov, a Tornado Cash co-founder, must address the criminal charges brought against him due to his significant involvement in keeping Tornado Cash’s website operational.

He was similarly charged with operating a cryptocurrency tumbler and facilitating anonymity for criminals on the site. It’s important to note that such regulatory crackdowns against crypto initiatives are increasingly common.

Leaving voluntarily, zkSNACKs could be Wasabi’s strategy to avoid any potential legal issues in the future.

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2024-04-28 01:22