Phoenix Wallet suspends operations for US users due to the unpredictability of regulations.
Phoenix Wallet’s developer, ACINQ, intends to take the app down from American app stores on the specified date, so American users won’t be able to use it after then.
Customers in the United States are encouraged by the corporation to take their money out right away. It did advise against forcing the wallets to close, though, since that could result in increased on-chain fees.
Instead, the company encouraged American iOS users to go to the wallet’s settings page and select “drain wallet.” Android users are also advised to safely empty their wallets by going to the settings section and selecting “close channels.”
There is no official explanation for why the wallet was removed from US app stores. In a tweet, ACINQ did, however, imply that there is uncertainty about whether self-custodial wallets, Lightning service providers, or even Lightning nodes could be deemed Money Services Businesses and subject to regulation in light of recent pronouncements from the US government.
The Southern District of New York federal prosecutors stated on April 24 that they had indicted William Lonergan Hill and Keonne Rodriguez, the founders of Samourai Wallet.
They are being accused by Rodriguez and Hill of supporting illicit activities via Samourai. According to the indictment, Hill could spend up to five years in jail and Rodriguez could spend up to twenty years.
The makers of Samourai, according to the U.S. Department of Justice, allegedly approved over $2 billion in illegal transactions over the platform and have made over $4.5 million in fees since 2015. Additionally, it asserts that Samourai was promoted as a tool for supporting illegal activity and censorship resistance.
The arrest of Rodriguez was accompanied by a warning from the FBI to users about ‘operations’ on unregistered crypto firms believed to be money services businesses. This crackdown follows a pattern of U.S. authorities targeting wallets and mixers involved in what they deem to be questionable activities.
The indictments have provoked an outcry from the crypto community, with CryptoQuant CEO Ki Young Ju coming to the defense of Rodriguez and Hill, arguing that privacy protection is a fundamental aspect of Bitcoin.
Ju compared the situation to punishing the inventor of a knife instead of the one who misuses it, emphasizing that the intent behind using a tool determines its legality.
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