Announcing their decision to cease operations in the US, these wallet firms are halting services for their domestic users. US market The wallets by Acinq and zkSNACKs, like Phoenix Wallet and Wasabi Wallet, are among those impacted.
Increasing concern over regulatory actions in the US has led two self-custody crypto wallet providers to pull out from the market.
Acinq communicated worries that new regulatory moves might necessitate them registering as Money Service Businesses, imposing further compliance burdens.
“US regulatory announcements have raised uncertainty about whether self-custody wallets might be deemed Money Services Businesses under new regulations,” Acinq expressed.
US Becomes Uncompetitive Market
The withdrawal by Acinq entails that Phoenix Wallet will be removed from US app stores, urging American users to transfer their funds by May 2.
zkSNACKs, meanwhile, has implemented a block on US IP addresses to restrict access to its digital platforms - wasabiwallet.io and more.
This restriction touches all US-based individuals including permanent residents, being a more immediate move compared to Acinq's strategy.
The move addresses the heightened scrutiny on self-hosted crypto wallets as the US ups its regulatory review.
MetaMask Gets Nailed
The SEC has targeted entities like Consensys, questioning the legal groundings of Web3 wallet MetaMask.
Consensys disclosed they received a Wells Notice, indicating potential litigation impending from the SEC.
The firm defended its stance, arguing ETH does not qualify as a security and that offering staking is compliant with securities regulations.
A surprising revelation came as Samourai Wallet's founders were apprehended for alleged laundering activities.
Samourai Wallet provides mixing functionalities such as Whirlpool, blending users' funds to obscure their origin.
The DOJ has accused Samourai Wallet’s founders, citing social media endorsements of contentious figures.
Global Disparity
These legal actions have sparked debate within the crypto sphere, with some defending Samourai’s legitimate financial uses.
The US's focus on self-custody crypto wallets contrasts with Europe's evolving, more lenient regulatory stance.
The European Parliament mandates stricter crypto compliance measures but spares purely technological developers.
Circle's Patrick Hansen confirms that EU regulations exempt non-custodial wallet software like MetaMask from stringent compliance.
