U.S. Crackdown Leads to Sudden Withdrawal of Crypto Wallet Services

Acinq, zkSNACKs exit US, highlight regulatory challenges.
US crackdown prompts Acinq and zkSNACKs to cease services.
Acinq, zkSNACKs adapt strategy amidst regulatory shift.

Acinq and zkSNACKs, prominent in the cryptocurrency wallet service market, have recently withdrawn from the United States. Acinq’s Phoenix Wallet and zkSNACKs’ Wasabi Wallet will cease operations for U.S. customers due to the intensified scrutiny of self-custody cryptocurrency wallets by U.S. authorities.

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Recent actions against Consensys and Samourai Wallet have caused a ripple effect in the cryptocurrency service sector. These incidents have led to heightened uncertainty regarding the status of self-custodial wallet providers as legitimate money services businesses.

Consequently, Acinq and zkSNACKs are taking preemptive measures to safeguard their operations. Acinq has informed Phoenix Wallet users they have until May 2 to prepare for the impending changes. Meanwhile, Wasabi Wallet immediately implemented its new policy, urging users to comply immediately.

Industry Adapts Amid Regulatory Changes

These wallet services’ pivot away from the U.S. market underlines the broader impact of the U.S. crackdown on self-custody solutions. Phoenix Wallet has advised users to transfer their funds but has warned against “force-closing” wallets due to potentially high on-chain fees. This guidance comes as global regulators express concerns that self-custody crypto wallets could be used to facilitate illicit activities such as money laundering.

These developments arrive amidst increased regulatory scrutiny within the U.S. On April 25, reports emerged of Consensys receiving a Wells notice from the SEC, hinting at possible enforcement actions. This news was followed by the arrest of the co-founders of Samourai Wallet on charges related to money laundering and operating an unlicensed money-transmitting business. These regulatory measures have sent a clear signal to the crypto industry, resulting in a cautious approach by wallet service providers.

The crypto community watches closely as the balance between innovation and regulation continues to shape the future of digital assets. Acinq and zkSNACKs’ response signifies a shift in the industry, emphasising the need for compliance and the importance of operating within the boundaries of regulatory frameworks.

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Antonella Martin

Antonella is a cryptocurrency and news writer who travels the world, finding inspiration in diverse cultures. She cherishes moments sitting on the beach, watching sunsets. Through her writing, Antonella explores the dynamic realm of cryptocurrency and delivers insightful news. Her work encapsulates both the excitement of finance and the serenity of nature's beauty.