The developers of Wasabi Wallet and Phoenix Wallet are blocking their respective crypto wallet apps for US users.
The lawsuit filed by the US Department of Justice against the founders of the Bitcoin wallet Samourai Wallet and the warning issued by the FBI about the use of cryptocurrency services without KYC have unleashed a wave of reactions in the crypto community.
Experts have criticized the government's new attacks on cryptocurrency privacy and self-custody, while developers of projects similar to Samourai Wallet are rushing to implement more restrictive measures to prevent their products and services from being accessible to US users.
An indefinite block for US users
zkSNACKs, which develops the open-source, non-custodial Bitcoin wallet Wasabi Wallet, announced recently on the Blocking U.S. citizens and residents; a measure implemented to prevent these people from being able to use their services.
The zkSNACKs developers blocked US users from visiting their website, downloading the Wasabi Wallet app, and even accessing any of the company's related products and services, such as APIs and RPC interfaces.
The Lightning Network-natively compatible wallet Phoenix Wallet also implemented similar measures to exclude US users from its products and services. Via X (formerly Twitter), the developers of the next-generation Bitcoin wallet said that the Phoenix app is already will not be available in app stores in the United States starting May 3.
Much like zkSNACKs, Phoenix Wallet developers are restricting accessibility to US users, to protect themselves from the country's ongoing regulatory crackdown on cryptocurrencies.
In the post on X, Phoenix Wallet developers stressed that users in the country who are using their Bitcoin wallet will need to withdraw their funds before the announced closure date, and also recommended not forcing the closure of Lightning Network payment channels due to the potential cost of fees.
Given the restrictive measures announced by both projects, the crypto community is questioning the impact of US regulatory sanctions on non-custodial Bitcoin wallets, also known as self-custodial, which should not be considered money transmitters because they do not custody or control users' assets and do not perform any transactions on behalf of users.
Regulatory uncertainty regarding cryptocurrencies is growing in the country
Wasabi Wallet and Phoenix Wallet are among the most popular crypto wallets in the crypto industry, due to an intuitive user interface and the advantages they offer to their users.
The first, Wasabi, is designed to help users protect the privacy of their financial data by providing easy access to tools that allow users to maintain control over their private keys and the privacy of their transactions. The second, Phoenix, is one of the most popular Bitcoin wallets for payments using the Lightning Network, the Bitcoin network's scalability solution.
Both Bitcoin wallets are non-custodial, however, due to the lack of precision in the measures that US regulators are taking against cryptocurrencies, their creators decided to close their services to users in the country, due to the growing uncertainty that weighs on the cryptoasset industry.
“In light of recent announcements by US authorities, zkSNACKs now strictly prohibits US users from using its services,” Wasabi Wallet developers said in the statement.
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