Non-custodial Bitcoin wallets Phoenix Wallet and Wasabi Wallet are no longer available to U.S. users, as local authorities’ actions against self-custody crypto wallet providers call into question the legality of their operations in the country.
Representatives of zkSNACKs, the developer of Wasabi Wallet, announced that the crypto wallet app, the company’s websites, and all Wasabi-related products and services, including APIs and RPC interfaces, are no longer available to users from the United States. The team cited “recent announcements by U.S. authorities” as the reason for this decision.
Shortly after, Acinq, the team behind the Phoenix Wallet, made a similar decision, announcing that the app would no longer be available to users in the United States starting May 3. The team also cited “recent statements from U.S. authorities” as the official reason for shutting down the service.
The statement mentioned by both organizations is a public announcement made by the FBI on April 25. The bureau urged Americans to use only registered cryptocurrency service providers. As part of an initiative to cleanse the market of illegal crypto services, the U.S. Department of Justice filed charges against the co-founders of Samourai Wallet, Keonne Rodriguez, CEO, and William Lonergan Hill, CTO. They’re charged with operating an unlicensed business, conducting more than $2 billion in illegal transactions, and laundering more than $100 million in criminal proceeds.
The U.S. Internal Revenue Service and Federal Bureau of Investigation brought charges against Samourai Wallet, citing the crypto wallet’s functionality, which allows users to mix transactions, essentially acting as a crypto mixer. However, the cryptocurrency wallet app came under fire as a result, triggering other providers of similar services to flee.
The developers of Samourai Wallet created several innovative features that provide crypto wallet users with complete transaction anonymity. The Whirlpool service allows users to mix transactions to increase anonymity, and the Ricochet service redirects transactions through several random addresses before they’re finally sent.
U.S. authorities took an aggressive stance against crypto mixers. In 2022, the Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash, recognizing it as a platform for laundering criminal proceeds and effectively banning the service, which didn’t stop attackers from continuing to actively use it.
