Phoenix Wallet, a prominent Bitcoin wallet tailored for Lightning Network transactions, has made the decision to delist itself from US app stores. The company has advised its US-based users to withdraw their funds from the wallet.
This move by Phoenix Wallet comes in response to recent statements from US officials raising uncertainties about the regulatory standing of self-custody wallet providers, Lightning service providers, and even Lightning nodes. ACINQ, the entity behind Phoenix Wallet, has voiced concerns that these entities could potentially be classified as Money Services Businesses and subjected to regulatory oversight.
Phoenix Wallet has provided guidance for users to empty their wallets. For Android users, they are advised to navigate to Settings and select ‘Turn off channels’. iOS users, on the other hand, can find the ‘Empty wallet’ option in Settings. The company has cautioned against hasty closures of channels, as this could result in significant on-chain fees.
This development coincides with the recent arrest of the founders of Samourai Wallet, a Bitcoin mixing wallet, who were indicted in the Southern District of New York for allegedly facilitating illicit transactions, including money laundering.
In light of these developments, the Federal Bureau of Investigation (FBI) has issued a warning to users regarding its ongoing crackdown on various unregistered cryptocurrencies suspected of operating as money services businesses. The FBI has alerted users to the possibility of experiencing financial disruptions as a consequence of these enforcement actions.
This is not investment advice.
