Fear of Prosecution Fuels US Privacy Wallet Exodus
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The developers of Phoenix Wallet have announced the app’s removal from the US, mirroring Wasabi Wallet’s recent move
These actions follow US government crackdowns on Tornado Cash and Samourai Wallet
The restriction indicates developers’ fear of facing similar consequences, suggesting that government actions are achieving their objectives
The developers of Phonenix Wallet recently announced that its app will be pulled from the US following similar actions from the makers of the Wasabi Wallet. The twin moves are likely a result of the actions taken by the US government against the likes of Tornado Cash and, more recently, Samouri Wallet. The restriction of the apps to US users shows that authorities’ actions are having the desired effect, with developers fearful of similar actions against them.
Phoenix and Wasabi Leave US
Phoenix Wallet announced its decision to restrict access to US users on April 26, telling its followers on X what they should do but not giving an explanation of why it was pulling out. However, Phoenix Wallet owner Acinq did expand on the reasons for excluding US users, citing “Recent announcements from US authorities”:
Recent announcements from US authorities cast a doubt on whether self-custodial wallet providers, Lightning service providers, or even Lightning nodes could be considered Money Services Businesses and be regulated as such.
— ACINQ (@acinq_co) April 26, 2024
This was a clear reference to the arrest of the co-founders of Tornado Cash and, more recently, Samourai Wallet, with developers realizing they can, and will, be held responsible for the writing code that allows users to conduct their business in private.
The following day, Wasabi Wallet, which uses the CoinJoin mixing protocol, took the same decision, again blaming “recent announcements by U.S. authorities”:
Link to blog post announcement https://t.co/vaQ50eXpj1
— Wasabi Wallet (@wasabiwallet) April 27, 2024
Government Tactics Working
It’s clear that the actions of US authorities have unnerved developers of privacy wallets, and the government will be delighted that their action are having the effect they anticipated. On the other side of the debate, privacy advocates are concerned about the erosion of financial privacy rights, arguing that targeting developers sets a worrying precedent, as it suggests a crackdown on tools designed to enhance privacy in financial transactions.
As well as impinging on their right to privacy, opponents argue that such actions may deter innovation in the field of privacy-focused technologies and could potentially stifle efforts to provide individuals with greater control over their financial data.
Fears are also accelerating over broader attempts by authorities to monitor and regulate cryptocurrency usage, undermining the principles of decentralization and anonymity that many in the crypto community value.
The post Fear of Prosecution Fuels US Privacy Wallet Exodus appeared first on FullyCrypto.
Filed under: Bitcoin - @ April 30, 2024 8:16 am