On Friday, April 26, Acinq announced that its Lightning Network bitcoin wallet, Phoenix, will cease services for U.S. residents from May 3, 2024. This announcement followed closely on the heels of the Samourai Wallet indictment and what is perceived as a targeted U.S. government effort against financial privacy and non-custodial solutions.
Acinq to Withdraw Phoenix Wallet From US Markets Amid Regulatory Concerns
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Lightning Network Platform Phoenix Wallet Will Be Removed From U.S. App Stores in May
At 11:19 a.m. Eastern Time on April 26, Acinq’s Phoenix Wallet indicated it “will be removed from U.S. app stores.” Although the reasons for this decision were not disclosed, U.S. users were advised to withdraw their funds. For Android users, this involves navigating to settings to “close channels,” whereas iOS users should select “drain wallet” under their settings. Acinq, the parent company behind Phoenix Wallet, also manages the second-largest Lightning Network node, which boasts a capacity of 480.38 BTC valued at approximately $30.68 million across 2,007 channels.
The news comes off the heels of the latest Samourai Wallet indictment. The decision by Phoenix was further met with considerable dissatisfaction. Alex Thorn, a researcher at Galaxy Digital, lamented on the X platform, “Man, it would be great if the U.S. was still the land of the free.” Adding to the sentiment, bitcoin advocate Mandrik commented, “This week keeps getting worse.” Block founder Jack Dorsey used X, previously his old company known as Twitter, to also voice his opinion. Dorsey wrote:
Feels completely unnecessary.
Dorsey’s post drew a notable volume of responses. Lightning Labs co-founder and CEO Elizabeth Stark concurred with Dorsey, stating, “Agreed. This is not the way,” in her comment. Similarly, Strike’s CEO and founder, Jack Mallers, raised questions about the move. “Has anyone talked to [Phoenix Wallet]? Why was this decision made?” Mallers inquired on Dorsey’s X thread. Alongside Phoenix’s X post, Acinq also disseminated the news through the social media platform.
“Recent announcements from U.S. 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 said. “We are removing Phoenix Wallet from US app stores and will be assessing other potential impacts to our operations.” This statement from the French startup also faced criticism.
“This is exactly [what] they wanted you to do, when they indicted Samourai,” one X user replied to Acinq’s post.
Bitcoin Lightning Network wallet provider Zeus announced on X that it would not emulate startups like Acinq. “We’re not going anywhere,” the Zeus account said. In another X post, the founder of Zeus, Evan Kaloudis, wrote:
We believe that Zeus is following the letter of the law right now. If the law changes or any judgments are made, we will make adjustments accordingly. If Zeus falls, all other Lightning node operators are next. If Lightning node operators fall, self-custody is next. This is the hill to die on: self-custody. If you don’t agree, you were never in Bitcoin for the right reasons. So get behind us, or go home. Future generations are watching and depending on us.
What do you think about Phoenix deciding to stop operating in the U.S.? Share your thoughts and opinions about this subject in the comments section below.
