Phoenix Wallet pulls the emergency brake!

The wallet disaster in the USA continues! Acinq, the provider of the popular non-custodial lightning wallet "Phoenix", has announced that it will discontinue its service in the US. This decision follows recent measures taken by American authorities and the arrest of the two founders of the privacy-focused "Samourai Wallet" - Blocktrainer.de reported.

In view of the currently unclear regulations and the restrictive approach of US government officials, the company is apparently preferring to pull the emergency brake before it could find itself in a similar situation.

Recent announcements by US authorities raise doubts as to whether providers of self-managed wallets, Lightning service providers or even Lightning nodes could be considered money service businesses and regulated as such. [...] We are now removing @PhoenixWallet from the US app stores and will review further potential impacts on our operations.
_{Acinq, Phoenix Wallet}

Acinq's withdrawal is a reaction to the massive repression of financial privacy and the crackdown on service providers in the crypto sector.

The decision has caused quite a stir in the Bitcoin community. Some prominent figures, such as Jack Dorsey, the founder of Twitter, have also expressed their concern and incomprehension about the move. Dorsey explained that the withdrawal from the USA "feels completely unnecessary" to him. Meanwhile, some other members of the community were more understanding.

Yikes!

In my opinion, Phoenix Wallet is perhaps a little too overcautious. I don't think they are acting illegally, or that the case of "Samourai Wallet" suggests this.

But I do understand the discomfort of operating in the US, it's better to be safe than sorry when the risks are so high
_{Pledditor at 𝕏}

It is still not clear whether non-custodial Lightning service providers such as Acinq or the Phoenix wallet are actually considered "money transmitters" and require a corresponding license. Insofar as there is uncertainty regarding the regulatory status, the Phoenix developers' "better safe than sorry" approach is perfectly understandable, even if it may seem exaggerated at first glance. In contrast, the creators of the competing ZEUS wallet have decided to continue operations. "We're not going anywhere" announced those responsible on their 𝕏 account.

We believe that ZEUS is currently complying with the letter of the law. Should the law change or a ruling be issued, we will make the appropriate adjustments.

If ZEUS falls, all other lightning node operators will be next.

If the lightning node operators fall, self-custody is next.

That's the hill to die on: self-custody.

If you disagree, you were never in Bitcoin for the right reasons.

So get behind us, or go home.

Future generations are watching and depending on us.

Keep moving forward.
_{Evan Kaloudis, Founder of ZEUS}

Of course, there is no precise answer as to which of the two is the right way to go, as it also depends on the perspective from which you view the respective approach. From the perspective of a Bitcoin enthusiast and user of such a service, one is naturally more on the side of ZEUS. However, if you put yourself in the shoes of those responsible, who are facing potentially dire consequences, your opinion may change somewhat. Quite apart from that, it is a bitter loss for the US community and we can only hope that the European authorities will take a less restrictive and more communicative approach and that Phoenix can continue to offer its service in this country.

It is a shame that such regulations make self-custody more difficult, that people are placed under general suspicion and that companies stop legal business activities that have helped many people out of fear.

I hope that we will see a fair and differentiated discourse on the recent events in society.
_{Roman Reher, founder of Blocktrainer.de}