Acinq said on Friday, April 26, that starting on May 3, 2024, users of its Lightning Network bitcoin wallet, Phoenix, will no longer be able to access it. This announcement came soon after the Samourai Wallet indictment and what appears to be a concerted campaign by the US government to undermine non-custodial alternatives and financial privacy.
Phoenix Wallet, a Lightning Network platform, will no longer be available in American app stores in May.
On April 26, Acinq’s Phoenix Wallet said that it “will be removed from U.S. app stores” at 11:19 a.m. Eastern Time. Users in the United States were instructed to withdraw their funds, even though the reasons for this decision were not made public. To “close channels,” Android users must navigate to their settings; iOS users, on the other hand, must choose “drain wallet” under their settings. Phoenix Wallet’s parent firm, Acinq, is also in charge of overseeing the second-biggest Lightning Network node, with a capacity of 480.38 BTC spread across 2,007 channels, worth at roughly $30.68 million.
Following the most recent Samourai Wallet indictment, the news was released. There was also a great deal of discontent with Phoenix’s decision. On the X platform, researcher Alex Thorn of Galaxy Digital bemoaned, “Man, it would be great if the U.S. was still the land of the free.” Bitcoin supporter Mandrik added, “This week keeps getting worse.” to the sentiment. Block creator Jack Dorsey expressed his views via X, formerly known as Twitter, his former firm. Dorsey penned:
Seems wholly superfluous.
A significant number of people responded to Dorsey’s article. Elizabeth Stark, the CEO and co-founder of Lightning Labs, agreed with Dorsey, saying, “Agreed.” She made the remark, “This is not the way.” Jack Mallers, the founder and CEO of Strike, expressed concerns about the decision in a similar manner. Has [Phoenix Wallet] been contacted by anyone? Why was this choice made? Mallers asked questions about Dorsey’s X post. Acinq shared the information on social media in addition to Phoenix’s X post.
It’s unclear from recent statements made by US authorities whether self-custodial wallet providers, Lightning service providers, or even Lightning nodes qualify as Money Services Businesses and should be subject to regulations as such, according to Acinq. “We will be evaluating additional potential impacts to our operations in addition to removing Phoenix Wallet from US app stores.” The French startup’s remark was also criticized.
One X user commented on Acinq’s post, saying, “This is exactly [what] they wanted you to do, when they indicted Samourai.”
Zeus, a provider of Bitcoin Lightning Network wallets, declared on X that it will not imitate firms such as Acinq. “We have no intention of leaving,” the Zeus account declared. Evan Kaloudis, the creator of Zeus, wrote in another X post:
Right now, we think Zeus is abiding by the letter of the law. We shall amend in accordance with any changes in the legislation or any rulings. The operators of the other Lightning nodes will fall next if Zeus falls. Self-custody comes next in case operators of Lightning nodes fail. Self-custody is the big one to die for. You were never invested in Bitcoin for the proper reasons if you don’t agree. Go home or get behind us, then. We have the future generations watching and relying on us.
How do you feel about Phoenix’s decision to cease operations within the United States? Please feel free to discuss this topic in the comments area below.