Phoenix and Wasabi Exit US Market Amid Self-Custody Wallet Crackdown: Regulatory Concerns Drive Major Crypto Wallet Providers to Discontinue Services

Phoenix Wallet and Wasabi Wallet, two prominent self-custodial cryptocurrency wallet providers, are discontinuing services for customers in the United States following recent regulatory actions against Metamask creator Consensys and crypto mixer Samourai Wallet. Concerns have arisen among providers like Acinq and zkSNACKs about the classification of self-custodial wallet providers as legitimate money service businesses in the wake of these crackdowns. Acinq's Phoenix Wallet users have until May 2 to adjust to the changes, while Wasabi Wallet's new policy is effective immediately. Regulators worldwide have raised concerns about the potential for self-custody wallets to facilitate illicit activities like money laundering. In the United States, Consensys received a Wells notice from the SEC regarding potential enforcement actions related to its MetaMask products, while the co-founders of Samourai Wallet face charges of money laundering. European regulators, however, have recently relaxed proposed regulations concerning self-custody wallets, with the European Parliament scrapping a 1,000 euro limit on crypto payments from such wallets.