The cryptocurrency community is grappling with the implications of a recent decision by zkSNACKs, the developer of the privacy-focused Wasabi Wallet, to block U.S. citizens and residents from accessing its services.
This move comes in the wake of increased scrutiny from U.S. authorities on privacy-focused crypto services, as evidenced by the arrests of the founders of Samourai Wallet and the prosecution of Tornado Cash developers.
TLDR
- zkSNACKs, the developer of the privacy-focused Wasabi Wallet, has blocked U.S. citizens and residents from accessing its services, including its websites and APIs.
- The decision is likely a response to the recent arrests of the founders of Samourai Wallet and the prosecution of Tornado Cash developers by U.S. authorities.
- zkSNACKs cited “recent announcements by U.S. authorities” as the reason behind the ban, joining other crypto platforms like Phoenix Wallet in adjusting their services due to increased regulatory scrutiny.
- The move highlights the growing tension between privacy-focused crypto services and U.S. regulators, who view some of these services as facilitating illegal activities.
- The ban has sparked controversy within the crypto community, with some advocating for privacy rights in the context of Bitcoin’s principles.
According to the announcement made by zkSNACKs, the ban applies to all U.S. citizens and residents, including those with permanent residency or a U.S. passport.
The ban took effect immediately, preventing U.S. users from visiting websites like wasabiwallet.io, api.wasabiwallet.io, and zksnacks.com, as well as downloading or using the Wasabi Wallet and related services like APIs and RPC interfaces.
The developer cited “recent announcements by U.S. authorities” as the reason behind this decision, a move that aligns with other crypto platforms adjusting their services due to increased regulatory scrutiny.
Phoenix Wallet, for instance, announced that it would cease operations for U.S. residents starting May 3, removing its app from U.S. app stores.
The zkSNACKs coordinator is now blocking U.S. residents and citizens from using its coinjoin service.
— Wasabi Wallet (@wasabiwallet) April 27, 2024
ACINQ, the company behind Phoenix Wallet, advised its U.S. users to withdraw funds promptly but cautioned against force-closing wallets to avoid higher fees.
The recent crackdown by U.S. authorities on privacy-focused crypto services stems from concerns that these services may facilitate illegal activities, such as money laundering and sanctions evasion.
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
Last week, federal prosecutors in New York indicted the founders of Samourai Wallet, alleging their involvement in illegal transactions totaling over $2 billion.
The charges carry severe penalties, highlighting a broader crackdown by U.S. authorities on crypto wallets and mixers involved in activities deemed questionable.
While the U.S. government’s stance is rooted in legitimate concerns about financial crimes, the move has sparked controversy within the crypto community, with some advocating for privacy rights in the context of Bitcoin’s principles.
Proponents of privacy-focused crypto services argue that these tools are essential for preserving financial privacy and protecting users from potential surveillance and censorship.
However, critics contend that these services can be exploited by bad actors for nefarious purposes, and that increased regulation is necessary to prevent the misuse of these tools.
The challenge lies in striking a balance between protecting user privacy and preventing the facilitation of illegal activities.
As the debate continues, the decision by zkSNACKs and other crypto platforms to block U.S. users underscores the growing tension between privacy-focused crypto services and U.S. regulators.
While these platforms may be acting out of an abundance of caution, the move raises questions about the future of financial privacy and the role of decentralized technologies in a increasingly regulated environment.
