Phoenix Wallet, a major Bitcoin wallet designed for Lightning Network payments, has announced that it will be removed from US app stores. The company advised its US-based users to empty their wallets.
Phoenix Wallet's decision follows recent statements from US officials casting doubt on the regulatory status of self-custody wallet providers, Lightning service providers, and even Lightning nodes. ACINQ, the company behind Phoenix Wallet, has expressed concerns that these organizations could be considered Money Services Businesses and regulated as such.
Phoenix Wallet provided instructions for users to empty their wallets. For Android users, they should go to Settings and select 'Turn off channels'. For iOS users, the option is 'Empty wallet' under Settings. The company noted that caution should be exercised against forced closures of channels due to the potential for significant on-chain fees.
This development comes on the heels of the arrest of the founders of Samourai Wallet, a Bitcoin mixing wallet. They were indicted in the Southern District of New York for allegedly facilitating illegal transactions, including laundered funds.
The Federal Bureau of Investigation (FBI) has issued a warning to users regarding its ongoing operations against various unregistered cryptocurrencies believed to be operating as money services businesses. The FBI warned users that they may experience financial disruptions as a result.
*This is not investment advice.