Sec News Popular Bitcoin wallet bans United States citizens from its service

The Wasabi Wallet provider, zkSNACKs, announced it now prohibits U.S. citizens and residents from using its services. This decision came to light on April 27 amid a United States regulatory and enforcement crackdown on Bitcoin (BTC) wallets.

Notably, Wasabi Wallet is one of the most popular Bitcoin wallets focused on privacy solutions.

As announced, zkSNACKs has started “blocking U.S. citizens and residents from visiting its websites, downloading and using Wasabi Wallet, and any related products and services, including APIs and RPC interfaces.”

The prohibition extends to anyone with a United States passport or IP address.

“In light of recent announcements by U.S. authorities, zkSNACKs is now strictly prohibiting U.S. users from using its services. An IP address blocking for U.S. residents is effective on wasabiwallet.io, api.wasabiwallet.io, and zksnacks.com.

‘U.S.’ refers to ‘United States’ and includes the several states of the United States and related territories. If you are a United States Citizen or United States Resident, you are not allowed to visit any sites aforementioned, download Wasabi Wallet or use the Wasabi Wallet coinjoin feature. This includes if you are a U.S. permanent resident or if you are an individual that holds a U.S. passport.”

Wasabi Wallet

United States war on privacy and Bitcoin wallets

On April 24, the Federal Bureau of Investigations (FBI) seized Samourai Wallet’s website and arrested its developers. This is another privacy-focused Bitcoin wallet, a direct competitor to the zkSNACKs flagship product.

Moreover, the FBI issued a warning against what it called “cryptocurrency money transmitter businesses” a day later.

The surprising enforcement action against Samourai, followed by the warning and further court decisions related to Tornado Cash, suddenly raised doubts about what is considered a “money transmitter business,” threatening Bitcoin and cryptocurrency wallets amid regulatory uncertainty.

As a result, ACINQ—a Lightning Network service provider and developer of Phoenix Wallet, another Bitcoin wallet—announced its departure from the United States on April 26. Wasabi Wallet communicated its decision to prohibit and block U.S. citizens and residents right after.

In closing, recent law enforcement has brought regulatory uncertainties to Bitcoin wallet and privacy service providers in the United States. This has caused some companies to leave the country or block its citizens and residents from using their services, potentially affecting the long-term demand for Bitcoin in the U.S.