US Users Restricted From Wasabi Wallet Amid Rising Regulatory Scrutiny

Table of Contents

• Developer Decision: Blocking US Users
• Reason Behind Decision: Samourai Wallet Controversy
• Wider Implications: Tornado Cash and Regulatory Uncertainty
• zkSNACKs' Response and Commentary

In response to recent developments and regulatory uncertainties in the United States, zkSNACKs has blocked U.S. users from accessing Wasabi Wallet and related services. 

Developer Decision: Blocking US Users

zkSNACKs, the developer behind the renowned open-source Bitcoin wallet, Wasabi Wallet, has decided to block users from the United States from accessing its services. This decision extends to both U.S. residents and citizens residing abroad. 

The company announced via a blog post that users from the U.S. and related territories can no longer access the Wasabi Wallet website. An IP address firewall has been implemented to ensure that U.S.-based users cannot access any associated websites, download Wasabi Wallet, or use related products and services, including APIs and RPC interfaces.

Reason Behind Decision: Samourai Wallet Controversy

The team alluded to the recent Samourai Wallet controversy as a reason behind its decision. In its announcement, it mentioned, 

“In light of recent announcements by U.S. authorities, zkSNACKs is now strictly prohibiting U.S. users from using its services.”

The “recent announcements” allude to incidents involving other privacy-focused wallet providers. Notably, the founders of Samourai Wallet, a Bitcoin wallet similar to Wasabi Wallet, were arrested and charged with money laundering. The U.S. Department of Justice (DOJ) accused them of operating a cryptocurrency mixing service, alleging that it was used for money laundering purposes.

Wider Implications: Tornado Cash and Regulatory Uncertainty

This incident follows the arrest of Roman Storm and Roman Semenov, cofounders of Tornado Cash, a mixing protocol on the Ethereum blockchain. The DOJ accused them of facilitating over $1 billion in money laundering, including for entities like North Korea’s Lazarus Group. 

These arrests have sparked debates about the legality and responsibilities of developers of privacy-enhancing tools. DOJ prosecutors claim that profiting from criminals' use of a mixing service constitutes grounds for a money laundering charge, while industry advocacy groups have defended open-source developers' free speech rights.

zkSNACKs' Response and Commentary

A spokesperson from zkSNACKs commented on the situation, expressing concerns about the regulatory uncertainty surrounding self-custodial wallets like Wasabi Wallet.

They said, 

"In light of the recent announcements from U.S. authorities, uncertainty lies on whether self-custodial wallets such as Wasabi Wallet could be considered money transmitters. Although we believe that Wasabi Wallet is complying with current legislations and regulations, zkSNACKs is taking a conservative approach and decided to not be exposed to the regulatory uncertainty of the U.S." 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.