ZKSNACKS Bans US Customers Over “Regulation Concerns”
Highlights
- Crypto wallet zkSNACKs is exiting the US
- The protocol said all US users will now be blocked
- Phoenix Wallet also unveiled its exit recently
Some regulatory concerns have compelled zkSNACKs to restrict United States customers’ access to its platform.
Samourai Wallet Crackdown Possibly Triggered zkSNACKs
zkSNACKs, the company behind the privacy-boosting Bitcoin wallet Wasabi Wallet, started blocking residents and citizens of the U.S. from accessing its platforms.
This group of people cannot visit zkSNACKs website to download and use Wasabi Wallet and any related products and services, including APIs and RPC interfaces. To achieve this, the platform introduced an IP address firewall.
The developer did not explicitly explain the policy change and withdrawal but it is perceived to be linked with the arrest of two of Samourai’s founders.
The U.S. Department of Justice (DOJ) charged Samourai Wallet founders Keonne Rodriguez and William Lonergan Hill with laundering $100 million via their crypto mixing service. Based on the enforcement actions levied against the duo, the conspiracy to commit money laundering charge carries a possible maximum sentence of 20 years in prison, and the charge of operating an unlicensed money transmitting business carries up to five years.
Samourai Wallet is believed to be a Bitcoin (BTC) wallet that provides improved privacy for cryptocurrency transactions. However, the regulator is of the opinion that the service was a cover-up for an elaborate system of large scale money laundering. So far, approximately 80,000 BTC has passed through Whirlpool and Ricochet, two Samourai services, amassing fees totaling approximately $4.5 million.
More Crypto Projects Go Under the Bus
Similarly, founders of popular cryptocurrency mixer Tornado Cash founders, who were accused of being actively involved in the illegal operation of the platform, were also arrested. These crypto players argued against the charge and requested a motion seeking the dismissal of charges levied against them.
The DOJ has responded to the MTD request but it was not what Semenov, one of the Tornado Cash co-founders, expected. The regulator noted that the Tornado Cash co-founder has to answer to the alleged crimes levied before him, especially because Semenov played an active role in maintaining Tornado Cash’s website for continuity.
He was also accused of keeping the cryptocurrency mixer online and helping criminals maintain anonymity on the platform. It is worth acknowledging that these sort of regulatory actions are becoming more rampant amongst crypto projects.
The voluntary exit of zkSNACKs might be the Wasabi’s approach to shield itself from potential future prosecution.
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