Bitcoin Users Decry Wallet of Satoshi’s Withdrawal From US

Wallet of Satoshi retreats from the US market, stirring speculation that the decision was driven by regulatory pressure.

Satoshi staring at the USA from space, looking sad and disappointed.
Created by Gabor Kovacs from DailyCoin
  • Wallet of Satoshi announced leaving the US market.
  • No specific reason for the US withdrawal was given by the team.
  • Speculation is mounting that the company faced regulatory pressures.

Cryptocurrency users often prioritize self-custody as a key component of their investing strategy. Self-custody enables ownership of digital assets by “storing” them in a wallet controlled by the user alone, ensuring unrestrained access and secure long-term storage. 

The crypto community was left reeling on November 24 when the self-custody Bitcoin Lightning app Wallet of Satoshi announced its withdrawal from the US market. This sudden retreat has raised troubling questions about intensifying regulatory pressures behind the scenes, particularly considering the recent punishment dished out on Binance by the US Department of Justice.

Bitcoin Lightning Wallet Departs From US

Wallet of Satoshi announced its retreat from the US market without citing any specific reasons that prompted the decision. However, given the spate of recent enforcement actions on crypto firms in the U.S., some community members speculated that US authorities may have been in contact with the self-custody provider.

“We've made the difficult decision to remove our app from the U.S. Apple and Google app stores, and will not serve U.S. customers going forward,” wrote Wallet of Satoshi.

Wallet of Satoshi stated that the decision to withdraw was not taken lightly while reiterating its “commitment to providing a secure, user-friendly, and compliant platform globally.” In a further hint of facing regulatory pressure, the post mentioned that “future developments” may eventually allow for a resumption of US operations at a later date.

The Wallet of Satoshi team stated that funds remain safe, but advised US users holding Bitcoin on the platform to transfer to another wallet. 

With more jurisdictions implementing the Financial Action Task Force’s (FATF) Travel Rule, speculation is mounting that Wallet of Satoshi likely faced intense pressure to retool its platform for compliance and participate in user surveillance.

Regulators Scrutinize Self-Custody

At the heart of tightening regulatory scrutiny lies the enforcement of FATF’s Travel Rule, which stipulates that crypto service providers must collect and disclose the sender and recipient details of cryptocurrency transfers to comply with money laundering and terrorist financing requirements.

Some community members label these demands an infringement of financial privacy, which is becoming increasingly recognized by pro-crypto lawmakers. US Senator Ted Budd recently proposed a bill prohibiting federal agencies from interfering with an individual’s choice to use self-custody wallet solutions. 

On the Flipside

  • US authorities generally deem Bitcoin as compliant, making the U.S. withdrawal of Wallet of Satoshi, a Bitcoin-only product, somewhat unexpected.  
  • While regulators aim to protect investors, they may miss nuances of how crypto fundamentally differs from traditional finance.
  • Founder of Custodia Bank Caitlin Long argued that the U.S. authorities’ anti-crypto sentiment is motivated by the push to roll out a central bank digital currency.

Why This Matters

As self-custody options dwindle for US crypto users, America’s role as a hub for blockchain innovation and thriving digital asset community hangs in the balance.

Discover the best crypto wallet solutions for your needs here:
Best Crypto Wallets 2023: Where Should I Store Cryptocurrency?

Learn more about Samson Mow’s call for a $1 million Bitcoin here:
Here’s How Bitcoin Gets to $1M According to Samson Mow

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Samuel Wan

Samuel Wan is a finance professional turned crypto journalist, known for his insightful reporting on market trends, regulatory changes, and technological developments within the digital asset industry. His ability to simplify complex concepts and report the facts has made him a trusted source in the crypto community. Beyond his writing, Samuel is an active mountain biker and gamer.