The recent announcement by Wallet of Satoshi (WoS) to withdraw its app from the U.S. Apple and Google app stores and cease serving U.S. customers marks a significant shift in the Bitcoin wallet landscape. This decision reflects the increasingly challenging regulatory environment in the United States, which has affected not only WoS but other crypto service providers as well.
In a similar vein, GameStop, known for its video game retailing, terminated its crypto wallet service due to the uncertain regulatory climate in the U.S. Launched just a year prior, this service was integrated with Ethereum’s layer-2 scaling protocol and allowed users to hold, trade crypto, and access decentralized apps. However, unspecified regulatory uncertainties, likely related to the intensified scrutiny by U.S. authorities like the SEC and the Commodity Futures Trading Commission, led to its discontinuation.
Regulatory Pressures on Crypto
The U.S. federal government has been contemplating enforcing know-your-customer (KYC) rules on unhosted or self-hosted crypto wallets. This controversial proposal by the Financial Crimes Enforcement Network (FinCEN) requires crypto exchanges to collect detailed personal information for transactions involving private wallets. The crypto industry expressed concerns over the feasibility and burden of these rules, given the nature of certain wallets and individual privacy considerations.
Binance, the world’s largest cryptocurrency exchange, also faced regulatory hurdles. The SEC sued Binance and its U.S. operator for several allegations, including artificially inflating trading volumes and mismanaging customer funds. To ensure U.S. customer assets remain within the country, Binance.US reached an agreement with the SEC, restricting access to these assets to Binance.US employees only. This agreement is part of broader regulatory crackdown efforts in the U.S. crypto industry.