Wallet of Satoshi, a leading provider of Bitcoin Lightning wallets, has announced its withdrawal from the US market. This move entails removing its application from both the Apple and Google app stores in the United States, marking a notable shift in the company’s operational focus.
This decision, while abrupt, was communicated with an assurance to existing US customers about the safety and accessibility of their funds.
Wallet of Satoshi emphasized that users could transfer their holdings to alternative wallet services, ensuring no disruption to their digital assets. Despite this assurance, the company’s sudden exit raises questions about the underlying factors prompting such a move.
Regulatory Speculations And Industry Reactions
Speculations abound regarding the reasons behind Wallet of Satoshi’s decision. Industry observers have pointed to the increasingly complex crypto regulatory environment in the US as a potential factor.
This conjecture gains weight considering the recent legal challenges faced by major industry players like Binance and its former CEO, Changpeng Zhao. These incidents have highlighted the growing scrutiny and regulatory demands within the US crypto space.
Responding to the development, John Carvalho, Chief Executive Officer of Bitcoin software developer Synonym, suggested that compliance with local regulations might be a “challenge too steep” for Wallet of Satoshi.
Carvalho inferred that the decision to exit the US market could be due to the company’s “inability” or “unwillingness” to adapt to these regulatory demands.
To everyone in the replies asking “why?” you should be able to figure it out.
WoS needs to comply with local regulations or laws in ways that it cannot, or does not want to.
— John Carvalho (@BitcoinErrorLog) November 24, 2023
The Path Forward For The Bitcoin Wallet Firm
Despite its withdrawal from one of the world’s largest markets, Wallet of Satoshi remains a crucial player in the Bitcoin Lightning Network ecosystem. The app has been known for processing a significant volume of Lightning Network payments, with projections to hit over one million transactions in November alone.
Wallet of Satoshi is on pace to process over 1.1 million Lightning payments in November.
This will be their largest month of Lightning payments ever.
— Kevin Rooke (@kerooke) November 22, 2023
Critiques of the Wallet of Satoshi have often centered on the custodial nature of its application. Unlike non-custodial solutions that offer users full control over their funds, Wallet of Satoshi’s app maintains control over user assets.
This aspect has been a contention, particularly among advocates for greater user autonomy in managing digital currencies. The firm, however, holds a positive outlook toward the US market.
In its statement, Wallet of Satoshi expressed hope for future developments that might enable the company to resume its services in the United States. The firm noted:
We understand this may be disappointing news and we share your frustration. We’re hopeful that future developments will allow us to revisit and possibly resume our operations in the U.S.
This optimism suggests a potential return should the regulatory landscape evolve to accommodate the operational model of Wallet of Satoshi and similar crypto services.
Featured image from iStock, Chart from TradingView