Why is United States going against custodial lightning wallets?

[Oshosondy]

The united states have done nothing against Phoenix or ACINQ!
They haven't taken anything down, you can see that even their LN channels are still working in the US being hosted in the US.
https://mempool.space/lightning/node/03864ef025fde8fb587d989186ce6a4a186895ee44a926bfc370e2c366597a3f8f

Phoenix is still providing services to US customers. The lightning wallet provider will cease to provide services to US people on May 3.

[stompix]

The lightning wallet provider will cease to provide services to US people on May 3.

How?
What would stop a US citizen to go here:
https://github.com/ACINQ/phoenix/releases
download the apk and run it?

[Oshosondy]

How?
What would stop a US citizen to go here:
https://github.com/ACINQ/phoenix/releases
download the apk and run it?

This is true. Because an app is removed from those app stores, that does not mean they have stopped operation. Which means those that have the app already can still continue to use it, while those that still want to use it can download it from their GitHub through the link you give. It is not as centralized as I thought, it is better to have the apk on GitHub.

But there are some people that will not know this but be afraid of their bitcoin not to get lost. Many of them will not know about Phoenix on GitHub. This may likely reduce United States Phoenix wallet users.

[logfiles]

The lightning wallet provider will cease to provide services to US people on May 3.

How?
What would stop a US citizen to go here:
https://github.com/ACINQ/phoenix/releases
download the apk and run it?

Perhaps they will go after the GitHub profile with its repositories as well and have it banned, like they did with Tornado Cash. Those GitHub chaps are cowards too, if that's the correct wording. Maybe they could host the files on decentralized alternative platforms to GitHub, but it will certainly reduce their popularity by miles.

[The Cryptovator]

How can the US  support something that they can't monitor at least? They can't control Bitcoin, but they can monitor when Bitcoin transactions are made on the blockchain. They hate mixers too because they can't trace Bitcoin perfectly. So they blamed them for money laundering and started attacking them. Since they can't monitor data on the blockchain about Lightning wallet transactions and their custodial means, funds are ultimately mixing together as well. Most probably, that's the reason the US is against the lightning network. I am not sure if there is any other secret mission behind it. 

[franky1]

No reason also stated for removing the lightning wallet from the Google Playstore and App store for United States citizens not to be able to access it.

ACINQ, owners of Phoenix have explained that themselves:

Recent announcements from US authorities cast a doubt on whether self-custodial wallet providers, Lightning service providers, or even Lightning nodes could be considered Money Services Businesses and be regulated as such.

ACINQ has no MSB license, if the government identifies them as MSB they don't want to risk operating without one, so they are pulling out before they acquire one!

its not so much about the custody. regulators do treat 'services that facilitate the movement of funds on behalf of others for a fee' as a MSB. in short LN routing requires a MSB licence to perform LN routing

the method LN makes payments over a network via using partners liquidity in a pass-the-parcel IOU game in LN, is different to how bitcoin relays unconfirmed transactions on the bitcoin network.. this difference is and will cause headaches for LN users wanting to move funds(route) for a fee

its not just certain wallets but the whole method the LN system operates
the only way LN can succeed even as a niche sub service, is if people self custody lock their bitcoin value on the bitcoin network. and then set up a channel referencing such lock, where the channel is direct to intended destination for their payments.. to not need to utilise the 'gossip' routing table data(avoid middlemen(avoid routing) unless they want to pay higher admin fee)
in short: routing will add costs to LN fee making it expensive to route due to fee's needed to cover MSB regulated admin costs of a service offering routing.

this means people using LN will end up having to pre-plan months of potential spends to set up many channels direct with their favoured services using multiple channels...
in short they might aswell just set up multisigs with intended recipients on the bitcoin network and use a new private communication method to RBF unconfirmed transactions (emphasis privately) between each other(update states).. and just broadcast final settlements when one side of the multisigs funds are depleted thus need to settle to finalise the funds owed

[stompix]

The lightning wallet provider will cease to provide services to US people on May 3.

How?
What would stop a US citizen to go here:
https://github.com/ACINQ/phoenix/releases
download the apk and run it?

Perhaps they will go after the GitHub profile with its repositories as well and have it banned, like they did with Tornado Cash. Those GitHub chaps are cowards too, if that's the correct wording. Maybe they could host the files on decentralized alternative platforms to GitHub, but it will certainly reduce their popularity by miles.

You do understand that nobody is going right now after Phoenix/ACINQ, right?
Nobody asked them to remove the apps from the store, nobody has issued a warning to ACINQ, nobody but themselves has taken a decision, and that was to protect in case of ...whatever! No US agency has gone after a LN wallet, yet!

This whole thing is just for their own company protection, any US citizen could easily use their service, they just want to claim they have done everything possible to restrict them, but overall nothing has changed.
Just as you can't stop anyone from still using Tornado ACINQ can't stop a US citizen from routing payments through their nodes.

[cryptoaddictchie]

I guess these lightning wallets are targeted one after the other but we do not know the reason. Is it because Chainanalysis were unable to trace the lightning transactions or the wallet developers are not cooperating with the United States to make lightning transactions on their channels less private?

Im not sure if this was related issue but today trustwallet has been removed too on Google. News circulate on social media that the big project Truswallet was taken down on Google. Too many wallets has been flagged lately. Was US that scared of crypto?

[Casdinyard]

Their goal is to crush Bitcoin and bring it to their feet. The attack is both external and internal. And trust me they won't stop until their aim of regulating Bitcoin is achieved. By the way if these apps aren't available on the play store and app store for US citizens isn't it going to be available on the official websites of software?

I guess I am behind on the Chainanalysis news. Kindly reply this with the link so I can get properly informed on it. Thanks.

Not sure if that is the idea since if that was the case they could just ban bitcoin outright and make all of the banks and large-scale investment firms pull out on their ETFs, way easier that way than actually banning self-custodial wallets. And as much as I hate to say it I think the intent of the US here is to crackdown on hackers who may have used these types of wallets to keep their stolen crypto like a dragon inside a tower keeping their treasures for themselves lol.

I could be wrong about this idea though, but honestly this is just what makes the most sense to me at this point. In the Philippines even exchanges such as Binance are getting the ban hammer and are being pulled out of the App Store and Google Play Store so Filipinos wouldn't be able to access them, they say it's to stop people from getting their dirty paws on these types of exchanges and risking getting hacked and scammed, but frankly enough I think it's just because they can't find a way to profit off of crypto so they are banning it before it becomes an even bigger financial and legal threat.

[KiaKia]

Some weeks back or probably some months back, wallet of Satoshi was removed from Google Playstore and App store for United States citizens not to be able to access it. No reason stated.

It is now Phoenix wallet which is one of the best custodial lightning wallets for bitcoin. No reason also stated for removing the lightning wallet from the Google Playstore and App store for United States citizens not to be able to access it.

I guess these lightning wallets are targeted one after the other but we do not know the reason. Is it because Chainanalysis were unable to trace the lightning transactions or the wallet developers are not cooperating with the United States to make lightning transactions on their channels less private?

I don't know how true this is but I just get a information that even Trust wallet is no more available on Play store for U.S citizens, since I am not in the US I can't verify if this is true or not, it seems that Playstore just decide to do this on their own, because trust wallet has no privacy transaction or lightening features.

What is going on? Can anyone from the US verify this claim?

[dmamigo]

Probably, this is another case of some money laundering charges. The issue here is we cannot deny this fact as well that even though an exchange/wallet might not be included in this money laundering, people have been finding loopholes and continuing to do these kinds of actions. Here neither the government nor the exchange owners can do anything.
However, as I do not reside in the US, we cannot be sure of anything just by reading the news media. We all know, how manipulative media is nowadays.

As a few said, I also think that the US and everybody wants to regulate Bitcoin and the crypto market. But I doubt the US will be falsely accusing somebody of doing that because this does not make any sense. Now, when the non-custodial wallet case is added, all of this turns doubtful. Again, Exodus is running and working fine as much as I heard from some online friends and Exodus is a non-custodial.

Something is cooking but I guess as of now nobody knows what exactly it is. Everything is confusing and some information and facts are itself contradictory.

[BlackHatCoiner]

I guess these lightning wallets are targeted one after the other but we do not know the reason.

They are targeted for the same reason unregistered centralized exchanges are targeted. They're non-licensed money transmitting services. Like, real money transmitters, not like the recent vague definition which can treat even this forum a money transmitter. For example, if you deposit lightning bitcoin in Wallet of Satoshi, they hold custody of your coins, and are therefore subjected to regulations.

With the recent turn of events in the US, expect a lot more than custodial lightning wallet providers to shut down within the next few years.