Overreacting is the easy option, and all too often the one that is chosen. Unfortunately that's what this decision about Phoenix wallet seems to be.
Discussion
Assuming a legal defense fund could be set up, the community should welcome a lawsuit to decide what is considered a money service business. Iโm sure COPA would step up.
I think they're trying to avoid prison. Not an easy decision.
I assure you it's not easy to close down business in the biggest market, it hurts a lot, but risking getting arrested and leaving your children is probably not worth it
Wasn't pheonix self-hosted? Did it connect to them for something in the backend that brings them risk?
The app on your phone is a node so your own funds are self custodial. But it connects to their node for routing liquidity. This move by them seems to imply (I'm only guessing) that they believe their routing and liquidity services could bring them under legal scrutiny.
Without connection from your app/node to a good routing node, your own funds are unable to be sent anywhere via lightning even though you still have the private keys to the funds.
Lightning is going to get harder to run then. I hear self-hosting your own service is a major headache, especially with the many different methods (that I don't know the differences between)
This will be great for further tor/i2p LN node advances. Nothing like finally being threatened by the network's biggest enemy.
feels like we're not acting at all
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You canโt blame them
I do blame them. They are overreacting and creating hysteria by doing this.
You have 2 men facing 25 years in prison for operating a non-custodial bitcoin wallet that, in the eyes of the DOJ - which categorizes them as a money transmission business (https://www.justice.gov/usao-sdny/pr/founders-and-ceo-cryptocurrency-mixing-service-arrested-and-charged-money-laundering) is not THAT much different from phoenix wallet. There is no regulatory clarity right now
You are grossly oversimplifying the accusations made against them to the point that your point is irrelevant and borderline fearmongering. Stop it.
What are the accusations?
It would behoove you to read the entire document here that outlines what they're being accused of.
