Just wait until this normalizes LSPs KYCing users because they’re executing USD<>BTC trades on their behalf. View quoted note →

Let’s be clear, if no one steps up and decides to run LSPs because everyone is worried about regulatory concerns, every bitcoin L2 system is toast - every one that has a reasonable security model relies on some kind of centralized or federated party that has similar concerns, even if they can’t seize funds. Without any L2 systems everyone using bitcoin will simply use custodial platforms because that’s the only way to get reasonable fees and payment latency. And don’t go yelling at ACINQ for deciding not to operate Phoenix in the US, the software required to run an LSP is open source, with only relatively minimal liquidity allocation logic required to get started. We need new entrants, and that means new companies who think the risk is manageable (I’m confident it is, but I can’t fault anyone for not wanting to take that risk). If you see someone suggesting ACINQ should just keep running, the correct response is “well why aren’t you running an LSP”.

If you think an LSP is “obviously not an MSB” you’ve never spoken to a lawyer with any sense at all. It may not be an MSB, and I hope it’s not an MSB, and I think it’s probably not an MSB, but speaking with any certainty about this is absolutely impossible. The law and regulations about this are not even remotely clear and do not consider any kind of system like bitcoin, let alone lightning. Don’t talk shit about others avoiding substantial personal legal risk.

It’s weeks like this that you have to wonder whether Bitcoin has a real shot at all. * We thought mining was centralized but it was worse than we thought, and the ideas we have to improve it don’t seem to be making progress. Will Bitcoin be censorship resistant in a decade or will censorship be the norm with one or two pools deciding what enters the chain. * With ACINQ pulling out of the US they’re signaling they don’t think it’s worth the risk. With few LSP alternatives in the US today will noncustodial lightning make it in the world’s biggest market? It’s important to keep building but it’s also important to keep an eye on the biggest problems - best to work on the biggest problems in Bitcoin to maximize the chance it’s still a useful system with properties we’d be proud of in another decade.

Why are you bullish anon?