Xapo, one of the earliest bitcoin custodians, is ending its service to U.S. customers as of March 1, according to a customer email dated Dec. 30 obtained by CoinDesk.
“Due to a change in our global business strategy, Xapo, Inc. is leaving the U.S. market and will be closing all U.S. customer Xapo accounts. As a result, we’ll need you to transfer your funds to an external Bitcoin address,” the company writes in the email.
Xapo is in the midst of pivoting to a digital banking service, according to a May blog post. Confirming the move to CoinDesk in an email, founder Wences Casares wrote:
“Our core value proposition is to protect our client’s life savings, mostly in emerging markets. Our target clients are people who have more than $30,000 in savings but less than $1 million who do not want to keep all of their savings in their local currency or in their country. Because of the amounts they have, they do not have access to international private banking services.”
After attaining a banking license in Gibraltar, the company realized that it would need to set up a separate organization to comply with U.S. banking regulations, in a market without strong demand for their specific services.
“Serving the U.S. market would require quite a lot of effort, time and investment, it would require a separate organization within Xapo to support it and it would still yield a worse product than what we can offer internationally,” Casares added.
The email to customers asked them to transfer their BTC holdings to an external address. Buying and receiving bitcoin within the app has also been disabled.
Xapo has also been one of the earliest participants in the Facebook-initiated Libra project, which recently rebranded as Diem.