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Remember To Withdraw Your BTC From Exchanges

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  • Brian Armstrong, the CEO of Coinbase, just posted a lengthy thread on Twitter reassuring the world that this clause was added to the disclosure because of the new SEC rule, that they hope to give retail clients the same assurances that their Prime and Custody customers have, that nothing like this has been tried in court, and that the government is unlikely to deem user property as Coinbase property.
  • By taking control of your wealth and keeping your own keys, you can eliminate this third-party danger. Sure, there are some hazards involved. When you must be able to safeguard the keys, there are strategies to prevent single points of failure while in possession of them.
  • In self-custody, multisignature wallets are a useful solution to eliminate single points of failure. At the very least, you should take control of your own keys and accept the risk of being your own single point of failure, because governments will, as they always have, turn totalitarian once bitcoin becomes really popular and widely used. 

Needless to say, your bitcoin is not safe on the exchanges today, as it has been since the first bitcoin exchange was opened. Today, Coinbase released its quarterly earnings report, which included new wording in its 10-Q concerning the legal claims that retail users have in the case of a bankruptcy. Coinbase had to update language to its platform in response to new SEC regulations that said that retail users’ assets held on the exchange could be deemed as property of the bankruptcy estate in the event of a bankruptcy.

Seizing Assets From American Individuals

Brian Armstrong, the CEO of Coinbase, just posted a lengthy thread on Twitter reassuring the world that this clause was added to the disclosure because of the new SEC rule, that they hope to give retail clients the same assurances that their Prime and Custody customers have, that nothing like this has been tried in court, and that the government is unlikely to deem user property as Coinbase property. Maybe your Uncle Marty is insane, but the argument doesn’t hold water with me. Especially when you consider that the government has already been known to seize assets from American individuals. ‘Do you recall Executive Order 6102?

ALSO READ – Blockchain services provider Elrond partners with Anchain to prevent fraud 

The Risk Of Being Your Own Single Point Of Failure

Needless to say, your bitcoin is not safe on the exchanges today, as it has been since the first bitcoin exchange was opened. Bitcoin exchanges are third-party single points of failure susceptible to human mistake, hacking, and government coercion. By taking control of your wealth and keeping your own keys, you can eliminate this third-party danger. Sure, there are some hazards involved. When you must be able to safeguard the keys, there are strategies to prevent single points of failure while in possession of them. In self-custody, multisignature wallets are a useful solution to eliminate single points of failure. At the very least, you should take control of your own keys and accept the risk of being your own single point of failure, because governments will, as they always have, turn totalitarian once bitcoin becomes really popular and widely used. 

The exchanges will be their first target. As a starting point, you should use this assumption. You should also take control of your keys because it is why bitcoin was developed in the first place: to allow people to store their own money and send and receive it without relying on trustworthy third parties. By being lazy, you are doing a disservice to the network. Especially if you believe bitcoin keeps on exchanges being re-hypothecated and given out to traders who are actively shorting bitcoin. In the process, the price is being suppressed. Holding your keys makes it easier to do less of that task.

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