It has always been said that if you want to be the real owner of your virtual currencies you should keep them in cold storage and hold your private keys. However, there is a large number of users that continue to hold their coins on centralized exchanges. This is something that could certainly affect cryptocurrency users in the future.
Indeed, Jess Powell, the CEO of Kraken, one of the most popular cryptocurrency exchanges in the world, advised users to keep their funds outside exchanges. This is just one of the many cryptocurrency experts that consider that users should keep their funds in cold storage.
Don’t Keep Your Funds on Centralized Exchanges
If you don’t want to be worried about accounts being frozen and your funds getting stuck in a cryptocurrency exchange, then you should definitely take them out of crypto trading platforms to a wallet that lets you hold your private keys. This is the best way to protect your digital currencies if governments request exchanges to freeze assets.
These comments come as Canadian’s Deputy Prime Minister Chrystia Freeland explained that crypto accounts reported by the RCMP had been frozen. Moreover, she explained that more will be frozen in the future. Protests in Canada have pushed the government to take extreme measures against citizens, including freezing protesters’ bank and crypto accounts.
Over the last years Know your Customer (KYC) and Anti Money Laundering (AML) checks have been implemented on exchanges as requested by centralized regulatory agencies and governments. This has created a situation in which cryptocurrency investors have to share with the crypto platform large amounts of information, from addresses and names and surnames to ID pictures.
Jesse Powell said on Twitter that if someone dissents with the government, you simply confiscate their wealth or revoke their licenses. Moreover, he mentioned that excluding them from the financial system is also one of the ways for governments to punish people who dissent with them.
A cryptocurrency user stated that Kraken could also be put in a position where they would have to freeze assets in the future without judicial consent. Jesse Powell answered that it will happen and that they will be forced to comply.
About it, he stated:
“100% yes it has/willl happen and 100% yes, we will be forced to comply. If you’re worried about it, don’t keep your funds with any centralized/regulated custodian. We cannot protect you. Get your coins/cash out and only trade p2p.”
Right now, Bitcoin is being traded close to $40,300 and it has been trying to move lower over the last few hours.