Crypto Exchange Binance Says It Is Taking Steps Against Sanction Targets | Hacker News Reader

Crypto Exchange Binance Says It Is Taking Steps Against Sanction Targets

wsj.com

32 pointstemp896414 comments

Is there any benefit to keeping cryptocurrency on exchanges at this point?

On the one hand, if you like the idea of cryptocurrency, having large powerful exchanges is beneficial since they provide a voice against ham-fisted policies that would effectively make cryptocurrency illegal. But on the other hand they'll obviously play ball when the state asks them to censor or confiscate.

Obviously the best solution is to manage your own keys, but even as someone that's sophisticated technically, I still get nervous having a large amount of money dependent on a piece of paper stored away somewhere in my desk. Is there a middle ground or best practices where we can be reasonably assured our funds are safe from state influence but easily accessible and secure? Are multi-sig wallets at a state where they can be useful and free from confiscation?

You seem to be under the misapprehension that cryptocurrency lets you ignore the state. If all the major exchanges in a country don't accept your tokens, your tokens are worth less.

Yes, in the extreme if no exchange accepts your token, the token is likely worthless. However, if you happen to own a token and you happen to live or are a citizen in the wrong country and some exchange blocks you from accessing your tokens, that could be resolved by owning your keys. First, the exchange won't be able to confiscate the tokens. There also may be exchanges in your country that aren't blocking access. Finally you can trade them informally or transfer them to someone else outside of your country.

There are plenty of people willing to exchange crypto for fiat currency...makes it harder to get your money, but it's still way better than if the government just freezes your bank accounts.

Those people will be less willing to buy your crypto tokens if they cannot use those crypto tokens on exchanges. Hence, worth less.

Are they really going to freeze every wallet that has been tainted by transactions from a certain wallet? If that was the case...if I was in charge of those wallets I would absolutely send a little bit of crypto to all of the major exchange wallets so they end up on a freeze list. Maybe even hit up some of the bigger crypto players as well (some US govt entities, mostly local ones, accept crypto now).

No, they would freeze those tokens from exchanges.

It doesn't work like that...once the funds are in a wallet they are intermingled and you can't just "freeze" some of them.

You're right. Wallets that get illicit Bitcoin would have to turn over the illicit Bitcoin before they could sell any on the exchange.

Ignore my sibling comment. I was right initially. Any UTXO created from an illicit UTXO can be blocked from exchanges.

Why even do that in the first place, I thought the whole point of cryptocurrency is to have possession of your money. What's the point if you let some exchange do it for you?

Convenience mostly. If you want to sell or buy more. If I get him by a bus my partner can go through the legal system to attain the funds as opposed to trying to find and manage my keys.

Even if you are on an exchange you can always export and transfer abroad or to anyone else outside of the formal financial system. It doesn't have to be all or nothing. I'm just looking for options other than 100% self custody and 100% reliance on an exchange

Yes, crypto trading. I'm working on an automated crypto trader that uses technical analysis (rules). Copy trading for those that don't know how to do that. https://tradecast.one

> Is there a middle ground or best practices where we can be reasonably assured our funds are safe from state influence but easily accessible and secure? Are multi-sig wallets at a state where they can be useful and free from confiscation?

Yes. Take a look at the system used by the Muun wallet[0]. The short version is that it's a 2-of-2 multisig system where you keep one key "online" (on your phone) and they keep the other. Both keys are required to transfer funds—so in the event that either your phone or their systems (but not both) proves compromised or malicious your funds are still safe. That takes care of "easily accessibly and secure". As for "free from confiscation", you additionally keep copies of both keys offline and encrypted in your "emergency kit", which ensures that you retain control even if Muun disappears or stops cooperating. They can't freeze your funds, even if ordered to do so.

The Muun wallet supports both traditional (on-chain) and Lightning transactions for online transfers.

[0] https://blog.muun.com/muuns-multisig-model/

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