A top-level executive with one of the leading crypto firms (SatoshiLabs) has weighed in on regulators’ increasing worries over crypto investors’ decisions to move their digital assets. Recently, there has been a huge spike in the number of crypto investors moving their digital assets from centralized exchanges to private wallets.
Ban Popularizes Certain Technologies
SatoshiLabs’ CFO (Stepan Uherik) opined that it is almost impossible for the authorities to ban the use of private crypto wallets outrightly, whether in the near term or the future. Ukerik likened the possibility of an outright ban of private crypto wallets to the ban on cryptography, torrents, or other similar things many years ago.
He further said, “despite the ban on torrents, the use of the technology continued non-stop. In certain cases, the government’s efforts to ban specific technologies usually make such technologies more popular.” Private crypto wallets (also known as self-custodial or non-custodial crypto wallets) help users with complete control of their digital currencies, especially the storage of their private keys.
Many crypto investors prefer these types of crypto wallets to the custodial ones because they fully control what happens to their digital assets. Also, their digital assets cant be subjected to freezing or seizure, which sometimes happens with custodial (aka, third-party) crypto wallets. Private crypto wallets users are their own banks. Hence, many regulators and financial institutions are concerned about this technology’s enormous power to users.
Why Regulators Are Worried About Private Crypto Wallets
On Tuesday, the association of Russian banks proposed that the authorities should make it a criminal offense for anyone to own a private crypto wallet citing reasons such as the use of cryptos to hide assets and evade taxes. Also, earlier in the week, an EU committee submitted an update of the EU’s crypto regulatory policy in which it modified the powers exchanges have over private crypto wallets.
Nevertheless, the SatoshiLabs CFO maintained that the government’s powers are only limited to restricting private crypto wallets usage as there is no way they can ban it outrightly. Uherik suggested that the only way authorities could restrict the use of private crypto wallets is through a ban on such wallets from the google and apple mobile app stores since they are the only mobile app stores globally.
An Act Against Civil Freedom
Then, he added that even if they do as he suggested, not all private crypto wallets will be affected. Hence, many holders will opt for hardware and desktop wallets that can’t be found on mobile app stores. The government’s ban on private crypto wallets from mobile app stores won’t affect these alternatives.
He also said, “the government’s ban may not become effective and might be reversed almost immediately. Customer protection NGOs would voice out against and possibly sue the government since such a ban is an act against the freedom of civilization being in practice in most countries.” “The government’s war against crypto is one they can’t win. It’s a technology that will remain with us forever,” he concluded.