Kraken, a U.S.-based cryptocurrency exchange, has started requiring additional information in the U.K. regarding transactions of self-custody wallets made to and from its accounts. Kraken sent an email to some of its U.K. customers, stating that if the information required was not provided, it could result in an account lock until the required data is […]
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The push for greater financial freedom and decentralization in the crypto ecosystem continues with the introduction of the “Keep Your Coins Act” to the U.S. 118 Congress by Senator Ted Budd (R-NC) on Nov. 7.
The new bill aims to empower individuals to maintain full custody of their digital assets like Bitcoin (BTC) without reliance on third-party intermediaries like exchanges.
This self-custody legislation comes from the disastrous FTX collapse, highlighting the risks of leaving funds on centralized platforms.
Part of the bill reads:
“To prohibit Federal agencies from restricting the use of convertible virtual currency by a person to purchase goods or services for the person’s own use, and for other purposes.”
Senator Budd stressed the growing need for investors to control their digital assets amidst rampant industry turmoil.
“As consumers face new challenges and risks associated with the use of digital currencies, we should be empowering individuals to maintain control over their own digital assets,” Senator Budd said. “This approach will foster financial freedom and a more decentralized cryptocurrency ecosystem.”
If passed, the act would prohibit federal agencies from enacting rules against self-hosted wallets.
Meanwhile, the Senate bill mirrors previous efforts in the House, where Rep. Warren Davidson introduced similar legislation in 2022.
Davidson’s “Keep Your Coins Act” passed the House committee last July, though it has yet to see a full floor vote. The congressman has been a vocal advocate for protecting self-custody wallets from government overreach and has also been a prominent supporter of the emerging industry against regulators like the U.S. Securities and Exchange Commission (SEC).
The House and Senate bills underscore a broader push towards a more decentralized crypto ecosystem, where users retain personal control over assets. This aims to mitigate third-party risks while preserving financial freedoms.
While the fate of self-custody legislation remains uncertain, the latest Senate introduction keeps the conversation alive as lawmakers grapple with crypto oversight approaches.
Cryptocurrency self-custody platform Casa has rolled out support for Ether (ETH) storage, touting its support for multisignature Bitcoin (BTC) and ETH self-storage as a first in the industry.
Since its inception in 2016, Casa has promoted multisignature self-custody in the crypto industry. Its flagship Bitcoin vault allows users to store the cryptocurrency using up to five keys for more distributed security.
Casa’s service originally catered to Bitcoin “whales” willing to spend $10,000 a year on custody before opening its service to a broader base of users. The company has now added an Ether vault to its platform, with ETH holders also able to use up to five keys to secure their holdings.
According to Casa CEO Nick Neuman, with Bitcoin and Ethereum operating as entirely different protocols, the industry had not yet built a security solution that accommodates both on the same platform, aside from various hardware wallet models.
The firm is also engaging with users over the potential of adding self-custody support for various ETH-related assets, including nonfungible tokens, stablecoins and ERC-20 tokens.
As Cointelegraph previously reported, Casa co-founder and chief technical officer Jameson Lopp highlighted increasing calls for a multisignature ETH self-custody from its users and the wider cryptocurrency community.
Casa announced its intent to launch an ETH storage solution amid several high-profile collapses of custodians like FTX, as many users not only lost access to ETH, but also to their Ethereum-based stablecoins and other ERC tokens.
Related:Â Ledger CEO says crypto key recovery service makes self-custody easier
Hackers also wrought havoc within the Web3 space in 2022, with billions of dollars stolen through decentralized finance bridge hacks and smart contract exploits. It’s a point Neuman highlighted when Casa announced its plans for ETH storage on its platform, with many hacks across the “Web3/crypto space due to poor private key management.”
In an interview with Cointelegraph journalist Joe Hall, cypherpunk Jameson Lopp stressed the importance of making self-custody solutions more accessible and easier to give users complete control of their assets and peace of mind managing the associated responsibilities.
Industry experts have also suggested that its difficult to estimate the amount of BTC currently held in self-custody wallets.
Magazine:Â Ordinals turned Bitcoin into a worse version of Ethereum: Can we fix it?
There is no way to measure the amount of Bitcoin (BTC) that is being sent to self-custody wallets so far, according to one industry executive.
Amid the ongoing fear, uncertainty and doubt, or FUD, over lawsuits against major cryptocurrency exchanges, investors have been increasingly offloading their Bitcoin from crypto trading platforms.
As of mid-June, Bitcoin’s exchange supply fell to its lowest level since February 2018, according to data from the crypto intelligence platform Santiment. The massive exchange outflows have been triggered by self-custody growth fueled by uncertainty around Binance and Coinbase, Santiment said.
The growing self-custody trend has a massive impact on cryptocurrency markets, Santiment’s head of marketing Brian Quinlivan told Cointelegraph on June 15.
One of the most notable results of self-custody is that it tends to decrease circulation, thereby reducing the market capitalization tracked by websites like CoinGecko and CoinMarketCap.
“Circulation does tend to dry up as coins are moved off of exchanges,” Quinlivan said, adding that the increasing self-custody trend has a downside in the form of stagnant coins.
“This stagnancy can have a negative impact on market cap due to the lowered utility of the network as a whole,” the exec noted, adding:
“However, as long as there is still a healthy amount of exchange activity, which there has been, this generally should be enough to cancel out the negative impact of this current phenomenon.”
Quinlivan stated that coins moving off exchanges have more of a long-term impact on markets. “Traders sometimes assume that if a massive amount of tokens is suddenly moved off exchanges by whales, prices will immediately rise,” he said, adding that the firm has seen that it was usually a much more gradual rise.
The Santiment executive noted that Bticoin’s supply on exchange has plummeted from 16.1% on Black Thursday in March 2020 to 9.8% today. “Prices are still up 283% during this time span,” Quinlivan added.
While the self-custody trend continues to expand, it’s not quite possible to find out how much BTC is sitting on cold wallets, according to Quinlivan. He said:
“Assuming we have every exchange address in existence, which nobody does, then we would be able to measure precisely how much is moving to cold wallets at any given time just by subtracting out all of these known exchange addresses.”
The executive went on to say that, for now, blockchain analysts can only give their best estimation.
“It is why our exact number of 9.8% of BTC on exchanges may vary slightly compared to other data out there. The longer time goes on, though, the more accurate data we are able to capture,” Quinlivan noted.
Related: Binance CEO CZ responds as data points to billions in exchange outflows
The news comes amid Bitcoin’s market capitalization continuing to shrink, according to data from CoinGecko.
Since mid-April, Bitcoin’s market value has dropped more than 15%, amounting to $494 billion at the time of writing. As previously reported by Cointelegraph, the BTC market cap reached its highest point of $1.28 trillion in November 2021, when the BTC price hit an all-time high of $68,000.