New GOP Bill Aims to End Debanking of Crypto Companies and Risky Industries
The new GOP bill follows congressional hearings on "Operation Chokepoint 2.0" and reflects bipartisan consensus to end debanking practices.
Following the FTX scandal, there has been a rise in industry leaders pointing towards self-custody and holding crypto tokens in secure hard wallets and off crypto platforms. Binance CEO Changpeng “CZ” Zhao took to advocating self-custody of crypto funds as a human right. Despite leading influential figures in the space advising it, there have been warnings from others that it’s not a viable option for all users and not a sustainable way for crypto storage in the future of digital finances.
Co-founder of Ethereum Vitalik Buterin noted on Twitter that there are still risks involved in self-custody given that smart contracts aren’t entirely proofed against bugs or glitches. He stated:
The “centralized anything is evil by default, use defi and self-custody” ethos did very well this week, but remember that it too has risks: bugs in smart contract code.
Important to guard against it:
* Keep code simple
* Audits, formal verification, etc
* Defense in depth— vitalik.eth (@VitalikButerin) November 16, 2022
Crypto data platform Messari analyst Tom Dunleavy echoed some of Buterin’s sentiments, noting that the better solution to security is not necessarily in self-storage, but rather in good regulation with safe and transparent centralised storage.
We need to be brutally honest in times like this and get out of our bubble
Self-custody is not desired by 95% of the population and it never will be
If we want to onboard BILLIONS of users we need to make safe, transparent, trustworthy, custody work
That means good regulation
— Tom Dunleavy (@dunleavy89) November 11, 2022
Watchdog Capitals’ Bruce Fenton pointed out the limitations of self-storage from the perspective of inheritance. In a thread of tweets looking at tests to see how next-of-kin could retrieve tokens in the case of familial death, he tweeted:
“Self custody without a plan for inheritance is incomplete. It’s a gift to no one.”
The argument surrounds the idea of mass adoption in cryptocurrency. If the average user relies on an exchange, rather than self-storage, to hold their funds it requires strong protocols of security and even stronger regulation in place to protect funds. If they do rely on self-custody of their tokens, there needs to be an increase in education in the space to ensure users understand the shortcomings of smart contracts and possible risks associated.