"Not your keys, not your coins"- You're probably already pissed off for hearing this a thousand times already, and this has probably been said a bajillion times already to the point that it's probably one of the most quoted statements in the bitcoin and cryptocurrency space.
Now, if the concept of not actually owning the coins on your exchange account doesn't make you uneasy enough..
Well, hopefully this does.
There has been rumours about the U.S. Treasury and the controversial Steven Mnuchin rushing out a regulation concerning non-custodial wallets. Now, what would the regulation most probably be about? Most likely, heavy KYC, and heavy invasion of privacy in general.
As per Brian's
Tweets: "
This proposed regulation would, we think, require financial institutions like Coinbase to verify the recipient/owner of the self-hosted wallet, collecting identifying information on that party, before a withdrawal could be sent to that self-hosted wallet." Imagine needing to reveal who you're sending your funds to everytime you send out your coins.
Take note though, the rumours aren't just from some random nobody on the interwebz. It's from Brian Armstrong, Coinbase's CEO. Definitely a huge name in the space regardless if he's quite controversial himself, and definitely not a rumour that we should just be ignoring.
If you're interested in the whole Twitter thread, I linked the full thread in article form(for better viewing) along with other articles at the end of this post.
Some people on other communities like on crypto Twitter are really concerned that some of them are telling people to get ready to "go dark" if ever such a strict regulation gets into effect.
And, it seems like some people are probably not taking this rumour lightly. As per data from Arcane Research(and glassnode), well, there has been a dip on the number of user's coins left on exchanges. Did the rumour cause this? Or is it just simply long-term holders withdrawing their coins to non-custodial wallets for long-term holding? No way to know for sure. But take note that the Tweet was posted on November 26th.
The question is: will this just be purely a rumour that will not amount to anything soon? Maybe, maybe not. But one thing's for sure, is it worth risking? In my opinion, definitely not.
And this is just the start. As Bitcoin grows in terms of adoption, expect things to get tighter and tighter. Better be safe than sorry.
Obviously this is for people who actually don't actively trade and just hold bitcoin as a speculative investment, and probably the traders that doesn't want to provide KYC/AML documents. Not sure why I have to make this clear lol.
Some articles if you want to dig deeper:
