Self-Custody Is More Than a Feature - Dennis Jarvis, CEO of Bitcoin.com 
Self-Custody Is More Than a Feature - Dennis Jarvis, CEO of Bitcoin.com

Self-Custody Is More Than a Feature - Dennis Jarvis, CEO of Bitcoin.com

While markets are going up, people get more comfortable putting their cryptoassets into trusted third parties such as centralized exchanges and centralized lending platforms that promise increasingly enticing returns.While markets are going up, people get more comfortable putting their cryptoassets into trusted third parties such as centralized exchanges and centralized lending platforms that promise increasingly enticing returns.
While markets are going up, people get more comfortable putting their cryptoassets into trusted third parties such as centralized exchanges and centralized lending platforms that promise increasingly enticing returns.
As markets peak and monetary policy tightens, companies that overleveraged on the way up expose themselves to liquidity risks.
Pretty much everyone in crypto has heard this phrase at this point.
Not Your Keys, Not Your Coins
During every contraction, whether it is in crypto or traditional markets, highly leveraged businesses have a greater chance of failing.
We highly recommend for people to move your funds off of centralized services into self-custodial wallets (sometimes called non-custodial).
Risk Exposure to Failing Crypto Products
Self-custody doesn’t completely protect from risks associated with failing projects.
The risks of LUNA/UST were apparent for many to see because the finances were mostly on-chain, transparent and free for anyone to observe.
A far worse problem is the centralized crypto products because their finances are shrouded in mystery.
Celsius Network, a centralized borrow/lend crypto platform suddenly announced on June 13 that they were freezing customer assets.
“Mike do you know even one person who has a problem withdrawing from Celsius?, ”
“why spread FUD and misinformation.
“If you are paid for this then let everyone know you are picking sides otherwise our job is to fight Tradfi together…”
“— Alex Mashinsky (@Mashinsky) June 11, 2022”
@CelsiusNetwork is pausing all withdrawals, Swap, and transfers between accounts.
Acting in the interest of our community is our top priority.
“— Celsius (@CelsiusNetwork) June 13, 2022”
This caused a market wide sell-off, during which centralized exchange Binance, the world’s largest crypto exchange, announced the “temporary pause of bitcoin withdrawals.”
“Temporary pause of $BTC withdrawals on #Binance due to a stuck transaction causing a backlog. Should be fixed in ~30 minutes. Will update.”
“— CZ 🔶 Binance (@cz_binance) June 13, 2022”
On June 15, The Wall Street Journal reported that Celsius had hired restructuring lawyers to “advise on possible solutions for its mounting financial problems.”
In the event that Celsius becomes bankrupt, enters liquidation or is otherwise unable to repay its obligations, any Eligible Digital Assets used in the Earn Service or as collateral under the Borrow Service may not be recoverable, and you may not have any legal remedies or rights in connection with Celsius’ obligations to you other than your rights as a creditor of Celsius under any applicable laws.
Meanwhile, rumors began to circulate on June 14 that famed crypto hedge fund, Three Arrows Capital (3AC) was insolvent.
“We are in the process of communicating with relevant parties and fully committed to working this out”
“— Zhu Su 🔺 (@zhusu) June 15, 2022”
Self-Custody Is Insurance
While it’s impossible to know if there will be contagion or how far it could spread (hopefully we’ve already seen the worst of it!
Self-custody is certainly more than insurance, however, its role as insurance is critical.
All insurance comes with a premium, and self-custody is no different.
Bitcoin.com’s mission is to create economic freedom, which is why we dedicate the majority of our resources to development of the fully self-custodial Bitcoin.com Wallet and other self-custodial products like the Verse DEX.
Dennis Jarvis is CEO of Bitcoin.com