Will the US ban self-hosted wallets?

[Findingnemo]

Nope, they are not going to ban the self hosted wallets. Government is trying to break the privacy from those wallets by seeking information like source of income and KYC details when withdrawal and deposit to regulated exchange cum wallets so it will be more easier for the government to track the persons.

Well it is still nit confirmed official news but most likely will be implemented in the near future.

[exstasie]

Can somebody break this down for me?

Let's say you've already completed KYC at an exchange. So this will make it so you need to verify ownership of any address you withdraw to? (How? Message signing?)

It sounds like they are just trying to prevent exchanges from transmitting money on behalf of customers. Customers would therefore only be able to transfer (withdraw) coins to themselves.

Not a big deal really since you can do whatever you want with your coins once they are in your own wallet. Am I missing something?

[jossiel]

I don't think they will go that route but if they do, how are they going to effect the law.

The law will take effect on it when the government starts to crack down addresses from exchanges and get information including the sensitive and private details of the wallet owners.

But as said from the previous posts, you don't have to worry about it as this is still a rumor and probably we're not going to see it in a couple of months or even up to year. Who knows? US won't probably focusing that much on this, there are other things to focus rather than banning such as self-hosted wallets. Probably not yet of their concern.

[thesmallgod]

Today it was declared that states have this right and not federal which means USA can't ban self-hosted wallets even if they wanted to. Which means you could live in a state that decides to do this, but it will be state by state basis. Plus, if we know USA well enough that means there will be few states that will do it and many that will not go for it on the basis of either not caring about it at all and not doing it because of it, or maybe supporting like states such as Ohio and California.

So long story short, we do not have any USA ban in our hands at all, there is no reason to assume anything bad.

If a state like Kentucky or something bans it, people will react to it and get scared but remember, it will be state by state basis and only a few will probably do it.

If some state will ban while some we not, I am just wondering how this is going to be effective. This is an internet thing it might be difficult to achieve this and by the way they have taken away the basic reason why many users are making use of bitcoin. You cannot have your KYC document taken by platforms that you cant be sure will not suffer data bridge in the future thereby putting you identity at risk of being sold in the dark web. If this is an Hoax, it is better not true because I believe this wont be a good news at all for crypto users especially in the United state where there are many users of the crypto

[Findingnemo]

Can somebody break this down for me?

Let's say you've already completed KYC at an exchange. So this will make it so you need to verify ownership of any address you withdraw to? (How? Message signing?)

It sounds like they are just trying to prevent exchanges from transmitting money on behalf of customers. Customers would therefore only be able to transfer (withdraw) coins to themselves.

Not a big deal really since you can do whatever you want with your coins once they are in your own wallet. Am I missing something?

What I understand by reading articles related to that rumours states that exchanges should collect the owner's information like KYC details for every address they are withdrawing their crypto assets which means they are trying to link the address with real identities so tracking becomes possible when exchanges give data to the government.

Of course you can move your funds anywhere you want but you are going to lose your privacy once you withdraw cryptocurrency from centralized exchanges to your primary wallet.

[TofuDefi]

What I understand by reading articles related to that rumours states that exchanges should collect the owner's information like KYC details for every address they are withdrawing their crypto assets which means they are trying to link the address with real identities so tracking becomes possible when exchanges give data to the government.

Of course you can move your funds anywhere you want but you are going to lose your privacy once you withdraw cryptocurrency from centralized exchanges to your primary wallet.

That's why DEXes and DeFi are so important.