Another reason why you need to think twice before using custodial wallet

[coinlary]

What you expect though? Government  should just let you'll transact without getting involved as a third-party? Nah that’s  too expensive lol. Government  are used to doing this nd it will only get worse especially for the upcomimg generation.

All these doesn’t  change the fact that bitcoin is still decentralized, they can only control the movement from fiat and back to fiat. The onchain transactions are easy to track anyway so there's  no much changing.

What i think should increase is more services that can accept Bitcoin directly as payment for goods and services.

[Kelward]

If you are using a centralized platform you dont have a full authorization with this, all you can do is to comply with their platform, they have all of the rights that they can do with your funds and even with your security whenever they want so having a custodial wallet recommends to not put most of your investment here you dont have a control with your money, that's why we recommend to use a non-custodial at least you will feel safe _{(well as long as you didn't too dumb things.)}.

And this is the exact reason why Bitcoin was created to emancipate us from the shackles of centralized platforms and banks, also from the inquisitive government who likes to control and monitor everybody's transactions. Bitcoin is decentralized and there for every holders, we are at liberty to choose self custody or third party custody, whatever happens to your Bitcoin if you choose third party custody cannot be blamed on Bitcoin. Be in control of your money and asset by choosing privacy which gives you a total access to a decentralized Bitcoin Blockchain, your self custody is your freedom from third party interferences so we should choose wisely.

[Somegory]

It was UK and EU, but now South Korea. Later more countries may join, but people that want privacy will still have it. If all transactions are tracked, that is very dangerous. The blockchain is available to everyone to see, what if the bad people can be part of the government and can track people and use the information against them and be used in wrench attacks? Anything is possible tomorrow, noncustodial is very important.

True, this is the only problem I have with this KYC verification, those information must not get into the wrong hands, I'm sure that the government have their reasons too, probably to go after criminals using the Blockchain.

It's not just good enough because some criminal will still evade it anyway, the crazy part is people will still choose to keep using centralised exchanges after all this news, but it's a reckoning, that day is coming where centralised exchanges won't have a say anymore.

Once people start realising that their lives are in far danger than they thought, almost everyone will start avoiding crypto exchanges all together, CZ himself knew what's coming in the future, it's why he chooses to instead run a decentralised exchange.

[bhadz]

It also happened with our local exchange, where, for every transaction that comes to my account, they're asking for its source and have to encode it by myself. It was a hassle when they did that last year. As in, for every amount I have received on my account, even it's also me, they're asking for those details. But all of a sudden, there were no announcements, and they removed that. I wonder why it's gone all of a sudden, and despite that, I don't like it; I was about to get used to it.

Yes it truly happened in our country and during that period, I also saw a screenshot of a balance of over $1m on the exchange he which was frozen and I really felt for the owner of such account and blamed him for not checking his email regularly and things and stories like this should be some reasons why ought to take our privacy and security very serious.

I can't remember that vividly but there have been series of frozen accounts and that's why the confidence of users of this particular and popular local exchange in our country have dropped a lot. They have asked every transaction being received by each user and that has caused a lot of users to move to international exchanges but then, the timing was perfect when our SEC has also banned the international exchanges such as binance but, it's now legal and permitted to operate again in our country.

[Fiatless]

I can't remember that vividly but there have been series of frozen accounts and that's why the confidence of users of this particular and popular local exchange in our country have dropped a lot. They have asked every transaction being received by each user and that has caused a lot of users to move to international exchanges but then, the timing was perfect when our SEC has also banned the international exchanges such as binance but, it's now legal and permitted to operate again in our country.

If the government wants to stop people from using decentralized payment platforms, they can. They would come up with laws that will erode privacy and criminalize bypassing these laws. If the government makes the use of non-custodial wallets illegal, many people will be forced to move their assets to centralized exchanges. Binance and other international exchanges are banned in my country, but the government is not serious about implementing the restriction. We would have to enjoy freedom as long as it lasts.

[maydna]

We may lose our privacy in the future as the government wants to know their citizen so they can controlling more tight than before. Their regulation limits citizen's privacy because citizen must report all transaction although well, that is their bank report to the government. But still, citizen will not have fully privacy to themselves. We can't so anything except following the regulation but I still have a hope that we can still have little privacy.

[Dr.Bitcoin_Strange]

For someone that has used centralized custody before or has done some purchasing of Bitcoin using centralized system, with this new law that the South Korea government is enforcing for Bitcoin and crypto, I guess they are likely to investigate old users address, for example, assuming someone have withdrawn 1 Bitcoin from a centralized exchange to a custodial wallet, the government can still track the receiving wallet and link it to the account it came from and if the person has submitted their details to the exchange they bought the coins from, they can be tracked. Now, storing your coins on self custodial wallet leaves you in full custody but if those coins came from exchange that you passed KYC on, you probably are on the watch list.

So, the best thing for people living there that doesn't want their coins and transactions to be monitored is to avoid buying their Bitcoin from those centralized exchange that ask for KYC. Like others have said, it is something that is not surprisen and the possibility of other countries doing same in the future is high because we know the government always like to be in control.

[purple_sparkles]

For someone that has used centralized custody before or has done some purchasing of Bitcoin using centralized system, with this new law that the South Korea government is enforcing for Bitcoin and crypto, I guess they are likely to investigate old users address, for example, assuming someone have withdrawn 1 Bitcoin from a centralized exchange to a custodial wallet, the government can still track the receiving wallet and link it to the account it came from and if the person has submitted their details to the exchange they bought the coins from, they can be tracked. Now, storing your coins on self custodial wallet leaves you in full custody but if those coins came from exchange that you passed KYC on, you probably are on the watch list.

So, the best thing for people living there that doesn't want their coins and transactions to be monitored is to avoid buying their Bitcoin from those centralized exchange that ask for KYC. Like others have said, it is something that is not surprisen and the possibility of other countries doing same in the future is high because we know the government always like to be in control.

I’m noticing a trend where governments in many countries are introducing laws and regulations aimed at maximizing and ultimately controlling their populations, especially when it comes to their finances. So it’s not surprising that they are also turning their attention to crypto exchanges and pushing them to hand over user data.I think it won’t be long before anything that doesn’t require KYC is considered illegal. Welcome to total financial control.I just hope that, as always, people will find ways to prevent governments from reaching into their pockets, monitoring every transaction, and dictating how and where people are allowed to use their own money.

[CryptoHeadlineNews]

Maybe when people start to realize that these centralised governments are after their every movement they will start taking privacy more serious because tell me how this is not getting out of control already?



This is the second time that I am seeing something like this in this month of August, now you can't make any Bitcoin transactions without some form of identification.

This is an obvious sign that government still wants to have control over Bitcoin that is been transacted within its area of jurisdiction, and until people realize this early enough and avoid custodial wallets, the better for them. Because instead of keeping large amount in a custodial wallets or centralized exchange where you do not have control over its private keys, it's better to just leave the money on our traditional bank, because this step which the South Korean government is trying to implement, by tracking every Bitcoin transaction by requesting for both the sender and receiver ID, and locations, if care is not taking, some other government might want to adopt this same exact measure, and that's a more reason why we need to make our Bitcoin's security and privacy our top priority.

[Livingleged]

My take on this is that no matter how the government want to control or contain, trace bitcoin transactions using a form of compulsive KYC, it can only be done with the centralized exchanges or wallet. And decentralisation cannot be defeated. Bitcoin it self wasn’t created to be used on centralised wallets, it is completely decentralised and will perfectly work without any centralized third party. So no need to worry about, unless you aren’t mindful about privacy. But if you do, then you should know that it’s better of you have you bitcoin on a self custody wallet and chill.

[CryptopreneurBrainboss]

Maybe when people start to realize that these centralised governments are after their every movement they will start taking privacy more serious because tell me how this is not getting out of control already?

The government has never been a pro Bitcoin adopter irrespective of how they claim to be in support of the currency. People don't love to give up power especially the government and they'll always proof that, they might make you feel like they're on your side or in support of what you stand for but will switch off on you when they have gotten the leverage they wanted and that's what just happen.

This should tell us what really the government are after irrespective of which country we come from as if a country that showed signs of welcoming Bitcoin can become this anti decentralization then I don't think we have much hope left and that's why we don't have to rely on the government to give us this adoption we're looking for.

The advice and right thing to do is never to settle down for any centralized service the government is emposing on us, using non custodial wallets and decentralized services should be our defence always.

[uchegod-21]

Are some bitcoiners just getting to realise this now? Everyone is supposed to know that the government will use every centralised platform to monitor the activities of bitcoiners. This is not new, soon it will spread to every other country where there are bitcoin users. So if you do not care much about being tracked and monitored, then you should stick to the custodial wallets.

At least, the government was kind enough to let the public know that going forward, users of custodial wallets will be tracked. We will soon enter the stage where it will be a case of automatic tracking with no prior notice. We can now make our choice, what we really want.

The government had issues with Bitcoin because of decentralization, they are now relaxed because they have found a way to track bitcoiners who prefer convenience to privacy.

[bhadz]

I can't remember that vividly but there have been series of frozen accounts and that's why the confidence of users of this particular and popular local exchange in our country have dropped a lot. They have asked every transaction being received by each user and that has caused a lot of users to move to international exchanges but then, the timing was perfect when our SEC has also banned the international exchanges such as binance but, it's now legal and permitted to operate again in our country.

If the government wants to stop people from using decentralized payment platforms, they can. They would come up with laws that will erode privacy and criminalize bypassing these laws. If the government makes the use of non-custodial wallets illegal, many people will be forced to move their assets to centralized exchanges. Binance and other international exchanges are banned in my country, but the government is not serious about implementing the restriction. We would have to enjoy freedom as long as it lasts.

Well, it's a different thing. Our government doesn't stop us from using decentralized platforms. What they want is more verification for each transaction that we make. To be honest, if it's with cryptocurrencies, then our government is so slow with it. They're quick to make policies about prohibiting an outside exchange to get into us but, they're slow in implementing it. And in fairness of them, they are not prohibiting us the use of non custodial wallets. Because if they do so, they have no way of verifying that an individual is doing it.

[Marykeller]

It was UK and EU, but now South Korea. Later more countries may join, but people that want privacy will still have it. If all transactions are tracked, that is very dangerous. The blockchain is available to everyone to see, what if the bad people can be part of the government and can track people and use the information against them and be used in wrench attacks? Anything is possible tomorrow, noncustodial is very important.

The government wouldn't think of bad players in their midst. What they know is what they will do to have everyone under their control, not about the dangers they are putting their citizens in if bad actors have full access to everyone's blockchain transactions in South Korea.

I sense danger in this because information and the locations of people will be leaked to the bad ones, and I am sure it won't be something good to talk about to the ears of others

[Shadiq]

The government does not want to lose control over the people for a moment and wants to collect taxes by keeping an account of every single penny of the people.

I often wonder, if the government can control the people's money and monitor the people's assets, then why can't there be a system where the people can also monitor the government's assets? No government would do that.

So why should you be a victim of security risks? Free yourself from government control by using a non-custodial wallet. The main tool of the government to create a surveillance environment in the use of crypto is custodial wallets, they will now start promoting these wallets and try to declare non-custodial wallets as illegal.

[PrivacyG]

With a number of exceptions, though. With what happened recently, it seems "full control" is becoming a myth. One who has been hodling on YoBit could have laughed at somebody else for keeping his on a hardware wallet.

Not really.  The Coldcard victims were in actual full control of their own very low security Seed.  I mean.  I could create a really simplistic Brain Wallet right now and only because my Bitcoin gets sweeped in a couple of seconds it does not mean I did not have full control.

You have full control over the Seed you have.  If you generate a low security one or put it in a website telling you to give them your Seed to upgrade to post Quantum security, that is something else.  It is not becoming a myth at all.

[Cookdata]

Maybe when people start to realize that these centralised governments are after their every movement they will start taking privacy more serious because tell me how this is not getting out of control already?

If sending Bitcoin from a sender to a receiver warrant identification then the purpose of Bitcoin transaction is defeated. The exchanges request for kyc and mostly are the people that want them as custodial, they will not ask receiving kyc unless they don't have sense or don't know how Bitcoin transaction work, by the ways this is not how anti money laundering works, perhaps we are getting hit by another wave of anti money schemes for verification, this is not regulationss IMO.

I don't see problem if this is an internal transaction, you can't send and receive transactions without an identification within the exchange, that's fair since it involves exchange as escrow but if one is going to make deposits from exchange to external wallet and the government want to make it mandatory for kyc requirements, then that's nonsense, that's worst than tyranny, that's worst than dictator, that's not even a government.

[Emeraldo]

I don't know the agenda the South Korea government is trying to implement but this is too strict for people from that region to use their IDs before carrying out a Bitcoin transaction. This shows that soon or later, the will be countries that will be implementing the same law to track users and how they spend their own Bitcoin. What if I travel to South Korea, I hope I will be able to make crypto transactions without any restrictions looking at the implementation the government has made mandatory for all residence maybe expatriates are not included.

[The Cryptovator]

Maybe when people start to realize that these centralised governments are after their every movement they will start taking privacy more serious because tell me how this is not getting out of control already?

Thankfully Bitcoin transaction from one wallet to another using ID won't work unless you are using Xapo like wallets (custodial).
The Agenda is real, they won't stop.

For security purposes we always advise to avoid using any centralised platform to protect our funds. Besides that, privacy also matters for us; hence, using a custodial wallet is always traceable. The government would ask for users' data from any custodial wallet or centralised platform.

Out of that, these custodial wallets would ask anytime about your personal data, like income sources, etc. If you failed, then the account would freeze; also, they would freeze for any other reason as well. Keep in your mind, you aren’t safe with a custodial wallet; just secure your funds into an open-source hardware wallet. Bitcoin is decentralised; no one can trace you.

[Orpichukwu]

Thankfully Bitcoin transaction from one wallet to another using ID won't work unless you are using Xapo like wallets (custodial).
The Agenda is real, they won't stop.

They are not just trying to limit spending for those who are using third-party services for custody; they are also trying to make sure that people can’t acquire Bitcoin with ease without them tracking where the purchased Bitcoin is going.

If this continues, it will be very hard for those who don’t know their way around on how to acquire Bitcoin without centralized exchanges to buy any single Bitcoin unless they are ready to give out enough information which will link all transactions to their real-life identity, including those services tagging all receiving addresses connected to them.