Report: Canada’s OSC Warns Crypto Exchanges Against Promoting Self-Custodial Wallets

The tweets from Coinbase CEO Brian Armstrong and Kraken CEO Jesse Powell were forwarded to the Canadian police by the Ontario Securities Commission.

According to a storey by The Logic, tweets from the CEOs of Coinbase and Kraken advocating self-custody of digital assets are being investigated by the Royal Canadian Mounted Police for violating the penalties placed in place to stop trucker demonstrations in the country.

Canadian securities regulator Ontario Securities Commission (OSC) sent the tweets to the police since it suspected that the crypto executives were offering guidance on how to dodge the restrictions on funds, according to the report.

The Ontario Provincial Police and the Royal Canadian Mounted Police issued an order late last week ordering all regulated financial institutions, including crypto exchanges, to halt trading and freeze the assets of “designated persons” involved in the trucker protests, as well as 34 associated crypto wallets.

Powell and Armstrong both tweeted shortly after Deputy Prime Minister Chrystia Freeland announced the policy that customers should self-custody their crypto on self-custody applications run by their individual exchanges.

Self-custody refers to the fact that the owner of the digital asset possesses the wallet’s private key and so has exclusive access to it. Keeping an asset in a safe, with only the owner knowing the combination, rather than putting it in a bank, is an acceptable metaphor.

This was the primary method of storing digital assets in the early days of cryptocurrency. As digital assets grew more prominent, many investors decided to hold their crypto on exchanges or with other custodians – many of which are regulated businesses with licences and insurance.

Both Kraken and Coinbase have stated that they intend to comply with the law; however, both companies have stated publicly that they believe money should be uncensorable and that users should be protected from “unjust” asset seizures.


Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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