Bitcoins are entries on a ledger, which you can transfer by signing a message with a key. The keys are typically a master key encoded as a 12 or 24 word seed ph

Bitcoins are entries on a ledger, which you can transfer by signing a message with a key. The keys are typically a master key encoded as a 12 or 24 word seed phrase, from which the actual keys are then derived. What this regulation is targeting isn't the holding or sharing of the keys itself, but the use of exchanges to convert between cryptocurrency and fiat (regular) money. They want to restrict/regulate (mostly monitor for now, but more regulation is likely to follow) a) the ability to send Bitcoin that you bought on an exchange to your own wallet, i.e. your ability to get Bitcoin that you actually control yourself with said text file b) the ability to send Bitcoin from such a wallet to an exchange to turn them into "regular money".