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This seems like a good time for a refresher on government protections because there seems to be a lot of confusion about this. FDIC [1] is a government insuran

by jmyeet 4y ago

This seems like a good time for a refresher on government protections because there seems to be a lot of confusion about this. FDIC [1] is a government insurance scheme on depositors' funds (up to a limit) with any FDIC-inssured bank of financial institution in case of insolvency. SIPC [2] is the equivalent for brokerages and protects your cash holdings and securities. Coinbase recently gave a warning [3] that crypto assets could be lost in the event of an insolvency. They also said they don't consider that remotely likely. But the point of that disclosure is that crypto is NOT an SIPC-protected asset. The crypto mantra of "not your keys, not your coins" [4] is showing itself to be true. I don't know what the outcome will be of anyone who has any assets in Celsius. It sounds like getting them out now may well be impossible but I haven't read this thoroughly so who knows? Maybe it's too late for Celsius account holders. But I'd strongly advise anyone who holds crypto with any custodian to move it to your own wallet for your own protection. [1]: https://www.fdic.gov/ https://www.fdic.gov/ [2]: https://www.sipc.org/for-investors/introduction https://www.sipc.org/for-investors/introduction [3]: https://cryptoslate.com/coinbase-bankruptcy-wording-triggers-warnings-to-move-crypto-off-exchanges/ https://cryptoslate.com/coinbase-bankruptcy-wording-triggers... [4]: https://medium.com/stakefish/not-your-keys-not-your-coins-fad3d43c2713 https://medium.com/stakefish/not-your-keys-not-your-coins-fa...

justin66 4y ago
There is also the NCUA, which insures deposits at federal credit unions. https://www.ncua.gov/ https://www.ncua.gov/
razemio 4y ago
Just an addition for non tech users. You should NOT hold your own keys, if you are not up to the task. Consider an exchange with a good record instead and within your "legal region". My recommendation would be Kraken or if you are based in Germany bitcoin.de. Both do not have a single incident which was major and have been doing it for years. The risk that you loose you coins because you are not able to secure your system is higher, then keeping them on an exchange. Using a hardware wallet is also a risk. You can loose it, forget your pin or store your backup pass phrase in an unsave / unstable location. For example in a excel sheet or WhatsApp text message to yourself.
- joosters 4y ago
  The downsides of "Be Your Own Bank"...
- strickman 4y ago
  It's lose man, lose. Not loose.
  - razemio 4y ago
    Thanks, -fixed- (can't edit anymore) noted.
- prox 4y ago
  Isn’t/Wasn’t the whole deal of crypto that you don’t need a third party anymore? Otherwise it’s just a bank with extra steps it seems to me.
  - x55j33 4y ago
    Yes, very true. However when people forget the passphrase to their wallet and lose access to their funds, suddenly they don't want to be their own bank anymore, they want a name and number to yell at down the phone until it comes back.
  - razemio 4y ago
    Not entirely. A few other use cases: - workaround to not pay Western Union's fees - investment - trading - protection against inflation - money to buy goods from (sometimes questionable) places - money to buy digital goods - NFT Stuff
    - prox 4y ago
      5 out of 7 I can do already. Western Union and NFT are the use cases I can see as unique. Although wasn’t there an NFT exchange where I can buy in dollars now? That’s not to say it should be mutually exclusive, but it’s not unique and probably simpler with hard currencies. And probably more safe guarded as well.
latchkey 4y ago
On Friday, I had the California Franchise Tax Board empty one of my bank accounts without any notice. They graciously left $0.01 in there. I am not a tax dodger, I pay all my taxes and I've never had an issue anything like this in my nearly 50 years on this planet. They sent me a certified letter to an old address informing me of this the day after they did it. Claiming I owed taxes for a period when I wasn't even living in the country. This is some sort of mistake on their end that my accountant is going to have to sort out this week. You can laugh at crypto all you want and say 'not your keys, not your coins'... but this event is taking a whole new meaning for me. I agree, Celsius and centralized services are bad, but it isn't like the government is any better. Don't think you're safe with your 4 letter acronyms. It is all fun and games until something like this happens to you. Luckily they emptied the wrong account (which had little money in it) and I rushed to the bank to empty out the account with most of my money in it. Now I get to deal with the cashflow stress of it all.
- petesergeant 4y ago
  That sucks, but you have legal recourse and are likely to get every cent back.
  - latchkey 4y ago
    We will see... I've never had to sue the government before. It seems like an extreme action to have to take after the fact. They also took a $125 'fee' out as well. I get the feeling I won't see that again. Regardless, it has left me shaken. Now, I really don't trust things at all. On the good side, I did recently win the 4 bogus parking tickets that I've gotten in the last 6 months. So maybe I'll have good luck with this too!
  - tgsovlerkhgsel 4y ago
    Except for overdraft fees/late payment fees resulting from it, and likely no compensation for other losses resulting from having your money unavailable and for the wasted time.
    - 4y ago

by jmyeet 4y ago

justin66 4y ago

There is also the NCUA, which insures deposits at federal credit unions. https://www.ncua.gov/ https://www.ncua.gov/

razemio 4y ago

Just an addition for non tech users. You should NOT hold your own keys, if you are not up to the task. Consider an exchange with a good record instead and within your "legal region". My recommendation would be Kraken or if you are based in Germany bitcoin.de. Both do not have a single incident which was major and have been doing it for years. The risk that you loose you coins because you are not able to secure your system is higher, then keeping them on an exchange. Using a hardware wallet is also a risk. You can loose it, forget your pin or store your backup pass phrase in an unsave / unstable location. For example in a excel sheet or WhatsApp text message to yourself.

joosters 4y ago
The downsides of "Be Your Own Bank"...
strickman 4y ago
It's lose man, lose. Not loose.
- razemio 4y ago
  Thanks, -fixed- (can't edit anymore) noted.
prox 4y ago
Isn’t/Wasn’t the whole deal of crypto that you don’t need a third party anymore? Otherwise it’s just a bank with extra steps it seems to me.
- x55j33 4y ago
  Yes, very true. However when people forget the passphrase to their wallet and lose access to their funds, suddenly they don't want to be their own bank anymore, they want a name and number to yell at down the phone until it comes back.
- razemio 4y ago
  Not entirely. A few other use cases: - workaround to not pay Western Union's fees - investment - trading - protection against inflation - money to buy goods from (sometimes questionable) places - money to buy digital goods - NFT Stuff
  - prox 4y ago
    5 out of 7 I can do already. Western Union and NFT are the use cases I can see as unique. Although wasn’t there an NFT exchange where I can buy in dollars now? That’s not to say it should be mutually exclusive, but it’s not unique and probably simpler with hard currencies. And probably more safe guarded as well.

latchkey 4y ago

On Friday, I had the California Franchise Tax Board empty one of my bank accounts without any notice. They graciously left $0.01 in there. I am not a tax dodger, I pay all my taxes and I've never had an issue anything like this in my nearly 50 years on this planet. They sent me a certified letter to an old address informing me of this the day after they did it. Claiming I owed taxes for a period when I wasn't even living in the country. This is some sort of mistake on their end that my accountant is going to have to sort out this week. You can laugh at crypto all you want and say 'not your keys, not your coins'... but this event is taking a whole new meaning for me. I agree, Celsius and centralized services are bad, but it isn't like the government is any better. Don't think you're safe with your 4 letter acronyms. It is all fun and games until something like this happens to you. Luckily they emptied the wrong account (which had little money in it) and I rushed to the bank to empty out the account with most of my money in it. Now I get to deal with the cashflow stress of it all.

petesergeant 4y ago
That sucks, but you have legal recourse and are likely to get every cent back.
- latchkey 4y ago
  We will see... I've never had to sue the government before. It seems like an extreme action to have to take after the fact. They also took a $125 'fee' out as well. I get the feeling I won't see that again. Regardless, it has left me shaken. Now, I really don't trust things at all. On the good side, I did recently win the 4 bogus parking tickets that I've gotten in the last 6 months. So maybe I'll have good luck with this too!
- tgsovlerkhgsel 4y ago
  Except for overdraft fees/late payment fees resulting from it, and likely no compensation for other losses resulting from having your money unavailable and for the wasted time.
  - 4y ago