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Canada Warns Crypto Exchanges Not to Promote Self-Custodial Wallets

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The CEOs of two of the most prominent cryptocurrency-trading platforms, Coinbase and Kraken, sent tweets that appeared to offer advice on how crypto users could evade restrictions on funding by taking crypto off exchanges into self-custody. The OSC’s manager of public affairs Kristen Rose said that the regulators are “aware” of posts from Powell and Armstrong, which criticized Canada’s invocation of the Emergencies Act and advocated for non-custodial crypto wallets. 

Non-custodial wallets allow individuals to control their cryptocurrency directly without the need of a third party, which would make it difficult for law enforcement to freeze or seize assets. The emergency orders announced Monday require financial players, including the likes of Coinbase and Kraken, to continually monitor activity related to “designated persons” and report it to law enforcement. The order lists “designated persons” as people who “use, collect, provide, make available, or invite a person to provide” property in support of protestors.

Kraken CEO Jesse Powell tweeted out on Feburary 6th that he donated just over one full bitcoin with the value of just about $51,000 at the time to HonkHonk Hodl, the fundraiser supporting the truckers convoy. After being contacted for comment by The Logic, Kraken did not respond but Powell tweeted that Kraken will be “forced to comply” with the requests from law enforcement to freeze customer assets. This led to Powell tweeting “we cannot protect you. Get your coins/cash out.”  Below are the tweets from Armstrong and Powell which have been sent to Canadian law enforcement. 

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Brandon is a data analyst who enjoys writing about bitcoin and finance. He is the co-founder of Green Candle Investments, a bitcoin and finance media company.

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