Coinbase, the United States’ largest cryptocurrency exchange, announced a $430 million quarterly loss and a 19% plunge in monthly users in its first-quarter financial report.
The new rules set by SEC, the US Securities and Exchange Commission came as a surprise to millions of Coinbase users and gave rise to concerns about using the Coinbase platform.
Its earnings report for Tuesday, May 03, 2022 Coinbase revealed that the company held $256 billion worth of fiat and crypto currency for its clients. The exchange also warned that crypto assets held in trust for clients might be subject to bankruptcy proceedings. Coinbase users would be deemed “generic unsecured creditors,” with no legal standing to demand any specific property from the exchange.
Coinbase advised clients that they could lose all cryptocurrency in their accounts if the exchange goes bankrupt.
Sounds scary right, but let’s hope that this won’t happen.
One of the key selling points emphasized by blockchain advocates worldwide is that an individual’s ownership of cryptocurrency is meant to be immutable and absolute.
Coinbase users can store cryptocurrency in either a Coinbase controlled wallet or custodial wallet. However, this implies users are giving up some control.
A private key is the long string of characters used to secure access to crypto wallets. The cryptocurrency in the wallet can’t be accessed without the key. Coinbase is the owner of the private key, and clients have a standard password that allows them to access funds in their wallet. This setup allows users to have easier access to their accounts, by using a shorter password. Coinbase will ultimately determine whether or not a customer can access these assets.
Coinbase CEO and founder Brian Armstrong stated on Twitter that the exchange faced “no risk of bankruptcy” and that the disclosure was required according to new regulations set by the U.S. Securities and Exchange Commission regarding public companies that hold digital assets on behalf of others.
Armstrong tweeted that “This disclosure makes sense in that these legal protections have not been tested in court for crypto assets specifically,” adding that it was possible, though unlikely, that a court would consider customer assets as part of the corporation in bankruptcy proceedings, even if it harmed customers.
It seems like the best way to store your digital assets is in a non custodial wallet. In this instance, you have complete control over all of your funds and your private keys. You are responsible for securing your crypto assets and ensuring their security.
Learn more about the non-custodial digital wallet. To avoid losing ownership of your crypto assets, you can read on.
Let’s get started!
What is a non-custodial wallet?
Non-custodial cryptocurrency wallet is one that allows only the owner to access the keys and has full control. Individuals who desire full control of their money can choose a non-custodial crypto wallet. There are no middlemen so you can trade crypto right from your wallet. It’s an excellent choice for seasoned traders and investors who know how to manage and safeguard their private keys and seed phrases.
When using a decentralized exchange (DEX) or a decentralized application (DApp), you’ll need a non-custodial wallet. PancakeSwap and QuickSwap are some of the most popular decentralized exchanges.
CoinStats is a non-custodial wallet provider. MetaMask and ZenGo are examples. Trust Wallet also offers these services. Remember that these wallets are your sole responsibility for protecting your private keys and seed phrase.
The Reasons You Should Move Your Money to Non-Custodial Wallet
These are the top benefits to storing your cryptocurrency in an uncustodial wallet
Asset Security
There is minimal to no risk of a remote hack because all data related to a user’s crypto wallet and its funds are under the user’s control. Due to their security and inherent safety, many individuals are moving away from custodial alternatives for crypto trading. Instead they prefer decentralized exchanges that allow cryptocurrency trading.
Your Keys and Coins
These non-custodial pockets have gained popularity due to their ability to provide users with autonomy and self-sovereignty. Users don’t need authorization from a third party to manage assets or conduct transactions. It is easy to send and receive crypto by having complete control of your private keys.
Transact instantly
Non-custodial wallet transactions are faster, since they don’t require the authorization of any middlemen or centralized authority.
Compatibility with DeFi
For most decentralized financial platforms, and for permissionless blockchain protocols, you will need a non-custodial account to interact with them. In recent years, the number of DeFi apps, such as DEXs and lending platforms, has risen dramatically.
Hardware and software wallets
These non-custodial wallets may be further classified as hardware wallets, or software wallets.
Non-custodial Hardware wallets
These simple, non-custodial hardware pockets, also known as cold wallets or external drives, look just like an external drive and store your private keys offline. Accessing assets in non-custodial Hardware wallets requires that users plug them into their computers. Users then manually verify transactions using the device.
Hacks and computer viruses are not threats to hardware wallets. However, it is important that private keys be kept safe to minimize the chance of theft. Non-custodial physical wallets are the best choice for users who hold large quantities of crypto assets and those seeking long-term investments. Trezor, Ledger and Ledger have been the most widely used non-custodial Hardware wallets.
Software Wallets that are not custodial
Examples of non-custodial software pockets include Web browser wallets, or apps that are downloaded on mobile devices or PCs. These non-custodial wallets can access most public blockchains directly and only require users to give their passwords or private keys to unlock stored assets. Unlike cold wallets which have no access to private keys, online access is possible for your private keys. CoinStats and MetaMask are just a few examples of non custodial software wallets.
Users with substantial assets or plans to secure their money in a volatile market will find a non custodial wallet the most suitable option. Based on investment preferences, users can select their non-custodial preferred wallet (hardware and software).
Get CoinStats Wallet
CoinStats Wallet supports more than 8000 cryptocurrencies as well as various blockchain networks like Bitcoin, Ethereum Mainnet and Polygon. Note:These are only the current networks available, and more will be added in due time!
This allows you to securely export your keys. It gives you total control of both your DeFi and Crypto portfolio.
You can easily manage your DeFi and cryptocurrency assets with CoinStats Wallet.
If you are interested in trading on crypto exchanges actively, you can store your assets for the entire day. You might want to transfer your coins to a non custodial wallet such as CoinStats Wallet to protect them.
What’s the Bottom Line?
Non-custodial wallets are the best. They connect you to either a Blockchain or an exchange. These wallets give you complete control of your keys and allow for minimal intervention by external parties. In addition to being more secure and eliminating third-party risk, non-custodial wallets provide you with access to more cryptocurrencies and let you buy cryptocurrency directly and trade anonymously.
Our CoinStats blog provides information about cryptocurrency exchanges, wallets, portfolio trackers and tokens. We also offer in-depth buying guide for various cryptocurrency such as How To Buy DeFi Pulse Index.
Investment advice DisclaimerInformation on this site is for your informational purpose only. CoinStats does not endorse any recommendation to sell, buy or hold securities or financial products. This information does NOT constitute financial advice or trading advice. Information on this website is not based on any financial institution. It may be different from information you get from service providers.
Market risk can include the loss of principal. Because cryptocurrency can fluctuate and is sensitive to secondary activities, it’s important to do independent research and seek advice. You should never invest more than what you can afford. CFD trading, stock trading, and cryptocurrency trading can present significant risk. CFD trading can cause losses of between 74-89% in retail investor accounts. It is important to consider all aspects of your financial situation before you make any investments. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant regulators’ websites before making any decision.