Last Updated on 58 mins by cryptoevent

In the aftermath of the FTX scandal, there was a surge of industry leaders pointing to self-custody and keeping crypto tokens in secure hard wallets and off crypto platforms. Binance CEO Changpeng “CZ” Zhao advocated cryptocurrency self-custody as a human right. Although leading industry influencers advise it, there have been warnings from others that it is not a viable option for all users and not a sustainable path for crypto storage in the future of digital finance.

Ethereum co-founder Vitalik Buterin noted on Twitter that self-custody still poses risks as smart contracts are not fully protected against bugs or disruptions. He explained:

The “centralized everything is evil by default, use defi and self-custody” ethos has done very well this week, but remember it also comes with risks: bugs in the smart contract code.

Important to protect yourself against:

* Keep the code simple
* Audits, formal verification etc
* Defense in depth

— vitalik.eth (@VitalikButerin) November 16, 2022

Tom Dunleavy, analyst at crypto data platform Messari, echoed some of Buterin’s views, noting that the better solution for security isn’t necessarily self-storage, but good regulation with secure and transparent centralized storage.

We need to be brutally honest in times like these and come out of our bubble

Self-custody is not and never will be desired by 95% of the population

If we want to onboard BILLIONS of users, we need to do safe, transparent, and trusted custody work

That means good regulation

— Tom Dunleavy (@dunleavy89) November 11, 2022

Watchdog Capitals’ Bruce Fenton pointed out the limitations of self-storage from an inheritance perspective. In a thread of tweets examining tests to see how next of kin could retrieve tokens in the event of a death in the family, he tweeted:

“Custody without an inheritance plan is incomplete. It is not a gift to anyone.”

The argument surrounds the idea of ​​mass cryptocurrency adoption. When the average user relies on an exchange rather than self-storage to keep their funds, strong security protocols and even stronger regulations to protect funds are required. If they rely on self-custody of their tokens, education in this area needs to increase to ensure users understand the shortcomings of smart contracts and the potential risks involved.

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