Former Coinbase CTO Balaji Srinivasan has warned that if G7 countries allow crypto seizures, tech giants like Apple, Google and Microsoft could join in the process. Srinivasan pointed out that access to the operating system of top tech companies could prove to be bad news for crypto holders in the event of an economic downturn.
Srinivasan’s warning comes as she discusses the possible effects of G7 countries and China gaining power to seize digital assets. During the conversation, the executive asked, “Will asset seizure be possible in the digital world?”
G7 Regulations Could Impact Crypto Seizure Policies
The American businessman and investor highlights how digital giants can help the government scan devices to find and hand over private keys to law enforcement. According to Srinivasan, these internet giants pose a significant risk of potential cryptographic seizures due to their control over our gadgets and data.
At the request of the state, they could search your hard drive for secret keys and then extract your digital assets.
He pointed out: “The fact that Apple has software updates and Google can access your Google Drive and Microsoft has Windows; and if ordered by the state, in theory they could scan your hard drive for private keys and then extract your digital assets.
The G7 released a joint statement for crypto oversight
The efforts of the Financial Action Task Force (FATF) recently received support from G7 finance ministers. The G7 reaffirmed its commitment to effective oversight, regulation and oversight of crypto assets in a joint statement last month.
They highlighted the importance of enforcing the “travel rule,” which requires virtual asset service providers (VASPs) to share customer information during transactions.
In addition, Ministers acknowledged the emerging risks associated with Decentralized Finance (DeFi) arrangements and peer-to-peer transactions, endorsing FATF’s efforts to address these risks.
Srinivasan suggested in a 2021 tweet that the G7 seeks to preserve the status quo and avoid change.
The author warned two years ago that this is a trend to watch in centralized collusion versus decentralized defection.
Impact of regulations on G7 and G20 countries
Each G7 country processes cryptocurrency under current or upcoming frameworks. For example, the European Crypto-Asset Markets Regulation (MiCA) is expected to come into force in 2024. Meanwhile, as various crypto bills go through Congress, the United States is implementing laws on securities to bring digital assets into their jurisdiction.
Rajagopal Menon, vice president of WazirX, told BeInCrypto that the G20 countries have more at stake than the G7 in terms of the impact of unregulated digital assets.
He noted,
“The G20 includes nations whose human development index is low compared to the G7. Yet the vast benefits of crypto cannot be overlooked for developing countries offering scope for financial inclusion, better access to credit markets, etc. Unless it is regulated it will be a utopian concept. on paper and a completely different scenario on the ground, putting investors and economies at risk.
However, it remains to be seen how this sector would be governed and whether the benefits of decentralization would diminish with government control.
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