Saturday longread: A bitcoin account cannot be frozen

Saturday longread A bitcoin account cannot be frozen

Thursday afternoon it was announced that the bank accounts of one of the largest anti-corruption organizations in Russia were frozen by the Russian government. The organization is called Anti-Corruption Foundation (FBK) and is led by Alexey Navalny, a Russian lawyer, political activist and opposition leader.

Bills frozen

The details are not entirely clear yet, but it seems that the bank accounts of Navalny and the FBK are all frozen. In addition, police raids have been carried out in recent weeks at many lawyers who have worked with the foundation. The reason is a criminal case by the Russian government against the FBK for alleged money laundering.

Russian officials deliberately accuse FBK staff of taking money from different people, depositing them into their personal accounts via ATMs, and then transferring the money to the FBK. It would amount to around $ 15 million from 2016.

No control over your money

Although it is difficult to find out whose story is true, you can draw two conclusions:

  1. Money laundering is still preferred by money launderers. Regardless of whether the FBK has actually laundered money, the government knows that this is the appropriate method for money launderers. Cash is difficult to trace and it is relatively easy to divide large amounts into small transactions over a period of several years.
  2. You lose control if you deposit money in a bank and you transfer your wealth to someone else. That is exactly what you do when you deposit money into a bank account. The bank takes your money and uses it for other purposes. But the bank can also be forced to freeze your account due to legal pressure such as in this scenario.
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Learn from crisis in Cyprus

There is not enough talk about this second problem. You could say that only criminals and dissonants run the risk that their accounts can be frozen, but that is not entirely true.

A good example occurred before our eyes in 2012 in Cyprus. Residents of the island were faced with a one-off bank levy (essentially a tax). This was a sort of final desperation attempt by the government to rake in more money. This naturally encourages anti-government sentiment, but more importantly, citizens no longer had control over their money. The confidence to save your money in a trusted and safe way has decreased as a result.

Not your keys, not your bitcoin

And now the bridge to bitcoin. Not your keys, not your bitcoin. If you store your bitcoin with a third party (such as an exchange), just like with euros, dollars or other fiat currency, then you ignore one of the nicest features that bitcoin is built for. By not transferring your private keys, but linking them to your own personal wallet, you always have complete control over your bitcoin. This ensures that you are not exposed to the systematic risks that occur in the regular banking system.

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Every time you hear or read in the news about bills being frozen, remember that this can happen to anyone. You do not have to be a criminal or to live in a country where there is a lot of corruption. By the way, there are more risks than your money being frozen. Your privacy information is also at stake.

Two examples from last week: Binance is extorted for 300 bitcoin because a hacker claims to have stolen images of passports from 60,000 customers. ABN AMRO has to screen all its customers against financial crime from De Nederlandse Bank.

For clarity’s sake, this article is not intended to warn of a global banking crisis, or of some catastrophic event. This article is meant to create awareness for a better solution than to keep your money in a bank.

With bitcoin you are your own bank and you control the risks yourself.


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