Don't Let an Asset Freeze Threaten Your Crypto
9 Jul 2023
How to shield your crypto and NFTs from an asset freeze
Nothing strikes fear into the heart of crypto investors like the term “asset freeze.” So when the SEC tried to freeze the assets of 678,000 Binance.US users in June of 2023, the anxiety felt by crypto investors worldwide was palpable. Read on to learn what happened and how to protect your assets with Gridlock.
In an ongoing case against Binance, the SEC attempted to place a restraining order that would freeze the assets of Binance’s American arm. A US District Judge thwarted the freeze, but the threat of an asset freeze by the most powerful regulator against the largest crypto exchange is nothing short of chilling.
Source: CoinTelegraph
It is not just Binance that the SEC has gone up against this year, either. Current cases against Kraken, Gemini, and Coinbase have also brought fear into crypto markets. Once trusted for storing crypto assets, centralized exchanges like these are quickly losing ground to self-custody options for storage.
Source: Glassnode
We are now in a changing era of crypto security. Not only do we need to protect our crypto holdings from scammers, phishing schemes, and rug pulls, but a fair share of regulatory risk has come into play. With blockchain-based financial applications coming under the gun, we have to make sure our Web3 assets have the best protection possible - especially in the case of an asset freeze.
Crypto investors and search for safe storage
Cryptocurrencies and other digital assets that are held on centralized exchanges like Binance are subject to the SEC and other US regulatory laws anytime they come into contact with US investors and holders. Additionally, with the USD still being the reserve asset internationally, what goes in US markets often has massive ripple effects (pun definitely intended).
Source: @EasyEatsBodega on Twitter
Since the US has been on a tear against crypto this year with what many are calling “Operation Chokepoint 2.0”, investors are getting their crypto assets off exchanges en masse. More than ever, they are adhering to the famous phrase: Not your keys, not your coin.
Self-custody can be a complex process
Holding and securing the private keys to your crypto can be quite complicated. It may require you to use a combination of hard wallets and mobile wallets, which introduce new attack vectors. Additionally, when you self-custody you run the risk of losing or damaging your device or losing the private keys. But then again, that’s probably why we started using exchanges to hold our crypto in the first place!
Crypto enthusiasts are searching for simple and secure self-custody solutions like Gridlock Wallet to protect their holdings. Up until recently, most options for securing your crypto required too much technical know-how and an often unrealistic level of personal responsibility.
Why Gridlock is the right solution for today
As a leading-edge crypto wallet, Gridlock employs advanced technologies to bring crypto asset protection to a new level. Blockchain ledgers, smart contracts, and advanced cryptography enable Gridlock Wallet users to easily store their own crypto.
- Multi-Party Computation (MPC): Gridlock leverages advanced MPC technology to divide the private keys into shards that are distributed across multiple parties. No single party has complete access to the user's assets, ensuring the highest level of security.
- Threshold Signature cryptography: Utilizing threshold signatures means multiple parties must sign off on a transaction before it can go through, reducing the risk of asset theft or loss.
- Social Verification: This is where trusted individuals or devices, known as 'Guardians', can be designated to protect distributed key shards. This feature adds an extra layer of personal protection to user assets.
Crypto holders getting their cryptocurrencies and NFTs off centralized platforms now have a safe place to store their valuable assets.
Gridlock’s use of advanced wallet technologies helps make crypto self-custody not only safe but also easy and convenient. No one is telling you to run a node or server and verify your own transactions, something too technical for most people. Instead, Gridlock makes ultra-safe storage doable by the masses.
By implementing a system of trusted Guardians that the wallet owner selects as a protective network, Gridlock has created a social recovery wallet that stands the test of time - and even protects against the threat of an asset freeze!
How it works
- Distributed key generation
With a Gridlock wallet, a private key is generated by dividing it into distributed fragments called “key shares.” These key shares are securely stored on trusted devices known as “Guardians”. Importantly, no single Guardian can access the complete private key or the crypto assets. Ever.
- Guardians enable distributed storage
Each Guardian holds only one fragment of the key on their device and is completely unaware of the other key shares. This distributed storage mechanism adds an extra layer of security by ensuring that the private key cannot exist in its entirety in any single location.
- Gridlock users have full control
In the Gridlock Wallet system, the wallet owner possesses the most authoritative key share and maintains ultimate control. They have the ability to assemble the key shares whenever necessary for transactions or key recovery processes.
- Safe and secure
Even in the event of a lost seed phrase, a predetermined threshold number of key shares can be used to reconstruct it. This is achieved through a simplified Social Verification process, which allows for simplified key recovery while maintaining security.
The secure way to self-custody is with Gridlock
Unlike traditional wallets, Gridlock ensures that private keys are generated and stored across multiple trusted devices, minimizing the risk of unauthorized access and potential loss of funds.
Because it's so convenient and easy to use, Gridlock represents the perfect self-custody solution for the masses of users seeking shelter from the SEC’s threats.
Gridlock puts the security of crypto assets back into the hands of users with a simplified, ultra-secure solution.
Download Gridlock today and keep all your assets secured. From Bitcoin to altcoins, to NFTs, your crypto holdings have the ultimate protection.
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Written by Reid Zedkongor
Reid Zedkongor is peeling away layers of confusion around blockchain and cybersecurity. With a computer engineering background, he can dive into the details of crypto complexities to make crypto adoption easy for everyone. In his free time, he often reads fiction or enjoys a good laugh over a beer.