Former Coinbase CTO Balaji Srinivasan warned that if G7 nations allow crypto seizure, tech giants like Apple, Google, and Microsoft could assist in the process. Srinivasan pointed out that operating system access of top technology companies could prove bad news for crypto holders in case of an economic downturn.
Srinivasan’s cautionary statement comes while discussing the possible effects of the G7 countries and China acquiring the authority to seize digital assets. In the conversation, the executive questioned, “Will asset seizure be possible in the digital world?”
G7 Regulations Could Impact Crypto Seizure Policies
The American businessman and investor emphasize how digital giants may assist the government in scanning devices to find and turn over private keys to law enforcement. According to Srinivasan, these internet giants pose a big risk for potential crypto seizures because of their control over our gadgets and data.
When asked by the state, they could search your hard drive for secret keys and then extract your digital assets.
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He pointed out, “The fact that Apple has software updates and Google can get into 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 pull your digital assets.”
G7 Released a Joint Statement for Crypto Oversight
The Financial Action Task Force (FATF) efforts have received recent backing from the G7 finance ministers. The G7 reaffirmed its commitment to efficient oversight, regulation, and monitoring 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.
Additionally, the ministers recognized the emerging risks associated with decentralized finance (DeFi) arrangements and peer-to-peer transactions, endorsing the FATF’s efforts to address these risks.
Srinivasan suggested in a tweet from 2021 that the G7 seeks to preserve the status quo and avoid change.
The author warned two years ago that it’s a trend to watch out for in centralized collusion against decentralized defection.
Impact of Regulations on G7 and G20 Countries
Every G7 country treats cryptocurrency per current or upcoming frameworks. For instance, the EU’s Markets in Crypto-Assets Regulation (MiCA) is slated to go into effect in 2024. Meanwhile, as various crypto bills go through Congress, the United States is implementing securities laws to bring digital assets within its jurisdiction.
Rajagopal Menon, VP of WazirX, expressed to BeInCrypto that the G20 countries have more at stake than the G7 in terms of the impact of unregulated digital assets.
He noted,
“G20 comprises of nations which are low in the Human Development Index as compared to G7. Still, the vast benefits of crypto cannot be overlooked for developing countries providing scope of financial inclusion, better access to credit markets, etc., unless it is regulated it will be a utopian concept on paper and a whole different scenario on the ground, putting investors and economies at risk.”
However, it has yet to be seen how this sector would be governed and whether the advantages of decentralization would diminish with government oversight.
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