Security Briefing: Failed custodians — where are they now?

Security Briefing: Failed custodians — where are they now?

by Team Casa 2 years ago 3 min read

It feels like forever since FTX and other custodians went under. Have we learned anything?

Specter of custodial failures looms over bitcoin market

Can you believe bitcoin was $15k not even two years ago? The crypto credit crunch of 2022 and other custodial flubs can seem like ancient history when bitcoin is hovering close to the previous all-time high.

Meanwhile, several prominent industry figures are paying a different price and working their way through the justice system:

Other leaders have simply moved onto other things. Scott Purcell, the founder of ill-fated custodians Prime Trust and Fortress Trust has started another startup reportedly unrelated to crypto.

Mark Karpeles, the former CEO of Mt. Gox, the OG of bitcoin custodial failures from a decade ago, is reportedly forming a new European exchange called EllipX.

🔑 Key Insight: Companies and CEOs come and go, but the theme of custodial risk remains the same. Many thought we'd never see a collapse like Mt. Gox ever again. Then, FTX blew up. Has the industry changed for good now? We'll keep our self-custody in the meantime.

Think twice before handing your phone to authorities

It's official: smartphones have taken over just about everything. Unless you've been living deeply off-grid for the last decade, your phone has likely become the primary portal for your daily life.

Whereas you may have carried a phone and a wallet in the past, phones are replacing wallets with features like Apple Pay and new digital ID programs governments are unveiling worldwide. The idea is you can carry a digital credential instead of a physical driver's license or similar proof.

But should you hand over your phone to police like you would with a physical ID? Not unless it's required by law. Someone can do a lot if they have unlocked access to your phone, whether it's going through photos, reading your messages, or probing mobile wallets.

🔑 Key Insight: Civil liberties vary a lot across jurisdictions, so it's worth knowing your rights wherever you are. In the U.S., police typically need a warrant to search phones. The Verge has other interesting analysis here.

Listen: Securing against human nature with Jameson Lopp

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How can we architect systems that honor and preserve human freedom? This is at the crux of Jameson's lifelong quest as a cypherpunk.

Today, that goal is being tested on many fronts, whether it's bitcoin held with custodians or privacy at the individual level. Jameson recently tackled these subjects on the Logos Podcast for a wide-ranging discussion.

💡 Security tip: Did you know you can use a YubiKey to secure your Apple ID or Google account? This provides you with a much more robust form of 2FA than SMS messages. Here are setup instructions for Apple and Google devices.