Decentral Block Post

While self-custody is considered the ultimate way to secure one’s funds, many fail to acknowledge the risks associated with physically storing seed phrases. A search conducted by the State Police agency for Nevada ended up making a suspect’s seed phrase public after being picked up by the body cam.

A viral video making rounds on Twitter showed two police officers searching a suspect’s car and coming across pieces of paper. It turns out, the suspect was a strong believer in self-custody as unfolding the pieces of paper revealed the suspect’s seed phrase, which was hand-written — a popular method to prevent online compromises.

As the incident got recorded by one of the officer’s body camera, the suspect’s seed phrase has now become public information.

Binance CEO Changpeng ‘CZ’ Zhao saw the video and warned investors about learning the various risks involved in different methods of storing cryptocurrencies. He said:

“I am a proponent of free choice. Feel free to hold your crypto anyway you wish. But learn the risks of each method.”

Coinbase CEO Brian Armstrong has pushed for stricter regulations on centralized crypto actors but says decentralized protocols should be allowed to flourish given that open-source code and smart contracts are “the ultimate form of disclosure.”

Armstrong shared his views on cryptocurrency regulation in a Dec. 20 Coinbase blog where he proposed how regulators can help “restore trust” and move the industry forward as the market continues to recover from the damage done by FTX and its shock collapse.

But decentralized protocols aren’t part of that equation, the Coinbase CEO emphasized.

“Decentralized arrangements do not involve intermediaries [and] open-source code and smart contracts are “the ultimate form of disclosure,” Armstrong explained, adding that on-chain, “transparency is built in by default” in a “cryptographically provable way” and as such should be largely left alone.

The Coinbase CEO said that “additional transparency and disclosure” checks are needed for centralized actors because humans are involved, with Armstrong hoping FTX’s fall “will be the catalyst we need to finally get new legislation passed.”

Bitcoin (BTC) broke below $16,800 on Dec. 16, reaching its lowest level in more than two weeks. More importantly, the movement was a complete turnaround from the momentary excitement that had led to i$18,370 peak on Dec. 14.

Curiously, Bitcoin dropped 3.8% in seven days, compared to the S&P 500 Index's 3.5% decline in the same period. So from one side, Bitcoin bulls have some comfort in knowing that correlation played a key role; at the same time, however, it got $206 million of BTC futures contracts liquidated on Dec. 15.

Some troublesome economic data from the auto loan industry has made investors uncomfortable as the rate of defaults from the lowest-income consumers now exceeds 2019 levels. Concerns emerged after the average monthly payment for a new car reached $718, a 26% increase in three years.

Furthermore, the central banks of the United States, England, the European Union and Switzerland increased interest rates by 50 basis points to multiyear peaks — highlighting that borrowing costs would likely continue rising for longer than the market had hoped.

Uncertainty in cryptocurrency markets reemerged after two of the most prominent auditors suddenly dropped their services, leaving exchanges hanging. French auditing firm Mazars Group, which previously worked with exchanges including Binance, KuCoin and Crypto.com, has deleted a section devoted to crypto audits from its website.