Crypto Wallet's and their compliancy with law enforcement

doomloop

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Quote from: Frabenesh on November 19, 2021, 01:27:25 PM

If a law enforcement agency approached a wallet provider such as Coinbase, regarding acquiring information about the account holder, do they comply? I would understand why Coinbase would, but what ones specifically do not? If anyone knows, let me know.

Well, centralized exchanges are still really good. Mostly, all these things are just for security purposes, but sometimes the government are fond of digging in too much. And another reason why a lot of people don’t like centralized exchanges, and giving out information about themselves is because platforms like this can get hacked, and users’ information will be exposed.

As for whether they would give out information about you to government agencies, there’s every possibility that they would. Such information are being gathered for the government, so why wouldn’t they give it out if there should be a request for it? Although this wouldn’t be something that you should be worried about if you are not involved in any kind of shady stuff. But sometimes it’s also good to live a private life, which is why a lot of people would consider a decentralized platform.

Haunebu

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It all basically comes down to how familiar you are with crypto wallets and the convenience factor op. If you don't mind being asked for KYC(Under specific situations), custodial wallets like Coinbase etc are what you're looking for.

On the other hand, if you don't want anyone else apart from you to know about your funds, non-custodial wallets like Exodus etc are what you're looking for. You need to safely store the recovery phrase though since losing it can screw you over.

If you are planning on storing huge amounts, I advise sticking to HW wallets. If not, stick to non-custodial wallets are the next best option.

Kakmakr

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Coinbase is a US company and they have to adhere to KYC/AML regulations... so you do not even have to think about their actions when they are approached by law enforcement agencies. I think Coinbase will hand over the information..even if they do not get subpoena for it, because they do not want the government to close their doors. Roll Eyes

The law enforcement agencies will get tipped off about illegal activities and then they will follow the "red tape" to make a legal arrest. (The courts will require that the correct procedures were followed to acquire the evidence) Roll Eyes

kryptqnick

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Quote from: Frabenesh on November 20, 2021, 09:11:36 AM

Thanks to all those who replied to the thread, the information is very useful to me.

Regards,
Anon.

Yeah, they'll comply, but it's not limited to them. I believe most reputable exchanges that require KYC will do the same thing upon request from the law enforcement because that's what complying with anti-money laundering regulation means. So storing Bitcoin is one thing, and you can store it safely, but trading with it or selling it for fiat can prove to be way trickier in terms of keeping privacy because reputable exchanges usually ask for IDs this way, and there's no reason to believe they won't share this information once they're asked to do this.

Frabenesh

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Thanks to all those who replied to the thread, the information is very useful to me.

Regards,
Anon.

bL4nkcode

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Quote from: joniboini on November 20, 2021, 12:20:56 AM

Is there a reason why hw is not an option though? Because you can't directly trade on it?

More like it needs to bought first?

Anyway, to op, there are lots of wallets available (mostly mentioned already above) to use if your main concern is the intervention of the authority. It just a matter of your understanding between wallets and exchanges.

Quote from: suzanne5223 on November 20, 2021, 02:15:00 AM

Quote from: hatshepsut93 on November 19, 2021, 10:27:42 PM

Coinbase is not a wallet, it's an exchange service.

Yes, Coinbase is an exchange site but they created a custodial wallet that functions like a Trust wallet, and the only difference between the two wallets is that trust wallets are non-custodial.

There's no difference between custodial wallet to CEX if in question is user's privacy and the involvement of the law which is the main issue of OP.

suzanne5223

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Quote from: Frabenesh on November 19, 2021, 01:27:25 PM

Hello.

My query is very simple. If a law enforcement agency approached a wallet provider such as Coinbase, regarding acquiring information about the account holder, do they comply?

Coinbase is the worse exchange and wallet provider when it comes to KYC issues and giving their customers private information to the law enforcement agency and this is the reason why the US sec credit them above other exchange sites.

Quote from: hatshepsut93 on November 19, 2021, 10:27:42 PM

Coinbase is not a wallet, it's an exchange service.

Yes, Coinbase is an exchange site but they created a custodial wallet that functions like a Trust wallet, and the only difference between the two wallets is that trust wallets are non-custodial.

joniboini

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Is there a reason why hw is not an option though? Because you can't directly trade on it? If that's the case, I suggest you read more about exchanges and wallets so that you can understand the risk of using a custodial wallet as mentioned above. I'd rather pay for a hundred bucks to buy a hw than use a custodial wallet as my cold wallet. As for how to sell/buy some coins, that's another problem that you can solve through various means.

mk4

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Quote from: Quickseller on November 19, 2021, 11:27:20 PM

Right, it might serve as a honeypot for crypto users in locations that are authoritarian, such as China. On the other hand, HW suppliers are less likely to be subject to the authority of authoritarian governments.

To the extent that you believe your government will not become authoritarian, I think buying a HW wallet should be safe.

Yeap. And if governments would actually want a list of crypto users, just grabbing a list from centralized exchanges like Coinbase is a lot more of a no-brainer for them; since unfortunately only a small minority use HW wallets(and non-custodial wallets in general) to start with.

dothebeats

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I think all of them would comply if the law enforcement has the necessary papers to conduct investigation, otherwise they won't budge. Also, you have to have committed a crime involving huge sums of money for the law enforcement to refer to exchanges on your trading history and other such related information.

Personally, I would limit my activities on exchanges and try to seek P2P traders near me whenever I can. Or, if you know that you aren't breaking any laws, why be paranoid anyway? Just go the hardware wallet route and store your own keys.

Quickseller

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Quote from: mk4 on November 19, 2021, 11:14:09 PM

Quote from: Quickseller on November 19, 2021, 11:07:13 PM

A list of customers is going to do very little for law enforcement because the overwhelming majority of crypto users are law abiding, even if they tend to go to great lengths to maintain their privacy.

IMO, someone buying a HW wallet is insufficient evidence to suggest that someone has committed a crime and as such any warrant based on this will be invalid.

Oh sure; there's a really low likeliness of the data being used by law enforcement in a bad way due to lack of data. But it doesn't change the fact that HW sellers are a honeypot for data of people that are at least slightly interested in cryptocurrencies.

Right, it might serve as a honeypot for crypto users in locations that are authoritarian, such as China. On the other hand, HW suppliers are less likely to be subject to the authority of authoritarian governments.

To the extent that you believe your government will not become authoritarian, I think buying a HW wallet should be safe.

mk4

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Quote from: Quickseller on November 19, 2021, 11:07:13 PM

A list of customers is going to do very little for law enforcement because the overwhelming majority of crypto users are law abiding, even if they tend to go to great lengths to maintain their privacy.

IMO, someone buying a HW wallet is insufficient evidence to suggest that someone has committed a crime and as such any warrant based on this will be invalid.

Oh sure; there's a really low likeliness of the data being used by law enforcement in a bad way due to lack of data. But it doesn't change the fact that HW sellers are a honeypot for data of people that are at least slightly interested in cryptocurrencies.

adzino

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Quote from: Frabenesh on November 19, 2021, 01:27:25 PM

Hello.

My query is very simple. If a law enforcement agency approached a wallet provider such as Coinbase, regarding acquiring information about the account holder, do they comply? I would understand why Coinbase would, but what ones specifically do not? If anyone knows, let me know.

Before someone comments it, hardware wallet's such as Trezor's etc are not an option.

Thanks.

Yes, they will hand over the information and will comply with the law enforcement agencies. They are allowed to provide their services to different countries only if they follow the rules of their country. And one of the rules is to collect data of the users and allow the government/law enforcement agencies to use them when needed.
The only way to avoid this is to use your own non custodial wallet where you own the keys of your wallet. All other custodial wallet services might at one point make you go through KYC or else they will just keep your funds frozen.

Quickseller

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Quote from: mk4 on November 19, 2021, 10:53:59 PM

As for hardware wallet manufacturers, the only thing law enforcement can do is to ask for the complete list of their customers(full names, addresses, contact numbers, etc). Which in itself isn't a good thing either; though a lot less worse than exchanges since there's no way for them to know how much crypto you have.

A list of customers is going to do very little for law enforcement because the overwhelming majority of crypto users are law abiding, even if they tend to go to great lengths to maintain their privacy.

IMO, someone buying a HW wallet is insufficient evidence to suggest that someone has committed a crime and as such any warrant based on this will be invalid.

mk4

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If you're talking about the Coinbase exchange, then they will comply even if they don't want to. If you're talking about Coinbase the non-custodial wallet, it's going to depend on how much data they're collecting through the software, and how much data they end up having about a certain person.

As for hardware wallet manufacturers, the only thing law enforcement can do is to ask for the complete list of their customers(full names, addresses, contact numbers, etc). Which in itself isn't a good thing either; though a lot less worse than exchanges since there's no way for them to know how much crypto you have.

hatshepsut93

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Coinbase is not a wallet, it's an exchange service. It was not created to store your crypto, so it's a big misconception to think that it is an option equal to software or hardware wallets.

To answer your question, I think it depends on which law enforcement agency asks them. If it's FBI, they will be much more likely to answer than if it was, let's say Belarusian police.

Quote from: Frabenesh on November 19, 2021, 01:27:25 PM

Before someone comments it, hardware wallet's such as Trezor's etc are not an option.

Thanks.

Your account being frozen at demand from law enforcement is just one of the risks of centralized exchanges. They can get hacked, your online machine can get hacked, you can become a victim of phishing and so on.

jossiel

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If they are operating under the jurisdiction of the law enforcer then they have to obey and do and give what they're asking for.

IIRC, there's already this thing that has happened and Coinbase has turned over or giving access to the authority if they're going to ask for their customers info.

Yogee

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Quote from: Frabenesh on November 19, 2021, 01:27:25 PM

...I would understand why Coinbase would, but what ones specifically do not? If anyone knows, let me know.

Do not search for them since none of the custodial wallet or exchanges will refuse to the request of these authorities. If some platforms tell you they won't then they are just lying just to get your deposits. They may avoid it temporarily but they will eventually give in.

Quickseller

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Quote from: Frabenesh on November 19, 2021, 01:27:25 PM

My query is very simple. If a law enforcement agency approached a wallet provider such as Coinbase, regarding acquiring information about the account holder, do they comply? I would understand why Coinbase would, but what ones specifically do not? If anyone knows, let me know.

Are you referring to the coinbase wallet? Or someone who has a coinbase custodial account (someone who has an account at coinbase.com)?

The coinbase wallet is a software in which the end user has sole access to the private keys. If law enforcement were to approach coinbase about someone they believe is using the coinbase wallet, coinbase would have no way of knowing which person is even using their wallet. On the other hand, someone with an account at coinbase.com merely has a database entry on coinbase's servers indicating their balance. Someone with a coinbase.com account could potentially be under investigation, and coinbase would have various information about the account holder that could be turned over to law enforcement, given a legal process authorizing them to do so.

Fatunad

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Quote from: Frabenesh on November 19, 2021, 01:27:25 PM

Hello.

My query is very simple. If a law enforcement agency approached a wallet provider such as Coinbase, regarding acquiring information about the account holder, do they comply? I would understand why Coinbase would, but what ones specifically do not? If anyone knows, let me know.

Before someone comments it, hardware wallet's such as Trezor's etc are not an option.

Thanks.

When it comes in talks of custodial wallets then they are simply regulated and centralized which means they do abide laws and regulations which they would commonly be following on whats been ordered or on whats been asked. So if they do decide on not to comply or totally ignoring on whats been requested? thats simply means it will be the closure of business as simple as that.

Havent you seen for example on how Binance turns out to be a KYC asking platform now on where back on the days on where you could make out some cashouts
without being verified?

Regulations becomes even more tighter as we do go ahead which is something not really that surprising.

Japinat

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Quote from: Frabenesh on November 19, 2021, 01:27:25 PM

Hello.

My query is very simple. If a law enforcement agency approached a wallet provider such as Coinbase, regarding acquiring information about the account holder, do they comply?

They will because they are regulated, but the regulator would only ask for information from Coinbase if they are looking for a suspected wallet or person that might link with the coinbase. All regulated exchanges are required to comply with the regulatory requirements, basic requirements are KYC as it's necessary for tracing or investigation when fraud or money laundering is committed by a certain person or entity.

Quote from: Frabenesh on November 19, 2021, 01:27:25 PM

I would understand why Coinbase would, but what ones specifically do not? If anyone knows, let me know.

Before someone comments it, hardware wallet's such as Trezor's etc are not an option.

Thanks.

use electrum, it's completely safe based on my experience as long as you don't go to phishing sites to upgrade your wallet and no KYC requirement for using this wallet.

Bitcoin_Arena

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Avoid custodial wallets like Coinbase.com or Blockchain that can block your funds and ask for KYC. Obviously if law enforcement agencies approached a wallet service like coinbase which has an AML policy, they will readily provide them with your information. Instead you should focus on noncustodial wallets like electrum or Bitcoin core which is a full node.

Frabenesh

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Hello.

My query is very simple. If a law enforcement agency approached a wallet provider such as Coinbase, regarding acquiring information about the account holder, do they comply? I would understand why Coinbase would, but what ones specifically do not? If anyone knows, let me know.

Before someone comments it, hardware wallet's such as Trezor's etc are not an option.

Thanks.

Topic: Crypto Wallet's and their compliancy with law enforcement (Read 185 times)