OCC recommend banks to offer private key vaults to customers

Vickysagar

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Quote from: sokani on May 31, 2023, 07:05:56 AM

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...safely and effectively hold either the cryptocurrency itself, or the key to access crypto on a personal digital wallet for its customers.

"Safely and effectively holding the cryptocurrency?" Are you kidding me... I cannot entrust my digital assets or keys to a third party agent, what's the difference between the bank and a crypto exchange? What if an hacker finds his way into the banking system and steals the cryptocurrencies? Of what used then is the idea of not your keys, not your coins. Also, I cannot save my private keys or seed phrase in a storage facility that advertises or provides storage services for crypto clients because such facilities could be targeted by armed robbers.

The best method is for you to be the custodian of your private keys and in charge of your digital assets.

Exactly. But I think regular people might use that, sometimes even if they have crypto they still trust government moves. Damn, we can just look how much crypto is being kept on exchanges and that says everything.

sokani

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...safely and effectively hold either the cryptocurrency itself, or the key to access crypto on a personal digital wallet for its customers.

Are you kidding me? How safe can the cryptocurrency be stored? I cannot entrust my digital assets or private keys to a third party agent, what's the difference between the bank and a crypto exchange? What if an hacker finds his way into the banking system and steals the cryptocurrencies? Of what used then is the idea of not your keys, not your coins. Whether the private keys or seed phrase is written on a piece of paper or on a metallic steel, I cannot save my private keys or seed phrase in a storage facility that advertises or provides storage services for crypto clients because such facilities could be targeted by armed robbers.

The best method is for you and only you to be the custodian of your private keys and in charge of your digital assets.

bluebit25

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The OCC recently issued guidance recommending that banks provide customers with the option to use individual safe deposit boxes. I do not have personal opinions or feelings, but I can provide some information on this issue. The OCC's recommendation is aimed at providing customers with an additional layer of security for their valuable possessions, as well as helping to prevent issues such as identity theft and fraud. By allowing customers to store their belongings in private safe deposit boxes at the bank, rather than in a communal box, the risk of theft or loss is reduced.

While the decision to offer individual safe deposit boxes ultimately lies with each individual bank, the OCC's guidance provides a framework for addressing the security concerns of bank customers. It remains to be seen how many banks will choose to implement this recommendation, but it is clear that the issue of customer security is a top priority for banking regulators.

Lucius

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Quote from: Darker45 on May 30, 2023, 09:25:29 PM

It's a bit complicated. Definitely, FDIC or the bank's insurance don't cover it. But it can be insured. I'm not aware of the specifics, though.
In the event of a bank theft or robbery, then the insurance activates. I'm pretty certain it covers such incidents.
Theft and robbery on bank's safety deposit boxes happen once in a blue moon. The same can't be said about residences.

Maybe the content can be insured, but I don't believe that most people do that, and as for the fact that it doesn't happen often, maybe it's in the interest of the banks that such news is not made public at all. Besides, whoever says that the contents of the safe deposit box must be robbed in the classic way, it can be seized by the police at any moment, as was the case in California. It is true that most of them got their content back, but only after lawsuits.

Quote from: Darker45 on May 30, 2023, 09:25:29 PM

In addition to keeping our mouth shut, perhaps time will come when we might even do away with Bitcoin stickers, Bitcoin paintings, Bitcoin mugs, and anything that gives the robber an idea that we have Bitcoin. If the robber knows that you have Bitcoin, it doesn't anymore matter where you hide your seed phrase in your house. He/she only has to cut your finger to have it.

That time has come a long time ago, at least since the price of BTC gained value in the last 5-6 years. I understand people's need to emphasize the sign BTC, but that way they only draw attention to themselves, and in that case they must be prepared for possible consequences. As for burglars, I have a "shoot first, ask questions later" policy, so I don't worry too much about someone threatening me like that.

Darker45

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Quote from: Lucius on May 30, 2023, 05:34:06 AM

Quote from: Darker45 on May 29, 2023, 09:39:09 PM

If it's a physical vault, I actually don't mind keeping my encrypted private keys in there. I can also pay an insurance for it depending on how much value I declare. It's fire-proof. It's locked. It has alarms. I guess a bank vault would be much safer than keeping 3 written copies of your seed phrase somewhere in the house. If you are keeping a copy of your seed phrase at the back of a painting, underneath your table, or in a plastic bag a foot below the ground in your backyard, I think a bank's vault is better.

Can the value of something you deposit in a bank safe be insured at all? As far as I know, banks don't want to know what you keep there, and neither do clients want to declare the value of something that is there. In addition, in the event that thieves break into the bank and take all the contents of the safes, you have lost everything there, and you cannot prove that there was a seed there that gives you access to x BTC.

It's a bit complicated. Definitely, FDIC or the bank's insurance don't cover it. But it can be insured. I'm not aware of the specifics, though.

In the event of a bank theft or robbery, then the insurance activates. I'm pretty certain it covers such incidents.

Theft and robbery on bank's safety deposit boxes happen once in a blue moon. The same can't be said about residences.

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I would still believe more in my own insurance of such sensitive information, and if you do everything right and keep your mouth shut, then the risk is minimal even when and if thieves come into your living space. If someone already chooses a safe in a bank, then it makes sense to keep part of the seed in a private location, and part in the bank, so the risk is lower.

In addition to keeping our mouth shut, perhaps time will come when we might even do away with Bitcoin stickers, Bitcoin paintings, Bitcoin mugs, and anything that gives the robber an idea that we have Bitcoin. If the robber knows that you have Bitcoin, it doesn't anymore matter where you hide your seed phrase in your house. He/she only has to cut your finger to have it.

southerngentuk

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Depository services offered by banks can bring convenience and familiarity to customers who already deal with them. It simplifies the process of accessing and managing cryptocurrencies for those who may not be technically inclined or prefer the extra security measures associated with traditional financial institutions. However, there are valid concerns regarding the security of keeping a client's private key. They should understand that by using custodial services, they are entrusting their private keys and the security of their assets to the bank. So if not managed securely and if mishandled or compromised, it can lead to significant losses for customers.

jrrsparkles

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Quote from: Accardo on May 29, 2023, 09:01:13 AM

The Office of the comptroller of the currency in an article provides different ways that banks can impact cryptocurrency or bitcoin. In one of their letters, they advised banks that bitcoin can help them make more profits, but one of the suggested business ideas is awkward in the cryptocurrency sense.

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Custody Services

In July, the OCC stated that banks and savings associations could provide crypto custody services for customers, including holding unique cryptographic keys associated with accessing private wallets. This means that the OCC believes that banks could safely and effectively hold either the cryptocurrency itself, or the key to access crypto on a personal digital wallet for its customers.

If the bank adopts such a business technique of impacting the cryptocurrency space, it could help the market, but it's not advisable for banks to hold their customer's private keys; the security can be guaranteed since they save different assets for people too. If a hacker gets to their database, unless they save it in a paper, it'll be disastrous. Hence, I see positive reactions to the idea, many banking customers getting into crypto is a good wave, entering the market on the wrong side is a disadvantage to them.

At the end of the day it's nothing but you're giving your private keys to someone so called trusted banking system which brings the assets to become vulnerable to the system or authority who is having your keys can access your funds, along with if someone get access to those keys will be more dangerous so what bitcoin tells us is "Be your own Bank" so stop looking for someone else to take the responsibility of holding your money.

Lucius

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Quote from: Darker45 on May 29, 2023, 09:39:09 PM

If it's a physical vault, I actually don't mind keeping my encrypted private keys in there. I can also pay an insurance for it depending on how much value I declare. It's fire-proof. It's locked. It has alarms. I guess a bank vault would be much safer than keeping 3 written copies of your seed phrase somewhere in the house. If you are keeping a copy of your seed phrase at the back of a painting, underneath your table, or in a plastic bag a foot below the ground in your backyard, I think a bank's vault is better.

Can the value of something you deposit in a bank safe be insured at all? As far as I know, banks don't want to know what you keep there, and neither do clients want to declare the value of something that is there. In addition, in the event that thieves break into the bank and take all the contents of the safes, you have lost everything there, and you cannot prove that there was a seed there that gives you access to x BTC.

I would still believe more in my own insurance of such sensitive information, and if you do everything right and keep your mouth shut, then the risk is minimal even when and if thieves come into your living space. If someone already chooses a safe in a bank, then it makes sense to keep part of the seed in a private location, and part in the bank, so the risk is lower.

isaac_clarke22

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Quote from: davis196 on May 30, 2023, 12:53:45 AM

The guy, who proposed this BS idea(banks holding private keys) clearly doesn't understand the concept of Bitcoin and cryptocurrencies in general. The big problem here aren't even the hackers. The bank could just enter the crypto wallets of it's customers and steal their crypto.
It's like inviting a burglar into your house and giving him the key to your safe deposit box. It doesn't make any sense.
And no, this idea won't speed up crypto adoption, because the possibility of getting scammed will scare away many people.
The people aren't dumb.

Even adoption itself is kinda meh for me, not that I do not like inviting people to crypto but I just do not want authority to adopt crypto and try to make it centralized it for people around them. Doing KYC in some digital payments here in my country was already a pain in the ass and now having it into crypto would be more pain in the ass, I just want me, just me alone, to keep my money to myself.

Not sure why OCC advises this. Even in common banks security guidelines, nobody would ever ask for your ATMs PIN Number and now at this instance, you're literally going to give away your PIN, which is PK in this instance, to them for "security".

davis196

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If the bank adopts such a business technique of impacting the cryptocurrency space, it could help the market, but it's not advisable for banks to hold their customer's private keys; the security can be guaranteed since they save different assets for people too. If a hacker gets to their database, unless they save it in a paper, it'll be disastrous. Hence, I see positive reactions to the idea, many banking customers getting into crypto is a good wave, entering the market on the wrong side is a disadvantage to them.

The guy, who proposed this BS idea(banks holding private keys) clearly doesn't understand the concept of Bitcoin and cryptocurrencies in general. The big problem here aren't even the hackers. The bank could just enter the crypto wallets of it's customers and steal their crypto.
It's like inviting a burglar into your house and giving him the key to your safe deposit box. It doesn't make any sense.
And no, this idea won't speed up crypto adoption, because the possibility of getting scammed will scare away many people.
The people aren't dumb.

lewisrafael40

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Banks holding my private keys? No thanks! I trust my cat more with my crypto secrets. Meowtual security experts, you know.

digaran

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A BIG lol for banks! We are trying to move past you guys and let you die off as a soon to be forgotten history of the past, but now they want to come with us into the future?

Why don't you print more money and keep it safe, huh! Just mind your own business, we'll do the same as we were!

rat03gopoh

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Quote from: Accardo on May 29, 2023, 09:01:13 AM

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including holding unique cryptographic keys associated with accessing private wallets.

Wouldn't that open up more opportunities to be stolen? While I haven't gauged how advanced the bank's security is, for sure it will allow multiple parties access to their storage. The main and important rule, "do not share your privkeys with anyone, including your pet who has a strong memory"

Something made me somewhat laugh from the shared article,

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Why Banks are Cautious of Cryptocurrencies
AML/KYC Concerns
This type of pseudonymity worries many banks who are concerned about the lack of anti-money laundering (AML) and know your customer (KYC) regulations surrounding digital currency transactions. Oftentimes, banks are under the impression that cryptocurrency transactions can’t be tracked for AML and KYC considerations, which could lead to illegal activity and scams on the network.

Maybe they forgot about the term anti-money laundering, money (fiat) is issued by banks and most of the world's fiat money circulation is in digital, they think by what method was this kind of crime committed if not using banking facilities? So far, I've never heard the term "Crypto Laundering"

Darker45

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If it's a physical vault, I actually don't mind keeping my encrypted private keys in there. I can also pay an insurance for it depending on how much value I declare. It's fire-proof. It's locked. It has alarms. I guess a bank vault would be much safer than keeping 3 written copies of your seed phrase somewhere in the house. If you are keeping a copy of your seed phrase at the back of a painting, underneath your table, or in a plastic bag a foot below the ground in your backyard, I think a bank's vault is better.

Ojima-ojo

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Quote from: Doan9269 on May 29, 2023, 11:59:39 AM

Quote from: Accardo on May 29, 2023, 09:01:13 AM

The Office of the comptroller of the currency in an article provides different ways that banks can impact cryptocurrency or bitcoin. In one of their letters, they advised banks that bitcoin can help them make more profits, but one of the suggested business ideas is awkward in the cryptocurrency sense.

Bitcoin will really definitely be a game changer if the banks will be allowed to make cryptocurrency transactions in places where it has been restricted, it will also serves a synergy between the two of them that will encourage the bitcoiners to have more commitment to the use of banks and every bank user to have same opportunity of using bitcoin and maintaining have a cryptocurrency account with them in the bank, just that banks will only have to maintain bitcoin alone in cryptocurrency inbothwr for them to maintain their reputation from other cryptocurrencies that end up along the way.

On a personal note, i think bitcoin is ok the way it is right now and there is no need for futher bank involvement in it safe keepings, because Bitcoin is meant to be a self custody asset and does not need any third-party involvement and the role the bank plays are unnoticed and limited.

Most at times that is why banks are against Bitcoin since there is the place for them to rake in profits from Bitcoin directly only when they do direct investments in Bitcoin,

Zaguru12

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Quote from: Accardo on May 29, 2023, 09:01:13 AM

If the bank adopts such a business technique of impacting the cryptocurrency space, it could help the market, but it's not advisable for banks to hold their customer's private keys; the security can be guaranteed since they save different assets for people too. If a hacker gets to their database, unless they save it in a paper, it'll be disastrous. Hence, I see positive reactions to the idea, many banking customers getting into crypto is a good wave, entering the market on the wrong side is a disadvantage to them.

There are two sides to this, first it is defeats entirely the idea of decentralization in cryptocurrency or rather bitcoin. Because this doesn’t really differs from someone that trust online storage services like password mangers or storing them on emails and the rest because this leads straight to losing of one’s key if the platform or bank gets compromised. Also ones fund go be confiscated easily by the government Should they decide to go back and against cryptocurrency. They would just get the keys or seeds from the bank without your knowledge.

This method would only be used by people that are not after anonymity or it’s like, or are scared to store their keys them selves. It could also be used in multi sig wallets, where a set of the key will be stored there. But still it Carries the risk which is advice against on centralized exchanges

famososMuertos

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Banks guard many types of assets, so their priority is income, profits are above ideals, so don't be surprised that synthetic bitcoin is invented, if someone doesn't understand me, remember triple AAA synthetic ... bbb... c, etc. then it's a matter of time.

But it doesn't matter as long as those who accede to this kind of goodness from banks know what they are doing, then the question is who is the troy horse in this case.

Accardo

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Quote from: The Cryptovator on May 29, 2023, 03:20:41 PM

I don't understand why we should entrust the keys to our non-custodial wallets to a custodial bank. The concept seems nonsensical to me. I wouldn't store anything related to cryptocurrency, such as private keys, in such a place. However, I agree that hardware wallets could be a suitable option for storage if necessary. With hardware wallets, it's important to note that none of the funds can be moved from the device without the password. Nevertheless, I personally don't feel secure storing my seeds or private keys with a third party.

Yeah, storing hardware wallets is also among the services, just that holding private keys won't sit right with any experienced cryptocurrency trader. But, a good advantage to this is that the family of a deceased person can claim and assess the coin of their brethren. The rule is that nobody should hold our keys, but in a service like this we can also know if the bank accesses our cryptocurrency, and make any transaction. So, it looks like a good idea, because it's not like fiat where the bank controls the digits shown to customer and make use of their money for businesses. In an idea like this customers can pay service fees for storing their private key in the bank.

wxa7115

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Quote from: Lucius on May 29, 2023, 09:32:51 AM

It is not a new idea, it has been talked about for years and some banks have already received permission to do exactly what you are writing about now. Of course, such a method of access is very easy for the bank's clients, but completely pointless if it is a custodial service, similar to any CEX that many use as a "crypto bank".

People who do not buy Bitcoin to use it as a currency and only want profit without too much worry will certainly choose this option, only that first of all they should be warned about all the risks arising from the custodial service. Banks will certainly (at least some) accept to enable this kind of service, but storage and fees in that case will certainly not be negligible.

The only benefit I see in this way of purchase is that the client does not have to do a new KYC, given that the bank already knows all the information, and if they also gave clients the option of withdrawing to non-custodial wallets, it would be a solid option for many who are looking for easy way to enter the crypto market.

Things could be even worse than what we imagine, since it is possible banks will offer not only to hold those coins for their clients but they could also offer several investment products based on bitcoin, then what is stopping them from using their old tricks and perform fractional banking, lend the majority of that bitcoin and create a lot of “paper bitcoin” this way?

So if at some point the economy is not doing well and people want to withdraw their bitcoin they could find out they do not have any bitcoin at all, or in other words by trusting banks then the same problem we have with fiat will emerge, so people should never trust those services no matter how attractive banks try to make them seem.

Z-tight

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Quote from: Accardo on May 29, 2023, 09:01:13 AM

If the bank adopts such a business technique of impacting the cryptocurrency space, it could help the market, but it's not advisable for banks to hold their customer's private keys; the security can be guaranteed since they save different assets for people too. If a hacker gets to their database, unless they save it in a paper, it'll be disastrous. Hence, I see positive reactions to the idea, many banking customers getting into crypto is a good wave, entering the market on the wrong side is a disadvantage to them.

Since the bank operates a fractional reserve system with their customers fiat, i don't think they'll want to just keep people's private keys for them without having access to use it for trading and investments, this is just the same thing as storing your funds in a centralized exchange, it may be better though, because i think banks are more reliable than exchanges, but nevertheless, it is a no.

Store your BTC's in your Self custody wallet where you don't need the permission of the bank or any institution to spend it because you own the keys. BTC was not created to be stored in the bank, but to be owned and controlled by only the owner.

Topic: OCC recommend banks to offer private key vaults to customers (Read 253 times)