No More FTXs! Consensus 2023 Attendees Discuss Future of Crypto Custody

FTX's collapse reignites the self-custody debate with Consensus 2023 attendees in an excerpt from CoinDesk’s first-ever Consensus @ Consensus Report.

AccessTimeIconJun 7, 2023 at 1:00 p.m. UTC
Updated Jun 7, 2023 at 5:07 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

After the implosion of FTX, the conversation about trusting centralized bodies with crypto keys returned to the limelight. Several million customers are still waiting to reclaim somewhere between $1 billion and $10 billion worth of crypto assets tied up in the Bahamas-based exchange, according to the initial bankruptcy filings.

The collapse reminded people that self-custodying your own digital assets, by keeping the cryptographic keys (on their own computers, or a hardware device disconnected from the internet, or even written on a piece of paper locked in a safe), would spare consumers from being burned by schemes like FTX.

This article is excerpted from CoinDesk’s inaugural Consensus @ Consensus Report, the product of intimate, curated group discussions that took place at Consensus 2023.

Crypto purists have long argued that self-custody is the only way to go and that having control over one’s own keys avoids the perils of centralization. But crypto users have often observed that custodying one's keys is nerve-wracking, as there are few recovery mechanisms in place if users lose their keys.

A closed-door roundtable conversation at Consensus 2023 looked at how policymakers can create effective guidelines for consumer protection without undermining, and perhaps advancing, the crypto ethos of controlling your own assets. Participants hailed from a variety of backgrounds, from technology to regulation to business.

The challenge is acute. Consider the responses to a poll question posed to the broader Consensus audience: What percent of users have skills/comfort to store crypto keys?

Of the 169 attendees who answered the electronic survey, slightly more than half (54%) answered that less than 10% of crypto users were competent and comfortable storing their own keys.

With that reality as the backdrop, the private discussion at Consensus, conducted among four groups seated at roundtables, tackled the following questions including whether centralized institutions will always play a massive role as custodians for the industry…


Get the Consensus @ Consensus 2023 Report

Complete the form below to access the latest trends, analysis and insights gathered from the intimate group discussions that took place at Consensus 2023.

*Required information

By clicking "Sign Up", you agree to receive newsletter from CoinDesk as well as other partner offers and accept our terms of services and privacy policy.


Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Margaux Nijkerk

Margaux Nijkerk reports on the Ethereum protocol and L2s. A graduate of Johns Hopkins and Emory universities, she has a masters in International Affairs & Economics. She holds a small amount of ETH and other altcoins.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.