• A former Coinbase executive warned the crypto community of the role tech companies could play in crypto seizure
  • He underlined the risk posed by these companies because of their access to operating system
  • Last month, G7 finance ministers released a statement highlighting the importance of regulation of crypto assets

Former Coinbase chief technology officer Balaji Srinivasan has warned crypto holders about a potential betrayal by Apple, Google, Microsoft and other prominent tech companies should governments all over the world decide to seize digital assets or cryptocurrencies.

The 43-year-old American entrepreneur and investor issued the warning over the weekend, suggesting that in case of an economic downturn, operating system access of top tech companies could work against crypto holders.

"The biggest risk factor for that is actually Apple, Google and Microsoft because they have operating system access. That's actually what I'm most concerned about: it is the fact that Apple has software updates and Google can get into your Google Drive and Microsoft has Windows, and if ordered by the state, in theory, they could scan your hard drive for private keys and then pull your digital assets," the former Coinbase executive said during the thought-provoking interview at Impact Theory podcast.

The statement came while he was discussing the potential impacts of China and G7 countries obtaining the authority to seize digital assets or cryptocurrencies.

"G7 countries are going to have a real problem, and they're going to be harder for money and then a lot of the world hinges on whether or not the G7 countries and China can seize digital assets. If they can, that's like one branch point in history. It means that you have total states [into] CBDCs (central bank digital currencies) and so on and so forth," he said.

During the conversation, the former Coinbase executive raised the question, "will asset seizure be possible in the digital world?"

"If they cannot [seize assets], then you have a different branch point in history where it means that communities can now basically have digital gold or cryptocurrency and crowdfund bits of territory where they can have their own startup societies and eventually what I call 'network states,'" he further said.

Last month, the Financial Action Task Force (FATF) received muted support from finance ministers of G7 and reaffirmed its commitment to regulation, oversight and crypto assets monitoring.

"We look forward to the FSB's finalization of its high-level recommendations by July 2023. We commit to implementing effective regulatory and supervisory frameworks for crypto-asset activities and markets as well as stablecoin arrangements, which are consistent with the FSB's recommendations and standards and guidance established by SSBs," G7 Finance Ministers and Central Bank Governors said in a manifesto during a meeting in Niigata, Japan, in May.

"We support the FSB and SSBs conducting follow-up work on decentralized finance (DeFi) and multifunction crypto-asset intermediaries. In light of the growing threats from illicit activities, in particular by state actors, including the theft of crypto-assets for proliferation financing, ransomware attacks, terrorist financing, and sanctions evasion, we support initiatives by the Financial Action Task Force (FATF) on accelerating global implementation of the FATF Standards on virtual assets, including the "travel rule", and its work on merging risks, including from DeFi arrangements and peer-to-peer transactions. We also look forward to the FATF's fourth progress report on virtual assets and further work on these initiatives," the statement read.

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