All these reports about crypto wallets being frozen are very deceptive. With the way these things are being reported, it makes me wonder if they’re purposely attempting to delegitimize crypto. If they’re not, then uninformed journalists are doing a really poor job of researching and understanding the subjects that they are reporting.
Crypto wallets cannot be frozen.
What they’re doing is freezing accounts associated with those wallets – or most specifically – crypto exchange accounts, not wallets. Big difference.
For example, if you created an account through a crypto exchange service like Coinbase, Newton, Kucoin, Binance, etc., your wallet is managed by that service. In which case, the government can order that crypto exchange service to disable your account which was used to access the keys to your wallet. Without your account, you can’t access your wallet because your wallet was created by that company.
The wallet still would exist but you wouldn’t be able to access it anymore because the account associated with your wallet is frozen.
Technically, what has happened is that a sanction has been placed against these particular crypto wallet addresses. They have made it unlawful for businesses to do business with these particular crypto wallet addresses.
This is why cold storage wallets like Ledger or wallets like Metamask are key.
They are accessed directly by you and you hold the keys. No third parties are involved and there is no way for your access to be removed (unless you forget/lose your keys).
No third parties involved. No companies or exchange services that can disable your account and block your access to your wallet. Your wallet and keys are owned directly by you.
The simple rule of thumb is:
- Use exchanges and accounts like Kucoin, Kraken, Newton to trade or as an on-ramp to purchase crypto, but nothing else.
- Use cold storage wallets (like a Ledger) for holding (like a savings account).
If you purchased Bitcoin on an exchange like Kucoin or Newton and don’t plan on trading but are holding long-term, it’s much safe to transfer your Bitcoin to a wallet like Ledger for safekeeping.
With all that being said, it should always be remembered that Bitcoin is not private. Anonymous – yes, to a certain extent if you rotate addresses – but not private.