- Coinbase’s ex-CTO is concerned about the government misusing tech giants to retrieve private keys.
- Struggling governments may force tech giants to search for private keys.
- US and Chinese governments hold significant Bitcoin and digital assets.
On May 19, the ex-CTO of Coinbase expressed concerns about the potential misuse of these tech giants by the government, stating that they pose significant security risks. According to him, there is a possibility that the government might exploit the situation by “backdooring” iPhone and Android devices to retrieve private keys.
Balaji pointed out a potential scenario where financially struggling governments resort to Bitcoin for funding, leading the U.S. government to potentially coerce tech giants such as Apple and Google into searching for private keys within their servers, browsers, and devices.
This isn’t cyberterrorism, it’s cyberwar. It’s not some random hacker who manages to sneak out a file. It’s when the CEO of a company gives the lawful order to to hack their customers. This is similar to what happened to 140M Russians designated enemies of the state in early 2022 — every tech company turned on their former customers.
Balaji srinivasan
In such a dystopian future, Balaji suggested that the majority of tech companies would have no option but to comply with the government’s demands. According to him, the Linux operating system would be the only relatively secure choice for crypto users, despite its limitations.
After Balaji’s statement, several people highlighted the idea that cryptocurrencies might require their own dedicated phones, with the Solana phone being suggested as a potential option. However, some individuals raised concerns about the practice of storing private keys on phones, as it is generally considered to be a poor security practice due to the lack of end-to-end encryption in both Google and Apple app stores.
Based on currently available information, it is reported that both the U.S. and Chinese governments possess significant amounts of Bitcoin and other digital assets.
To provide some context, the U.S. government reportedly holds more than 200,000 units of BTC, with an approximate value of $6 billion. The majority of these Bitcoin holdings were acquired through confiscations related to cases such as the Silk Road BTC seizure and the Bitfinex hack confiscation, among others.
U.S. Government Bitcoin Holding
At an earlier point in the year, the U.S. government took control of digital assets worth $260,000 from an individual involved in an NFT phishing scam. The seized assets comprised two NFTs, namely Bored Ape 9658 and Doodle 3114, which held a combined value exceeding $200,000.
According to a previous report by BeInCrypto, it was stated that the Chinese government holds around 194,775 BTC, with an estimated value of approximately $3.9 billion. As of November 2022, the Chinese government’s cryptocurrency holdings, including Bitcoin, Ethereum, and others, were worth $6 billion.
Similar to the U.S., China acquired a significant portion of its BTC holdings through the seizure of funds related to the PlusToken Ponzi scheme.
