the Binance.US debacle; what does this mean for US citizens?

Dear fellow humans,

I am writing to you today with a heavy heart, fueled by a mix of frustration, disappointment, and genuine concern. The news I bring you is disheartening, but it is imperative that we face it head-on. Brace yourselves, for the landscape of our beloved digital assets, and the precious remaining freedoms we have, may be about to undergo a significant shift.

In this issue, I will address the alarming news regarding Binance.US and the United States Securities and Exchange Commission's recent actions. Together, we will delve into the gravity of the situation and explore practical steps you can take, within the bounds of the law, to protect your financial freedom and keep your cryptocurrencies secure.

If you don’t know me yet, most of my friends call me Eli. I’m an enthusiast of cutting-edge technology, and a firm proponent of decentralization. I wear many hats, but those two are the most relevant to us today. I've been following this recent news about Binance.US with growing concern. This is a major blow to the cryptocurrency community, and a definite sign of things to come.

What is Binance.US?

Binance.US is a digital assets exchange owned by Binance, the world's largest cryptocurrency exchange. Binance.US is registered with the Financial Crimes Enforcement Network (FinCEN) as a money services business. That’s pretty much all you need to know before the big news.

The SEC’s Attack on Crypto: A Prelude to Central Bank Digital Currency (CBDC)

Binance.US announced on June 8, 2023 that it would be suspending USD deposits due to pressure from the Securities and Exchange Commission (SEC). A halt on withdrawals may be put into effect as soon as June 13, 2023.

This recent announcement is concerning for many reasons. First, it is a sign that the SEC is cracking down on the cryptocurrency industry. Second, it could make it more difficult for US citizens to access and trade cryptocurrencies. Third, it could lead to a decline in the value of cryptocurrencies. Exactly what you’d want if you were a government introducing its own Central Bank Digital Currency (CBDC).

The SEC has been waging a war on cryptocurrency for years. They've sued exchanges, shut down projects, and even threatened to jail individuals. This latest move against Binance.US is just another example of their overreach.

Why CBDCs are inferior to the real deal:

Central Bank Digital Currencies (CBDCs) are, as you may have already guessed, digital currencies that are issued by central banks. They are designed to be a more efficient and secure way of conducting transactions. However, CBDCs have a number of disadvantages compared to 'real' cryptocurrencies, such as Bitcoin and Ethereum.

• CBDCs are centralized. This means that they are subject to government control. This could make them less secure and less resistant to censorship.

• CBDCs are not scarce. Central banks can create as many CBDCs as they want. This could lead to inflation and devaluation.

• CBDCs are not anonymous. All transactions made with CBDCs will be recorded on a public ledger. This could make it difficult to maintain financial privacy.

For these reasons, CBDCs are not a good substitute for 'real' cryptocurrencies. If you are looking for a secure, private, and decentralized way to store your money, then you should consider investing in something more decentralized, like Bitcoin (BTC), Ethereum (ETH), or Cardano (ADA).

Why Should We Be Worried? (The Centralization Conundrum)

I've learned the hard way not to keep my cryptocurrency on centralized exchanges for very long. I’ve lost more money than I’d care to admit when - on more than one occasion - the exchange I was using went bankrupt, or just froze transfers indefinitely (something Binance.US has done to me and many others). This is a risk that everyone who uses centralized exchanges faces. As long as there is an on-ramp for US Dollars to be exchanged for cryptocurrency, the government holds a significant amount of power over the platform, and the platform holds complete control over the user. If either party decides that its subordinate isn’t perfectly following their (sometimes unrealistic and arbitrary) rules, they can (and often will, in my experience) do whatever is necessary to assert control.

A suspension of USD deposits on Binance.US will make it more difficult for US citizens to access and trade cryptocurrencies. As far as I can tell, Binance.US is the largest crypto exchange that allows US citizens to deposit USD directly from their bank accounts. In the likely event that exchanges could no longer accept USD deposits, citizens will have to find other ways to fund their accounts, such as using a credit card or a wire transfer. This could make it more difficult and expensive for us to buy and sell cryptocurrencies. It’s just one more step down a slippery slope towards complete and total governmental control.

What Can We Do?

The Importance of Decentralization: Lessons from History

It is important to note that not all cryptocurrency exchanges allow US citizens to deposit USD directly from their bank accounts. Some exchanges may only allow you to deposit cryptocurrency, while others may require you to go through a third-party service to deposit USD. It is always best to check with the exchange directly to see what deposit methods are available.

That being said, the only way to reliably protect our cryptocurrency from the SEC and other corrupt governing bodies is to use decentralized exchanges. These exchanges are not subject to government control, and they offer a safe and secure way to trade cryptocurrency.

If you're a US citizen, there are a few things you can do to protect yourself from the SEC's attack on cryptocurrency.

1. Move your cryptocurrency to a decentralized exchange. This is the single most important thing you can do to protect your cryptocurrency from the SEC and other corrupt governing bodies. Decentralized exchanges are not subject to government control, and they offer a safe and secure way to trade cryptocurrency.

2. Educate yourself about cryptocurrency and decentralization. The more you know, the better equipped you'll be to protect yourself from the SEC and other threats.

3. Get involved in the cryptocurrency community. There are many ways to get involved, such as attending meetups, joining online forums, and donating to projects you believe in.

4. Contact your elected representatives and urge them to support legislation that would protect the cryptocurrency industry from government overreach.

Take Control of Your Assets: What’s In Your Wallet?

Private Keys: What are they, and how do I order one?

The first step to taking control of your digital assets is understanding what a private key is. Private keys are essentially long, randomly generated strings of characters that act as a password or a digital signature for your crypto holdings. They are mathematically linked to your cryptocurrency addresses, serving as a unique identifier for your ownership of the coins. Think of your private key as the key to your digital safe, granting you exclusive control over your funds.

There are many ways to store private keys, which may seem daunting to a crypto newbie. Actually, it’s not that complicated when you break it down! Keep reading, and we’ll learn about some of the most common and effective methods.

a. Hardware Wallets: The Safest Option

A hardware wallet is an offline device specifically designed to securely store your cryptocurrencies. It provides the highest level of protection against hacking attempts, as your private keys remain isolated from the internet. By using a hardware wallet, you can take full control of your assets and eliminate the risk of potential vulnerabilities associated with online exchanges. Popular hardware wallets include Ledger and Trezor, both reputable and widely used within the crypto community.

b. Software Wallets: A Convenient Alternative

Software wallets, also known as digital wallets, are applications that can be installed on your smartphone, tablet, or computer. While they offer convenience and ease of use, they are more susceptible to online threats compared to hardware wallets. While software wallets are not as secure as hardware wallets, they can still be a viable option if used cautiously. These wallets are applications installed on your computer or mobile device, allowing you to store your private keys locally. It's important to choose a reputable and well-audited software wallet, preferably a open-source one, and ensure your device is free from malware or keyloggers. If you choose a software wallet, ensure it comes from a trusted source and follow strict security practices such as enabling two-factor authentication and regularly updating your software.

c. Multi-Signature Wallets: Strengthening Security

Multi-signature wallets work on the principle of distributing control among multiple parties, typically involving two or more private keys. These keys are generated separately and held by different individuals or entities, which could include yourself, trusted friends, family members, or even professional custodians. To perform a transaction, a predefined number of signatures, often referred to as "M of N," must be provided. This ensures that no single person has complete control over your assets, adding a robust safeguard against potential breaches.

d. Paper Wallets: An Offline Solution

In the realm of cryptocurrency security, paper wallets offer an intriguing offline solution. As the name suggests, a paper wallet involves generating and storing your cryptocurrency keys on a physical piece of paper. This approach adds an extra layer of protection by keeping your private keys completely disconnected from the internet and vulnerable online threats. To create a paper wallet, you can use reputable offline tools or open-source software. Ensure that you generate the wallet in an offline environment, such as an air-gapped computer, to eliminate the risk of keyloggers or malware compromising your private key. Once you have generated the wallet, print it out and securely store it in a safe or a location known only to you.

Upholding Financial Independence: Legal Alternatives for Trading

While centralized exchanges have played a crucial role in the growth of the cryptocurrency ecosystem, recent events highlight the vulnerability of these platforms to regulatory interference. To ensure the long-term security and freedom of your cryptocurrencies, it is essential to explore decentralized trading options as our financial future becomes increasingly uncertain.

a. Peer-to-Peer Trading: Embrace the Community

Peer-to-peer (P2P) trading allows you to directly connect with other individuals in the crypto community. By engaging in P2P trading, you can sidestep the limitations imposed by centralized exchanges and reclaim control over your assets. Through reputable platforms that facilitate P2P trading, you can interact with fellow crypto enthusiasts, negotiate fair transactions, and securely exchange cryptocurrencies without the need for intermediaries.

P2P trading embraces the spirit of decentralization and fosters a sense of community among like-minded individuals who value financial independence. By tapping into the power of the crypto community, you can navigate the challenges posed by regulatory pressures and retain the ability to freely transact with your digital assets.

Popular platforms for peer-to-peer trading include: Craigslist, LocalBitcoins, Paxful, BitQuick, LocalCoinSwap, HodlHodl, and Bitsquare.

Just because I’ve mentioned a platform does not mean that you will have a good experience on it, so do some research before diving in, or you may wish you had. I am not responsible for your crypto mishaps; this is all in your hands, I’m just here to vomit some helpful info at you.

When choosing a platform, consider the following factors:

• Fees: Some platforms charge fees for P2P transactions, so it is important to compare fees before choosing a platform.

• Security: It is even more important that you choose a platform with strong security measures in place to protect your funds.

• Liquidity: Your experience trading US Dollars for crypto hinges on liquidity. In this context, liquidity refers to your ability to buy or sell an asset quickly and easily without affecting the price. In other words, how much crypto is on hand and ready to be swapped?

Overall, P2P cryptocurrency trading can be a convenient and affordable way to buy and sell cryptocurrencies. However, it is important to do your research and choose a platform that is reputable and has strong security measures in place before making any transactions.

b. Decentralized Exchanges (DEXs): The Future of Trading

DEXs operate on blockchain technology, eliminating the need for intermediaries and putting the control of trades directly in the hands of users. These platforms enable peer-to-peer trading without the requirement of a central authority, such as Binance.US, thus reducing the risk of regulatory disruption.

By embracing DEXs, you can participate in trading activities with confidence, knowing that your transactions are secured by the inherent immutability and transparency of blockchain technology. DEXs not only empower individuals by providing control over their assets but also contribute to the broader vision of a decentralized and censorship-resistant financial ecosystem.

c. Crypto/Bitcoin ATMs

Crypto ATMs provide a convenient and user-friendly experience for purchasing and selling cryptocurrencies. These ATMs are typically located in easily accessible public places, such as shopping malls, airports, and convenience stores, allowing you to conduct transactions at your convenience without the need for complicated online platforms or lengthy verification processes. These ATMs function similarly to regular ATMs, allowing users to buy or sell cryptocurrencies using cash or traditional bank cards.

Unlike some other crypto-purchasing methods that may involve waiting for transactions to be confirmed on the blockchain, crypto ATMs offer near-instantaneous transactions. Once you complete a transaction at a crypto ATM, you typically receive your purchased cryptocurrencies immediately, allowing you to take control of your assets without delay. They also enable you to buy or sell cryptocurrencies with a certain degree of anonymity, as many of them require minimal personal information for smaller transactions. This protects your privacy and reduces the risk of your sensitive financial data falling into the wrong hands.

Educate Yourself: Knowledge = Protection

a. Stay Informed (Reputable Sources and News Platforms)

In the rapidly evolving world of cryptocurrencies, staying informed is crucial to protect your financial interests. As recent events, such as the suspension of USD deposits on Binance.US, demonstrate, it is essential to rely on reputable sources and news platforms to navigate this landscape effectively.

To ensure you have accurate and up-to-date information, consider following trusted financial news outlets like CoinDesk and DataDash. These sources have a track record of providing reliable reporting on the crypto industry. By staying informed through reputable platforms, you can better understand the implications of regulatory actions, such as those by the SEC, and make informed decisions about your cryptocurrency investments.

Remember, knowledge is power, and in the world of cryptocurrencies, it's essential to arm yourself with accurate information to protect your assets and make informed financial choices.

b. Join Communities (Engage with Like-Minded Individuals)

One of the best ways to learn about cryptocurrency security is to join communities of like-minded individuals. There are many online forums and chat groups where you can discuss security best practices with other users.

These communities can also be a valuable source of information about new security threats and vulnerabilities. By staying up-to-date on the latest threats, you can take steps to protect your assets.

c. Research Projects (Understand the Technology)

Another way to improve your cryptocurrency security is to research the underlying technology. By understanding how cryptocurrencies work, you can better understand the security risks and how to mitigate them.

There are many resources available online that can help you learn about cryptocurrency technology. You can also find books and articles on the topic at your local library or bookstore, but be aware that crypto news tends to become old and irrelevant very quickly. You’re likely to find the most up-to-date information on the internet.

Also, if you are using a centralized, closed source search engine such as Google or Bing, be prepared to see only the information Google wants you to see. I recommend checking out Brave Search, but there may be an even better option for your queries. SearX is an open-source metasearch engine that aggregates results from a variety of different search engines, including Google, Yahoo, and Bing. Presearch is an open-source, decentralized search engine that is powered by its users. It rewards users with PRE tokens for their search queries, which can be used to purchase advertising, tipping, or other services.

By taking the time to learn about cryptocurrency security, you can help to protect your assets and ensure that you can continue to use cryptocurrencies safely and securely.

Conclusion: Forge Ahead with Resilience

The suspension of USD deposits at Binance.US is a concerning development for the cryptocurrency industry. It is a sign that the SEC is cracking down further on the industry, and it could make it more difficult for US citizens to access and trade cryptocurrencies. However, it's important to remember that we are not powerless.

US citizens can still buy and sell cryptocurrencies. We can use decentralized, crypto-only exchanges, even though it may create more unnecessary steps for us. We can also trade cryptocurrency in person, using our own private wallets. By using decentralized exchanges and educating ourselves about cryptocurrency, we can protect ourselves from the SEC and other corrupt governing bodies. Together, we can build a more decentralized and free financial system. This may sometimes feel like an uphill battle, but in the words of Tom Petty, everybody’s had to fight to be free.

It was after 10pm when I was made aware of this concerning new Binancial development, and I made a pact with myself to not focus on anything else until this was finished. I have gone over everything with a fine-toothed comb, but I apologize if any significant errors slipped through the cracks. It is now after 4am, and I haven’t slept since waking up this morning to support my family while we had my 18-year-old (and very sick) cat euthanized. It’s been a long day. If I did happen to screw something up, and you are one of the lucky ones receiving this in your inbox, just hit reply and your message should make it to me sooner than later. If you are reading the web version, you can find me (along with some of my other projects) here. This page should also be in the footer, but I felt like making it entirely too convenient for you.

Anyway, thanks for joining me for this impromptu issue. I appreciate you.

-Eli