Updated: Jul 27, 2022
Safety: Exchange Platforms versus Self-Custody through a Self-Direct IRA (SDIRA)
This series of articles are intended to shine a light on all the bullshit out there about digital currency investment in your self-directed IRA.
Exchange Platforms versus Self-Custody through a Self-Direct IRA (SDIRA)
Although the exchange platforms have implemented a high degree of security, malicious attacks still occur. You cannot ignore the headlines as digital currency is a popular target for organized cyber criminals, whether they are stealing it outright or demanding it as an extortion payment in ransomware attacks. The modern-day bank robberies continue to occur with exchange/trading
These headlines are the reason that the digital currency landscape is being threatened by criminal investigations and sanctions. In February 2022, the U.S. Department of Justice made a record seizure of digital currency ($4.5 billion) and announced that it had arrested a New York couple for their role in laundering funds stolen from a digital currency exchange. This takedown illustrated that law enforcement can follow the digital currency when it comes to investigating cybercriminals. Although Bitcoin and other
cryptocurrencies offer some anonymizing features, they are still in fact, traceable. Investigators have demonstrated how to use the visible and immutable ledger of decentralized blockchains to trace illegal transactions and recover digital currency.
Cryptocurrencies are digital networks whose accounts are privately controlled, but whose transactions are publicly and veritably recorded in a visible ledger or blockchain. Although public account addresses are anonymized, the owner of a given account or wallet can remain anonymous only as long as their real identity cannot be tied to it. Once their identity is associated with a public address, however, it is unbelievably easy to identify their transactions.
The next time you go to create a free account to purchase digital currency on an exchange platform, consider the fact that you are providing your name, email address, physical address, and social security number that will be tied to your account or sub-account ledger used by the exchange platform. When the exchange platforms are hacked, so is your personal information and the
potential loss of your digital currency.