Former Coinbase CTO Balaji Srinivasan warns of systemic risk from Google and Apple. Srinivasan argued that the government could force these tech companies to produce the private keys of their users. The US and Chinese governments have one of the largest tranches of crypto, even though they have never bought any.
Cryptocurrency entrepreneur Balaji Srinivasan has described Google and Apple as systemic risks to the industry.
The former Coinbase CTO tweeted this on May 19. According to him, these tech giants are major security threats because the federal government can cause them to become weapons.
If that happens, the government could “backdoor iPhone and Android to exfiltrate private keys,” he warned.
How These Tech Giants Threaten Crypto
Balaji noted that in a future where governments go bankrupt and turn to Bitcoin to finance their operations, the US government could force tech giants like Apple and Google to search for private keys in the servers, browsers, and devices under their control.
“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 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,” explained Balaji.
Most tech companies would be forced to comply in this dystopian future because they have no other choice. He said the only safe option for crypto users would be the Linux operating system, even with its limitations.
On May 19, Balaji’s shared his thoughts by means of a lengthy tweet, whose excerpts are below:
“In 2010, even after Twitter and Facebook helped catalyze the Arab Spring, people still would have thought it implausible if you’d said “in ten years, the most important political issue in the world for a few days will be whether the President of the United States could tweet. But it was.”
Following Balaji’s statement, many noted that cryptocurrencies might need a phone, and recommended the recently launched Solana phone. Others, though, questioned why someone would store their private keys on their phones, as this is generally considered a poor security standard because both the Google and Apple stores are not end-to-end encrypted.
Governments Already Confiscating Illegally Acquired Crypto Assets
According to available information, the US and Chinese governments hold one of the most significant tranches of Bitcoin and other digital assets. The US government owns over 200,000 units of BTC valued at approximately $6 billion. The government acquired most of this BTC by confiscating it from cases that included the Silk Road BTC seizure, Bitfinex hack confiscation, among others.
Earlier this year, the US government seized $260,000 worth of digital assets from an NFT phishing scammer. The seized assets included two NFTs, Bored Ape 9658 and Doodle 3114, valued at more than $200,000.
Meanwhile, the Chinese government was reportedly holding approximately 194,775 BTC valued at roughly $3.9 billion. As of November 2022, the Asian country’s government held $6 billion in cryptocurrencies, including Bitcoin, Ethereum, and others.
Like the United States, China obtained most of its BTC holdings by seizing funds from the PlusToken Ponzi scheme.
By Audy Castaneda
