Founder Risk and Custody Issues Pose Major Threats to Crypto Industry, Gradual Transition to Web 3 Needed
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Founder risk, not just regulation, is a major threat to the crypto industry with exchange founders misusing client assets.
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Unlike traditional finance, crypto exchanges custody assets, creating a conflict of interest.
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Self-custody is not the answer; most people can't properly secure their own keys.
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A solution is KYC'ed self-ownership with support for key recovery across a sharded database.
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We need to transition users from Web 2 to Web 3 over the next decade, not force innovation on them too fast.