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est business. When processors accept
large volumes of high-risk process-
ing without reserves or provide cash Think of the roulette wheel turning
advance without a claim on future already and investors being invited to
receivables, money can quickly dis-
appear. place their bets or be left out altogether.

As I have written in this column
many times over the years, a contract
is not much better than the parties Conclusion
signing it. In FTX it appears that the The great thing about law is that it has studied fraud for centuries. The question
counter-parties of its investors—and
customers—were not trustworthy. for investors is whether they want to use legal tools—such as due diligence,
liens, audit rights and legal opinions to protect themselves—or, instead, make
big blind bets hoping for a fast buck.
Traditional deal makers might have
asked for a face-to-face meeting with
SBF to assess his trustworthiness. For the record, none of the crypto platforms mentioned in this article took
legal advice from our firm (www.bitcoin.law) nor did investors that were also
Perhaps, the rush to invest, and a
preference for Zoom over IRL caused mentioned herein.
investors to side-step those meetings.
Would other investors in the same In publishing The Green Sheet, neither the author nor the publisher is engaged in rendering legal,
spot make the same decision? Who accounting or other professional services. If legal advice or other expert assistance is required,
knows? We can only speculate. the services of a competent professional should be sought. For further information on this article,
Not your keys, not your coin please contact Adam Atlas, attorney at law via email at atlas@adamatlas.com or by phone at
514-842-0886.
Die-hard Bitcoin and other crypto
fans believe that if a user does not
exclusively control their private
keys, then they do not actually own
the coin in the wallets that use those
keys. Private keys are the codes nec-
essary to initiate outbound transac-
tions from a crypto wallet.

Hosted crypto wallet providers, like
FTX, Binance, Coinbase and others
hold onto those keys on behalf of
their users. Unhosted crypto wal-
let solutions, like Ledger and Tezor,
make it easy for users to control their
own private keys.

Every crypto implosion has been on a
platform where user keys and assets
are held by a centralized exchange,
like FTX. The maxim "Not your keys,
not your coin" rings truer than ever
now. The problem with just holding
your crypto in an unhosted wallet is
that you cannot also gamble with it at
the same time.

This tension between the security of
holding digital assets versus the ir-
resistible allure of gambling them for
potentially great returns is likely here
to stay.

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