Hardware wallets from Ledger are storage that lets cryptocurrency holders save their digital assets offline in a tangible object. Users now have the freedom to manage their cryptocurrency without being constrained by the liquidity of their suppliers.
Bloomberg’s source claims that despite well-known liquidity concerns facing lenders and exchanges, Ledger is still expanding.
Recent Troubles in Crypto Exchanges
Many times, struggling cryptocurrency businesses restrict client withdrawals to prevent a possible bank run. The most recent instance is the Singaporean exchange Zipmex, but lenders like Vauld and Celsius have also used this tactic recently, with Celsius filing for bankruptcy not long after.
Sources claim that because of these worries, more people are using self-custody options than storing their money on a centralized platform, which has benefited Ledger’s revenue.
The reports from today were released around a year after the company raised $380 million. Ledger’s Series C fundraising round, which Dan Tapiero’s 10T Holdings led, catapulted to an assumed total worth of $1.5 billion in June 2021.
The wallet service now offers cryptocurrency debit cards. Last winter, it launched the Crypto Life card on the Visa network. The CL card instantly converts cryptocurrency from a secured wallet into fiat when used to make payments to retailers.
Scrutinizing Crypto Wallets
Whether unhosted crypto wallets, specifically the kind that Ledger manufactures, should be subject to Know-Your-Customer (KYC) rules has been the subject of heated discussion among legislators in recent months.
If so, these wallet providers would have to disclose the consumers’ private information.
Hardware variants of unhosted wallets are sometimes called non-custodial wallets, independent of third parties, including Ledger and Trezor. Software wallets like MetaMask and WalletConnect are some further examples.
The European Union’s parliament overwhelmingly approved new legislative restrictions to forbid anonymous cryptocurrency transactions earlier this year.
According to the EU parliament’s proposals, companies that offer cryptocurrency services must gather personally identifiable information from users who make transactions of more than €1,000 ($1,022) using unhosted wallets.
In sharp contrast, the UK government abandoned a similar plan to require KYC on unhosted wallets in June after receiving input from various people, including academics and industry professionals.
“Instead of requiring the collection of beneficiary
and originator information for all unhosted wallet transfers, crypto asset
businesses will only be expected to collect this information for transactions
identified as posing an elevated risk of illicit finance. The minimum factors
that firms should consider when making such a determination of risk will be
set out in the legislation,” reads a document released at the time by the British Treasury.
It further stated that:
The government does not agree that unhosted wallet transactions should automatically be viewed as higher risk; many persons who hold cryptoassets for legitimate purposes use unhosted wallets due to their customisability and potential security advantages (e.g. cold wallet storage), and there is not good evidence that unhosted wallets present a disproportionate risk of being used in illicit finance. Nevertheless, the government is conscious that completely exempting unhosted wallets from the Travel Rule could create an incentive for criminals to use them to evade controls.
It is currently uncertain whether the steps would involve implementing KYC regulations on non-custodial wallets. Still, the same month, a spokesman for the US Treasury Department stated that the Treasury is “trying to address the unique vulnerabilities associated with unhosted wallets.”