720 sats \ 9 replies \ @vindard 10 Jan \ parent \ on: What is fedimint to you? ecash
Finer points obviously differ by jurisdiction, but definition generally converges on that when someone is able to unilaterally moves someone else's funds but they haven't taken legal ownership of the funds, then that first person (entity etc.) can be considered a custodian of those funds.
Coincenter has some decent work on the definitions here: https://www.coincenter.org/education/policy-and-regulation/custody/
someone is able to unilaterally moves someone else's funds
Thanks for that. Sounds like a fedimint isn't a custody solution then.
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Individual federation members cannot, but the federation (entity) as a whole can. Challenge would be to convince whichever regulator that there isn't such a thing as "a single federation" and the key holders are just a bunch of unco-ordinated randos? If you can pull that off, then sure you're probably all clear
Also even if it isn't "custody", there's probably some other classification they can try to slap you with: e-money issuers, Virtual Asset Service Provider etc.
I think the point here is the user loses control of the original funds, the federation takes control of funds, and it's unclear whether a federation made up of known members will be able to withstand a regulatory attack.
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I think the point here is the user loses control of the original funds
I don't think this is true at all. The user swapped bitcoin for ecash.
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Have you heard of Liquid, bitcoin miners, or other blockchains? Can't move your money in those networks unless a majority of consensus passes. Last I checked, all miners aren't considered the same entity.
How is fedimint different?
Oh interesting, this is the first point on fedimint's own "Trade Offs" page
Custody: The user must trust the Federation Guardians with custody of their funds which introduces custodial risk.