The SEC Is ‘out of Their Mind and a Change of Regime Is Required’ — Former US Ambassador

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Trevor Traina, the founder and CEO of Kresus, has said he foresees non-custodial mobile wallets “transforming into something more comprehensive than just tools for storing digital assets.” According to Traina, such a transformation is needed if non-custodial wallets are to become apps with “functionalities to cater to the diverse needs of the Web3 community.”

Non-Custodial Mobile Wallets vs Hardware Wallets

Traina, a serial entrepreneur and former U.S. Ambassador to Austria, said the transformation, which he sees as being inevitable, is “definitely going to lower the entry barriers to Web3 and make it more user-friendly for everyone.” According to Traina, it was this vision for an all-encompassing Web3 wallet which motivated him to venture into the blockchain and crypto world.

Meanwhile, in his written answers sent to Bitcoin.com News, Traina insisted that non-custodial wallets will soon match or even surpass hardware wallets “in terms of security and user trust.” The constant need to update or improve the security features of non-custodial wallets is one reason why they are set to become more secure than hardware wallets, Traina argued.

Commenting on the U.S. Securities and Exchange Commission (SEC)’s stance on cryptocurrencies, the diplomat said that the Gary Gensler-led regulator is out of its mind and needs new leadership. In his answers sent to Bitcoin.com News via Telegram, Traina lamented how the SEC’s approach has resulted in only two of the 20 largest blockchain projects being based in the U.S.

Below are the former U.S. Ambassador’s answers to the questions sent.

Bitcoin.com News (BCN): You were a diplomat and serial entrepreneur before venturing into crypto. What pulled you into the Web3 space?

Trevor Traina (TT): I have been building companies since the dawn of Web 1.0 and have not been as excited about a new platform since. When we think of blockchain, people immediately go to cryptocurrencies, but I see a more profound innovation which is the universal ledger. That combined with smart contracts is going to profoundly change everything.

The idea that events of any kind can become immutable and decentralized is in a sense a holy grail. From contracts to ticketing to loyalty points to many other things, the blockchain will underpin much of what we do in the future. While there are basic tools for a number of different chains no-one has thought holistically about building an app that will unlock all of this utility. That opportunity brought me into the category.

BCN: Could you talk about non-custodial mobile wallets and their likely evolvement in the near future? Also, are wallets, particularly the popular ones, going to evolve into super apps by integrating as many functionalities as possible?

TT: I see non-custodial mobile wallets transforming into something more comprehensive than just tools for storing digital assets. Why should they be limited to this single function when they can integrate a swathe of functionalities to cater to the diverse needs of the Web3 community? You know, gamers, traders, stakers, holders, casual everyday users, and the hardcore super users.

At Kresus, we believe the key to this evolution lies in the integration of multiple functionalities within a single seamless interface: it’s a wallet but it’s also so much more, because you can mint NFTs, trade, access educational materials, etc. This is where the industry is heading, and it’s definitely going to lower the entry barriers to Web3 and make it more user-friendly for everyone.

BCN: How does a super app unify and streamline the multiple account attributes across various chains, which is necessary for a streamlined user experience?

TT: A Web3 super app has to effectively unify and streamline multiple account attributes across various chains to provide a smooth UX. This is a complex challenge given the fragmented nature of the current blockchain ecosystem. At Kresus, we tackle it by leveraging advanced interoperability protocols and user-centric design principles. Our app is built to seamlessly interact with various networks, allowing users to manage their crypto across different chains from an intuitive interface.

Obviously, this helps to simplify UX but it also provides a comprehensive overview of one’s digital holdings. Moreover, we focus on abstracting the complexities of blockchain so anyone can interact with it. This approach is crucial for bringing the benefits of blockchain technology to a wider audience. As far as the user is concerned, they are not burdened with any of this. They simply see an interface where everything they need or want is stitched together perfectly. And everyone is given a free Web3 domain name, which operates like a shortcut. They can send and receive multiple currencies without having to understand Sub wallet, addresses, or cut and paste things. Mary can have everything sent to one Mary123.kresus address and there is zero brain damage! Even adding a friend is as simple as WhatsApp, where you see their picture and you know it is them.

BCN: It is said that your crypto wallet does not require passwords or key phrases. How then do users recover their access to their funds if say they lose control of their primary email?

TT: Private keys are great but they ask a lot of the user and come with their own risks. With our wallet, we’re not burdening users with the responsibility of safeguarding keys, instead, we use a wallet infrastructure and software development kit (SDK) called Magic and store the private key on an AWS Hardware Security Module (HSM) designed for highly sensitive data.

This key is fully encrypted, giving it the same level of security you’d expect from a hardware wallet. Instead of a password, users access their account by clicking on a link embedded in an email and there’s also 2FA to add an extra level of security. If you lose access to your primary email, you can still access your account, as the Kresus Vault use MPC and Account Abstraction to terminate the need to remember passphrases or fear getting locked out.

BCN: Can a non-custodial mobile wallet compete against hardware wallets, which are considered more secure and is it possible to minimize the risk of fraud and theft something that will see mobile wallets gain the same level of user trust as the hardware wallets?

TT: Although hardware wallets are often touted for their security, I firmly believe that non-custodial mobile wallets can compete with, and in some cases, surpass hardware wallets in terms of security and user trust. At Kresus, security is our top priority. We employ state-of-the-art encryption and security protocols to ensure that our users’ assets are protected at all times.

Additionally, we are constantly updating our security measures to stay ahead of potential threats. To minimize the risk of fraud and theft, we implement features such as multi-factor authentication, biometric security, and regular security audits. These measures are designed to provide a level of security that is on par with if not superior to, hardware wallets. What’s more, the convenience and accessibility of mobile wallets can often translate into superior security practices for users.

Unlike hardware wallets, which may be used infrequently and thus more susceptible to misplacement or outdated security measures, mobile wallets are used all the time and are more likely to be kept up-to-date with the latest security updates. By prioritizing security and user experience, non-custodial mobile wallets like ours are well-positioned to gain the same level of user trust as hardware wallets, while offering the added benefits of convenience and functionality.

BCN: Some people believe that the crypto industry needs regulatory clarity and stability to innovate and thrive. What are your thoughts on the US Security and Exchange (SEC)’s current stance on regulating crypto where it considers most cryptocurrencies to be securities rather than commodities?

TT: I think the SEC is out of their mind and that a change of regime is required. When we think about the Internet, almost all of the most important companies are based in the United States. It is a tremendous competitive advantage. However, with the blockchain 18 of the 20 largest projects are located outside of the US. The United States simply cannot afford to be so hostile and so unclear with regard to such a key technology of the future.