If people loose tons of cash in this fiasco, it will pretty much kill crypto
Consider their ownership, and what it could mean for those parties if Coinbase were sacrificed.
It's an interesting theory.
Coinbase warns that bankruptcy could wipe out user funds
101–110 of 473 posts
Re: Coinbase warns that bankruptcy could wipe out user funds
#102That sounds suspicious to me. In UK at least client money should be segregated especially in the context of custody assets. Really shouldn't enter the same pool of assets as Coinbase's office chairs in case of liquidation
Didn't it take a fairly long while before client money laws came in even in traditional banking? I don't have a date so I could be wrong, but taking the history of british banking I have a feeling this was a relatively recent thing. Being generous, we're still within the first decade of crypto as an investment instrument, I imagine regulations haven't quite caught up so really it's no surprise newer crypto companies like Coinbase aren't particularly serious about keeping client money/assets separate.
And as much as client money should be segregated, some big names are still getting dinged with CASS breaches - Charles Schwab in 2020, for example.
Re: Coinbase warns that bankruptcy could wipe out user funds
#103When a CEO requires 8 twitter posts[1] to essentially convey the message "Don't worry about this legal clause", it sort of has the opposite effect on me. [1]: https://twitter.com/brian_armstrong/status/15242334800407101...
That thread actually seemed like a reasonable response to balance out the "gloom and doom" from the media. Also, not sure why you think "8 twitter posts" are a such big deal -- tweets are limited in size, and twitter has a broad audience, and these types of tweet threads are very common.
It does not look reasonable in any way to me.
> Your funds are safe at Coinbase, just as they’ve always been.
You won't lose your funds, don't worry.
> For our retail customers, we’re taking further steps to update our user terms such that we offer the same protections to those customers in a black swan event. We should have had these in place previously, so let me apologize for that.
Unless we have your keys, in which case I'm sorry we're not protecting you yet (but don't worry, everything's fine).
> We have no risk of bankruptcy
Said directly after their worst quarter to date. Always a lie regardless.
> however we included a new risk factor based on an SEC requirement called SAB 121, which is a newly required disclosure for public companies that hold crypto assets for third parties.
A rule made specifically for their type of companies that clarifies risks of storing assets in a non regulated bank.. somehow shouldn't make you scared that your assets might get taken away since it's very "unlikely".
Re: Coinbase warns that bankruptcy could wipe out user funds
#104So much for 'read + write + own'
Coinbase barely has an "us too" web3 wallet — they're not a proper web3 company, they're a tradfi bank in sheep's clothing.
Re: Coinbase warns that bankruptcy could wipe out user funds
#105Earlier quoted context omitted.
If this was a brokerage with stocks, the customers own those stocks. There is no reason crypto shouldn't be the same. There is no reason crypto shouldn't have top priority to their owners. It isn't okay for a company to put other creditors above the owners of that crypto
> this was a brokerage with stocks, the customers own those stocks Sort of. Most individuals' shares are held in "street name,"[1][2]. You have a claim against the broker for those shares, but that could be impaired if the broker went under. Losses are rare because American brokers are highly regulated. Coinbase has fought vigorously against being similarly regulated [3]. [1] https://www.sec.gov/fast-answers/answerss…
If you look closely you’ll find that the broker and the holding company have similar but distinct names - it’s supposed to be setup so that if the broker goes under the holding company can be transferred and continue.
Similar to banks and FDIC the financial industry is good at this kind of thing and brokers can go bankrupt without customers ever really noticing.
Re: Coinbase warns that bankruptcy could wipe out user funds
#106Remind me what is the point of holding cryptocurrency again?
A. speculation
B. diversification against more tradional assets
C. store of value if you don’t have access to any better financial instruments
D. keeping some ready on hand to pay off ransomware attacks
Re: Coinbase warns that bankruptcy could wipe out user funds
#107https://nitter.net/brian_armstrong/status/152423348004071014... In other words: We only disclosed these risk factors because we were legally required to. Please ignore our SEC disclosure and half-billion dollar quarterly loss, and instead trust my unregulated statements posted on Twitter. There are no risk factors, your money is safe, the music will never stop.
I get the point, but please don’t use a block quote when it’s not a quote. Two problems: 1. People don’t read the source. 2. People can’t detect subtle or not-so-subtle cues. Case in point: there’s already a sibling discussing “There are no risk factors” as if it’s actually a quote from Brian Armstrong.
Ok here are some actual quotes then:
"We have no risk of bankruptcy" - objectively false statement
"it is possible, however unlikely, that a court would decide to consider customer assets as part of the company in bankruptcy proceedings" - goes against the entire point of his thread, and is also exactly why this disclosure was required
The quote above seems like a completely accurate and fair characterization.
Re: Coinbase warns that bankruptcy could wipe out user funds
#108Earlier quoted context omitted.
I do not believe a reasonable human would consider this statement: > Please ignore our SEC disclosure and half-billion dollar quarterly loss, and instead trust my unregulated statements posted on Twitter. As actually possibly coming from the mouth of the CEO of a company (that is not Elon).
As I said, > People can’t detect subtle or not-so-subtle cues. Or they just skim part of the comment and jump to reply immediately. Same effect.
No post body was provided.
Re: Coinbase warns that bankruptcy could wipe out user funds
#109Earlier quoted context omitted.
“It is what he’s saying” is subjective. A quote is not (or shouldn’t be, despite far too many violations in the real world). Just say “Summary: blah blah” if you want to post your subjective summary.
I do not believe a reasonable human would consider this statement: > Please ignore our SEC disclosure and half-billion dollar quarterly loss, and instead trust my unregulated statements posted on Twitter. As actually possibly coming from the mouth of the CEO of a company (that is not Elon).
I never would have thought a CEO would make a statement like this:
>We have no risk of bankruptcy
Reality is that every company has greater than "no risk" of bankruptcy. That's why regulators force them to spell out their risks in filings.
Re: Coinbase warns that bankruptcy could wipe out user funds
#110Earlier quoted context omitted.
That thread actually seemed like a reasonable response to balance out the "gloom and doom" from the media. Also, not sure why you think "8 twitter posts" are a such big deal -- tweets are limited in size, and twitter has a broad audience, and these types of tweet threads are very common.
Only took me 5 words and a contraction to say the same thing, and I'm not even a native English speaker. Edit: All those maybe's and probably's are the most troublesome part though.
“Pay no attention to the man behind the curtain” would have worked just as well.
Before reading that tweet chain I was on the “SEC always requires horribly pessimistic outlooks” and now I’m in the “they’re going bankrupt very soon” camp.