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Coinbase warns that bankruptcy could wipe out user funds
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Re: Coinbase warns that bankruptcy could wipe out user funds
#152The government only intends to erode confidence in crypto.
the government has no incentive to enhance confidence in Bitcoin when, from their point of view, money is an already-solved problem.
Re: Coinbase warns that bankruptcy could wipe out user funds
#153Since coinbase isn’t FDIC insured, it makes sense that if coinbase goes bankrupt, the customer currencies will go away as well. And they aren’t SPIC insured in the situations where crypto is a security. It’s funny to see people shocked (SHOCKED!) when crypto doesn’t have the protections of regular banking and investments. That’s why you don’t invest with stuff that isn’t insured. Those aren’t real rates, they are ris…
>> Since coinbase isn’t FDIC insured, it makes sense that if coinbase goes bankrupt, the customer currencies will go away as well.
No it doesn't. Well if coinbase is lending crypto like a bank then sure. But if they are acting like a stock broker, they should be holding real assets on behalf of customers and those assets should go to the customers who actually own them.
Longer term investors can actually (could? it's been a while) get their stock certificate mailed and hold it themselves.
Re: Coinbase warns that bankruptcy could wipe out user funds
#154Earlier quoted context omitted.
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.
> "We have no risk of bankruptcy"
Isn't that a statement that the SEC should fine them for?
Re: Coinbase warns that bankruptcy could wipe out user funds
#155Remind 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
E. Learning what it's like to be dumped on
Re: Coinbase warns that bankruptcy could wipe out user funds
#156Earlier quoted context omitted.
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.
You already write why that is mathematically impossible, so the logical conclusion would be that it is not meant to be interpreted like that no? Language is not maths, no risk doesn't mean the risk is zero. It means the risk is unlikely.
These are complicated topics. The people buying crypto at Coinbase are not sophisticated investors.
It is entirely reasonable to believe that a large proportion of Coinbase users would read, "We have no risk of bankruptcy" and choose to leave their money at Coinbase believing that the CEO must have used some financial mechanism to 100% prevent bankruptcy.
Words have meaning, and when you say, "no risk of bankruptcy" there are a lot of people that will be duped into believing that literally.
Re: Coinbase warns that bankruptcy could wipe out user funds
#157Would this situation be same as FTX, Binance as far as we know?
Re: Coinbase warns that bankruptcy could wipe out user funds
#158If Coinbase goes bankrupt your crypto-coins will be worthless at least.
Re: Coinbase warns that bankruptcy could wipe out user funds
#159Since coinbase isn’t FDIC insured, it makes sense that if coinbase goes bankrupt, the customer currencies will go away as well. And they aren’t SPIC insured in the situations where crypto is a security. It’s funny to see people shocked (SHOCKED!) when crypto doesn’t have the protections of regular banking and investments. That’s why you don’t invest with stuff that isn’t insured. Those aren’t real rates, they are ris…
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Re: Coinbase warns that bankruptcy could wipe out user funds
#160Since coinbase isn’t FDIC insured, it makes sense that if coinbase goes bankrupt, the customer currencies will go away as well. And they aren’t SPIC insured in the situations where crypto is a security. It’s funny to see people shocked (SHOCKED!) when crypto doesn’t have the protections of regular banking and investments. That’s why you don’t invest with stuff that isn’t insured. Those aren’t real rates, they are ris…
> it makes sense that if coinbase goes bankrupt, the customer currencies will go away as well
Others have said this, but just to reiterate : this is quite wrong. This is like saying that because you hold Amazon stock via a Schwab brokerage account, if Schwab were to declare bankruptcy, then you would lose your Amazon stock. Needless to say that wouldn't happen because you are the owner of the stock, not Schwab.
FDIC insurance covers a totally different scenario where the money you deposit doesn't really exist (lent to someone else in the meantime).
What makes sense is that Coinbase isn't the owner of customers' crypto assets. This thread is about the fact that apparently that's _not_ necessarily true.