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Coinbase warns that bankruptcy could wipe out user funds

fortune.com

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Re: Coinbase warns that bankruptcy could wipe out user funds

#161

Post by CyanDeparture »

Can anyone tell me how to set up a wallet on my Mac in order to get my coins off coinbase. Is there any clear guide on how to do that. Every link on Google seems to be spam or downloading potentially malicious software.

It's very fustrating because so many people seem to know how to set up a wallet on their computer/Mac however I cannot for the life of me find a clear wallet to download and move my funds to or a guide on how to do it.

If I downloaded this - https://bitcoin.org/en/download - is that a way to do it? I can't download this in the UK, so is it safe to download it via a VPN and install it that way?

Thank you so much to anyone who sees this and replies.

Re: Coinbase warns that bankruptcy could wipe out user funds

#162

Post by xur17 »

prepend wrote: post #2

Since 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…

> Coinbase users would become “general unsecured creditors,” meaning they have no right to claim any specific property from the exchange in proceedings. Their funds would become inaccessible.

I'm curious about this bit - are they required to structure their company in this way, or was it a choice that they made?

Re: Coinbase warns that bankruptcy could wipe out user funds

#163

Post by qgin »

It’s frustrating when someone says “oh don’t worry about this legalese” when it suits them.

When the tables are turned, they have no problem using every inch of that legalese against you and to protect themselves.

If it doesn’t matter, don’t include it in the contract.

Re: Coinbase warns that bankruptcy could wipe out user funds

#164

Post by [deleted] »

capableweb wrote: post #144
_nhynes wrote: post #136

Now the real question is whether bankruptcy would topple USDC since Coinbase is one of the major backers [0]. It's holding steady right now, but so was UST a few days ago. USDC has $48B supply and is propping up DeFi apps on many other networks (just look at AAVE [1] and Curve [2], two multi-chain protocols), so if it falters, there could be massive fallout. [0]: https://www.centre.io/usdc [1]: https://app.aave.com/m…

I don't think you can really compare UST and USDC like that. USDC has major backing by very large players in the space while UST is backed by... just Terra? But I agree on the last part, if USDC looses its peg, large parts of the ecosystem will be fucked. But considering who is managing + supporting USDC, it'll take a large event for USDC to lose its peg.

[deleted]

Re: Coinbase warns that bankruptcy could wipe out user funds

#165

Post by ben_w »

mattashii wrote: post #122
prepend wrote: post #76

Earlier quoted context omitted.

For purposes of operating the service. Not for commercializing IP. If I on Titanic and upload it to Dropbox. A creditor during bankruptcy couldn’t use those rights to sell streams of Titanic. For coinbase, a creditor could sell the crypto stored.

> Not for commercializing IP. Last time I checked it included commercializing IP, in at least Facebook and Twitter.

The entire point of Twitter and FB is to commercialise the user content, IMO.

While I wouldn’t a priori assume any given cloud storage user agreement includes a perpetual IP license to anything the user uploads, I also wouldn’t assume it to be free of such a clause.

Either way, read closely. And get legal advice if it matters, because jargon doesn’t mean what outsiders think it means.

Re: Coinbase warns that bankruptcy could wipe out user funds

#167

Post by JumpCrisscross »

0daystock wrote: post #159
prepend wrote: post #2

Since 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…

Quoted post unavailable.

> have enough to cover maybe 1-2% of all deposits? When the real stuff hits the fan and the buck breaks, there won't be any FDIC to protect any investment

The FDIC "is backed by the full faith and credit of the United States government" [1].

Its reserves (a) provide quick cash in case of limited problems, (b) insulate the Treasury and Congress and (c) hold the FDIC leadership accountable. On account of (c), the FDIC oversees its insurees, including by implementing reserve requirements [2].

[1] https://www.fdic.gov/resources/deposit-insurance/faq/

[2] https://www.fdic.gov/regulations/laws/rules/7500-500.html#fd...

Re: Coinbase warns that bankruptcy could wipe out user funds

#168

Post by lumost »

prepend wrote: post #2

Since 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…

Surprised that customer positions aren't considered loans with first rights over all other lenders in a bankruptcy proceeding. The company shouldn't be playing around with these, but based on this statement it sounds like they are doing something odd and trying to run a fractional reserve system, or leveraging customer deposits for other high risk activity such that the money may not be there.

Makes me think that I should move my crypto back to my own wallet/sell the crypto.

Re: Coinbase warns that bankruptcy could wipe out user funds

#169

Post by rmbyrro »

prepend wrote: post #2

Since 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…

I think main issue is not lack of insurance. Stocks aren't insured, for example.

Crypto being a novel space where no one truly understand its risks and that is (sadly, still) welcoming to scammers is the real issue, in my opinion.

Re: Coinbase warns that bankruptcy could wipe out user funds

#170

Post by IMTDb »

gitfan86 wrote: post #114
eatonphil wrote: post #4

Earlier quoted context omitted.

I do wonder why he's allowed to say on Twitter there is no risk of bankruptcy [0]. While the risk could be minimal and maybe negligible saying "no risk" means zero chance. That can't be true of any company. For a public company ceo to say that, isn't that securities fraud? I guess even if it is fraud and they do get prosecuted by the SEC they'd just get fined for it. And maybe the fine here would be much less than th…

He probably has a disclaimer somewhere saying his tweets are "not forward looking statements" so he is only saying that as of right now in this moment there is no risk of bankruptcy

Couldn't the same be said of any company that isn't currently filing for bankruptcy ?
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