Post
Topic
Board Press
Re: [2022-05-12] Coinbase warns users about bankruptcy risks
by
Konfusioon
on 13/05/2022, 07:56:23 UTC
https://edition.cnn.com/2022/05/11/investing/coinbase-stock-bitcoin-cryptocurrencies/index.html and https://fortune.com/2022/05/11/coinbase-bankruptcy-crypto-assets-safe-private-key-earnings-stock/ are the articles I'm refering to.

It seems that Coinbase is having hard time currently. Their stock is at all times low and at a time like this the company started reminding users that all the currency stored on Coinbase may be part of the bankruptcy pool. Since I am assuming that at least some amount of people hold their crypto on that platform I would suggest looking for alternatives as you really don't own your money there.

I think the articles are blowing the statement out of proportion.  Yes, it is in the Coinbase SEC filings etc, but it is somewhat obvious that if you don't control the private keys, the bitcoin are not your's.  You are just a creditor.  That has been known all along and is nothing new.  It is just like if you have assets at a US Bank - although purportedly not at a Swiss bank.

To me it sounds like FUD spread by people who want people to be scared and panic.

Informing investors of the risks is a lot of CYA, the reporting on it is FUD.

I agree that in many ways this has been blown out of proportion. However I do think that there is value in this article reminding people that you don´t strictly own the money on sites such as Coinbase. Mostly I think that some people live under the impression that sites like Coinbase etc are similar to a bank in sense that yes - Coinbase and bank could go under, but it´s purely theoretical.