Coinbase earnings were bad. Worse still, the crypto exchange is now warning that bankruptcy could wipe out user funds

mmmm

I don't play options often but when I do it's at times like this..

When there is major volatility you've got a good chance of hitting your exit before they expire if you don't get too greedy.

Mine sold off yesterday while I was planting potatoes in the garden...

Gotta love it.

All the banks and financial institutions have similar bail in policies. They will all go bust and we will all be left holding the bag.

Hidden away in Coinbase Global's disappointing first-quarter earnings report—where the U.S.'s largest cryptocurrency exchange reported a quarterly loss of $430 million and a 19% drop in monthly users—is an update on the risks of using Coinbase's service that may come as a surprise to its millions of users.

In the event the crypto exchange goes bankrupt, Coinbase says, its users might lose all the cryptocurrency stored in their accounts, too.

Coinbase said in its earnings report Tuesday that it holds $256 billion in both fiat currencies and cryptocurrencies on behalf of its customers. Yet the exchange noted that in the event it ever declared bankruptcy, “the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings.” 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.

That shouldn't happen.

An individual's ownership of cryptocurrency is supposed to be immutable and absolute; that's one of the key selling points touted by blockchain evangelists everywhere. But when a user creates a Coinbase account, they often end up storing their cryptocurrency in a wallet controlled by Coinbase, which means the individual is giving away at least part of their control over their own funds.

Access to a crypto wallet is governed by a private key, which is a long string of characters that effectively acts as a password. Without the key, the cryptocurrency in the wallet can't be accessed. On Coinbase, the exchange holds the private key and lets users access the funds within the wallet using a more conventional password. The setup makes it easier for users to enter their accounts, by remembering an easier password.

Yet it means that, when push comes to shove, Coinbase ultimately governs whether a user gets access to those assets.

In comments shared on Twitter, Coinbase CEO and founder Brian Armstrong said the exchange had "no risk of bankruptcy," and that the disclosure was made due to new rules set by the U.S. Securities and Exchange Commission regarding public companies that hold crypto assets on behalf of others.

"This disclosure makes sense in that these legal protections have not been tested in court for crypto assets specifically, and it is possible, however unlikely, that a court would decide to consider customer assets as part of the company in bankruptcy proceedings even if it harmed consumers", Armstrong tweeted, while reassuring users that "your funds are safe at Coinbase."

Bank accounts in the U.S. are protected by deposit insurance offered by the Federal Deposit Insurance Corporation. In the event a bank fails, the FDIC steps in to protect deposits up to $250,000, preventing depositors from going broke along with the bank. Crypto exchanges don't offer that same protection

less then 50% fair use act
[link to fortune.com (secure)]

In other news, I made 24% this week shorting Amazon and Tesla :)

Russia will hit USA with an EMP soon.

Don't worry folks we still got out Private Keys.

The invading force will accept Bitcoin still.

You cant fix stupid.

People will be jumping off buildings once the power grid goes.

But but I'm a bitcoin millionaire and its gone.

and there was this

Thread: My coinbase account showing 600 million account balance

Hidden away in Coinbase Global's disappointing first-quarter earnings report—where the U.S.'s largest cryptocurrency exchange reported a quarterly loss of $430 million and a 19% drop in monthly users—is an update on the risks of using Coinbase's service that may come as a surprise to its millions of users.

In the event the crypto exchange goes bankrupt, Coinbase says, its users might lose all the cryptocurrency stored in their accounts, too.

Coinbase said in its earnings report Tuesday that it holds $256 billion in both fiat currencies and cryptocurrencies on behalf of its customers. Yet the exchange noted that in the event it ever declared bankruptcy, “the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings.” 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.

That shouldn't happen.

An individual's ownership of cryptocurrency is supposed to be immutable and absolute; that's one of the key selling points touted by blockchain evangelists everywhere. But when a user creates a Coinbase account, they often end up storing their cryptocurrency in a wallet controlled by Coinbase, which means the individual is giving away at least part of their control over their own funds.

Access to a crypto wallet is governed by a private key, which is a long string of characters that effectively acts as a password. Without the key, the cryptocurrency in the wallet can't be accessed. On Coinbase, the exchange holds the private key and lets users access the funds within the wallet using a more conventional password. The setup makes it easier for users to enter their accounts, by remembering an easier password.

Yet it means that, when push comes to shove, Coinbase ultimately governs whether a user gets access to those assets.

In comments shared on Twitter, Coinbase CEO and founder Brian Armstrong said the exchange had "no risk of bankruptcy," and that the disclosure was made due to new rules set by the U.S. Securities and Exchange Commission regarding public companies that hold crypto assets on behalf of others.

"This disclosure makes sense in that these legal protections have not been tested in court for crypto assets specifically, and it is possible, however unlikely, that a court would decide to consider customer assets as part of the company in bankruptcy proceedings even if it harmed consumers", Armstrong tweeted, while reassuring users that "your funds are safe at Coinbase."

Bank accounts in the U.S. are protected by deposit insurance offered by the Federal Deposit Insurance Corporation. In the event a bank fails, the FDIC steps in to protect deposits up to $250,000, preventing depositors from going broke along with the bank. Crypto exchanges don't offer that same protection

less then 50% fair use act
[link to fortune.com (secure)]

How can they be loosing money if all they do is skim off of every transaction that’s ever made through their exchange, same goes with every other trading platform, I’d be be getting my money out of there pronto, crypto started off as a good idea and now it’s just a big fat scam, now coming to an end probably, was that always the plan.

Just vacuuming out the accounts...gotta say, I added more shib.

:manson:

I've come to the conclusion you're an idiot...

Sounds like coinbaseless wants to enter bankruptcy. Why would they put out news which is sure to panic its customers.

LOL @ Armstrong: all your crypto could become ours if you leave it in our hands but don't worry your crypto is safe with us.

How can they be loosing money if all they do is skim off of every transaction that’s ever made through their exchange, same goes with every other trading platform, I’d be be getting my money out of there pronto, crypto started off as a good idea and now it’s just a big fat scam, now coming to an end probably, was that always the plan.

Where is Max Kaiser.?

D'Oh!
:homer: