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 risk adjusted rates for not having insurance.

It’s fine to invest in these products, but scary because people aren’t doing due diligence and have unrealistic expectations.

The CEO’s statement that they won’t go bankrupt it just comical. Of course he thinks they won’t. Few bank CEOs think that. But real banks and brokerages have insurance for their customers in the rare situation that they go bankrupt.

Anyone holding significant amount of cryptocurrencies should consider the risks of each choice, make an informed decision, and live with the risk that entails. If that's too scary, then you probably shouldn't be in this market.

In other words, the insurance is probably worthless. People with the good sense to realize that Coinbase is not a bank in any sense of the word are unlikely to be affected.

Coinbase had a good run but don't be stupid. Crypto exchanges aren't insured like consumer checking accounts are in the US and when they're gone they're gone. Geth isn't hard to set up for most of us, it took me about 20 minutes to have it up and running after not using a local wallet for nearly a decade.

Remember to write down your password (I can't emphasize that enough. I'd be retired by now if I had done that with the wallet I made in 2011) and back up your wallet. I keep mine in git.

In the last 7 days they have lost over 50% value, and dropping a news bomb like this is only going to make it worse, isn't it?

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.

Title: {Sensationalized title}

Intro: {Waffle}

Middle: {Sentence that gives context to sensationalized title}

Ending: {Facts & figures to legitimise article}

[1]: https://twitter.com/brian_armstrong/status/15242334800407101...

The whole point of crypto wallets is that you don't need such central businesses to hold your cash.

Then again there's all sorts of benefits so there's a tradeoff.

There'd be nowhere to go where even a paper wallet would do me any good. You could execute a 51% attack on a solar-powered NetBSD toaster.

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.

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.

So I have been trading with others and will never use CB for anything but cold storage. (Which they're great at)...

The company is the worst I have ever dealt with. There is no way to interact with a person. So if something does happen, you have NO RECOURSE.

Based on my experience, they will be bankrupt. This is a certainty. You cannot have a financial entity that has ZERO human interaction or service. No trust, none at all...

In that case they were the custodian for hedge funds assets. Lehman held those assets, in some cases because the British government force them to.

This really caused 2008 to spiral as now hedge funds that were perfectly fine got locked up and had to pull assets from the market due to Lehman holding their assets which caused even more selling and the feed back loop continued as funds sold their best assets first(think the Microsofts of stock world).

A coin bankruptcy would be the same thing, retail probably doesn't matter too much but if COIN held institutional funds, those guys do need to have liquidity for redemptions. This would mean alto of sell pressure on other exchanges and would lead to the best and highest quality crypto assets getting hammered down as funds fled to cash/stable coins.

Solana would probably crash and then shut down the network, even though they still try to claim they are a decentralized network:)

ETH and BTC would see very sharp drops in the first few days and then bounce back as people need to put money somewhere.

DEFI would feel this sell pressure and have alot of failings due to liquidity pools bein drained in this rush to quality. At best they'd get shutdown, at worst they'd just fail and go away.

You'd also expect the algo based stable coins to break the peg, even the well collateralized DAI would probably break.

Tether would probably continue on just fine as that's probably what most institutional funds would go to and I've given up on trying to predict its demise,

I still expect that the current downturn reverses later this year, and Coinbase isn't popping yet they're just having to disclose that risk. But given a real melt down in the broader economy and something like commercial mortgage backed securities popping, I expect that Coinbase would melt down.

Even though I'm not as negative as everyone else over current conditions, it is probably time to seek shelter (or that if there is a bounce later this year it is probably a profit taking opportunity before the crash)

That's terrible. Coinbase act very much like stockbrokers but with crypto instead of stocks and should segregate client funds the same way. If you deposit a 1000 Apple shares say with eTrade and they go bust the Apple shares are still yours and can't be taken to pay eTrades debts - that's how it should be. Otherwise it's just asking for the brokers to legally steal your investments by paying themselves huge bonuses and then saying oops, we're broke.

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 the price of a run on coinbase.

[0] https://mobile.twitter.com/brian_armstrong/status/1524233602...

If, for example, Dropbox declares bankruptcy I'd be shocked if creditors could search through the user data for things of value.

It seems like there would be plenty of money to be made just charging transaction fees and holding assets 1-1 for the users, but what do I know.

So it is a little surprising to me that crypto assets wouldn’t be treated similarly, which is probably why the SEC is demanding this disclosure.

0. https://twitter.com/jespow/status/1494462097161220104?lang=e...

The filing says nothing about how probable a bankruptcy is, but Brian Armstrong, Coinbase CEO, has given his perspective on this topic here: [2] Here is the lede: "We have no risk of bankruptcy."

[1] https://d18rn0p25nwr6d.cloudfront.net/CIK-0001679788/89c60d8...

[2] https://twitter.com/brian_armstrong/status/15242334800407101...

But I suppose that’s the rabbit hole crypto fans go down.

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.

Regulatory capture is _real_, and dispraportionately favours incumbents. As regulations are tightened on crypto in general, firms that are not involved in the creation of said regulations are going to find themselves on the wrong side of the law. Furthermore, if _any_ organization has a reputation of taking sides, it's the SEC.

> 4. 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.

> 5. ...and it is possible, however unlikely, that a court would decide to consider customer assets as part of the company in bankruptcy proceeding

The term people might want to google is "bail-in". And it is likely that Coinbase has less protections related to that than a conventional bank.

How are you going to prove that the phone calls and meeting with the Saudis didn't include funding commitments from the Saudis?

I'm not suggesting that these CEOs are 100% honest at all times, I'm sure they are not, but you need actual proof for fraud to have bet committed.

Some examples:

- NuCypher goes up quickly on binance (a few months ago) because a whale is buying there, lots of people try to withdraw on CB to sell on binance, withdrawals start off working but then get locked for 5 hours straight, reddit and other social media had people complaining, no explanation given by CB, just technical issues as always.

- Try to sell a few tokens a few weeks ago, it doesn't allow me to put big orders, instead they make me do it in multiple times, in which time the bots (some of which are theirs), front run me and instead of sell at a 5% lower price in one hit I lose 10% just waiting for the UI to allow me to make small order after small order.

- Always blocking withdrawals in the most suspicious moments imaginable, just happened to me 3 days ago trying to withdraw USDC, had to wait an hour until that "unexpected error occurred" disappeared.

- Human greed, why would they be different from the banks? I see most people don't withdraw their coins, I lend their coins for interest and profit from it, shareholders are happy, I sell my stocks and make money, if a bank run occurs I'll declare bankruptcy or ask the government for help because like a bank if my customers lose their money they might become unhappy and cause the government problems (Coinbase will eventually become a bank if crypto hype keeps growing).

Is Coinbase "loaning" out the Bitcoin users have deposited in it?

The reason banks need the FDIC is that they loan your deposits out instead of throwing it in a vault and sitting on it, so if they go under they don't have those assets to distribute in a bankruptcy. Given how immature and non-economic cryptocurrency is, it wouldn't surprise me if Coinbase was sitting on all/most of its users desposits. So it's possible the users might get most of their deposits back after a bankruptcy proceeding (assuming the reason wasn't massive theft of assets or something).

I think the best strategy for someone in your case is to cashout from coinbase into whatever fiat currency you use locally and put that into your bank account.

Sigh.

Just let the people use metamask, more full nodes are nice but theyre not there yet

Only purchase the hardware wallet directly from the company website, never used.

I don't think you understand the basics of Bitcoin.

The contract is always binding.

I always immediately treat anyone who says "don't worry about (something in the contract)" as somewhere between suspicious and hostile.