Coinbase Stock Is Crashing
finance.yahoo.com
finance.yahoo.com
Is there any real legal obligation for them to give users back their deposited coins, or is that just their current corporate policy?
People really think they were trying to hide a bankruptcy risk, and that the CEO is handling a PR issue poorly.
Very amusing. Would be fun to day trade those options, the volatility level is pretty perfect. Not touching though.
Retail investors thought that Coinbase had similar fiduciary responsibility with respect to customer assets but it does not, so customers are actually lowest priority creditors in the event of bankruptcy, and risk losing all of their assets if Coinbase goes under.
And shareholders are like “oh noes even less revenue… perhaps”
I just don’t get the impression it’s that rational, since the low bar Coinbase offers at all is a much higher bar or on par with all other crypto asset exchanges. I think shareholders are just thinking it meant bankruptcy incoming.
Normally, money you store in a bank is not subject to forfeiture if the bank shuts down. The FDIC insures about $250k (per accountholder per institution, not per account), and the account is sold to other banks to take over. (Meaning, they become the new bank managing the account.) Theoretically, the excess of $250k is not guaranteed but in the history of the FDIC accountholders have not lost money in an insured account when a bank has failed.
Money stored in an uninsured account is subject to forfeiture in the event of a bankruptcy, and all crypto accounts are uninsured accounts. The issue is that Coinbase has been advertising itself as a bank for crypto, and it turns out it really isn't.
So both sides share the blame here: Coinbase for lying, and its users for not making sure that it's actually the kind of financial institution where their assets would be secure.
I just want to nitpick this a little. "Blame" implies there is a fault here. I'm a user of Coinbase and I've been very well aware nothing was insured. Even actual stock investments aren't insured. That doesn't stop me from investing in stocks or buying crypto.
I don't remember seeing Coinbase call themselves a bank so there really shouldn't be any misunderstandings here.
EDIT: Also wanted to be clear on my crypto enthusiasm level: It's a toy. Fantasy football for people who like finance more than football.
I’m determining if it’s off or not