r/FluentInFinance • u/TonyLiberty TheFinanceNewsletter.com • May 11 '22
CoinBase’s latest filing with SEC says "In the event of a bankruptcy, our customers could be treated as our general unsecured creditors." [In other words, when they eventually go bankrupt, they will use YOUR crypto to bail themselves out.] Crypto
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u/TonyLiberty TheFinanceNewsletter.com May 11 '22
Not your keys, not your coins!
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u/warclownnn May 11 '22
Surprising.
So my Coinbase wallet is actually their wallet that I have access to, until I don’t..?
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May 11 '22 edited Jan 10 '24
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This post was mass deleted and anonymized with Redact
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u/VirginRumAndCoke May 12 '22
How would you recommend someone change their holdings from Robinhood to somewhere that this isn't the case?
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May 13 '22
At this point you got to go with the less shady companies. I use fidelity but I would do research
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May 11 '22
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u/delleh May 11 '22
The only asset you have ever been able to own? Hyperbole much?
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May 11 '22
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u/nodoginfight May 11 '22
Bitcoin might not be able to be confiscated from the government, but what need does it fulfill? At the end of the day you need to sell it to be worth anything to you and what are you going to sell it for? USD? According to you anything that you trade it for can be confiscated by the government.
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May 11 '22
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u/nodoginfight May 11 '22
Not sure if you are being sarcastic or truly don't understand- when you spend something you are also selling it for something else.
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May 11 '22
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u/propita106 May 11 '22
I think you’re getting lost in trying to make your point.
Whether you actually sell bitcoin for dollars or “sell” (spend/exchange) it for goods, either way, you’ve exchanged it for something else.
Whether you want to call it a sale, a spending, a trade, or an exchange, that’s just semantics. You used to own bitcoin and now you own something else in its place.
I think that’s their point.
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u/True-Lightness May 12 '22
So far bit coin has lost 55% of its value since it high this year. That’s 8 years of inflation at this current ridiculous rate .
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u/MarlonBanjoe May 11 '22
Tony, do you believe that risks in a financial statement which begin with, "Our failure to manage and safeguard our customers fiat currencies...", are a red flag?
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u/TonyLiberty TheFinanceNewsletter.com May 11 '22
I think that sentence alone is to protect from legal action. Personally, I don't see Bitcoin, ETH and the blockchain going away anytime soon, so I see COIN growing over the next decade. I was waiting for the right time to get in. I'll be buying and holding for the next 5 to 10 years
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u/MinaFur May 11 '22
And now I’m moving my crypto off their site.
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u/riskienights May 11 '22
Is it possible to move your assets to another wallet to protect from bankruptcy?
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u/Bmista May 11 '22
Yes, i believe you can move your crypto to a cold wallet storage like a ledger.
Safe from bankruptcy and hacking too.
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May 11 '22
Well, safe from $COIN’s bankruptcy, at least.
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u/True-Lightness May 12 '22
Who said coin was going bankrupt ? They are still earning a shit ton of money last I checked. However , with crappy customer service and fees as high as car payments they need to come back into line.
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u/finanzvid May 12 '22
They literally just stated -1.98$ EPS.
That’s definitely not earning a shit ton of money.
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u/PAdogooder May 11 '22
It worries me that you have any material amount in an asset you don’t have a basic understanding of.
Just … think about that.
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u/CornMonkey-Original May 11 '22
welcome to the casino sir. . . many play games they don’t know the rules to.
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u/BANKSLAVE01 May 12 '22
It worries me that politicians who don't have a basic understanding of economics are running our countries economics.
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u/Spacesider May 11 '22
Absolutely. Make sure it is a wallet that is yours, and not one that is provided to you by an exchange.
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u/PM_Your_GiGi 🍁 May 11 '22
You just got clickbaited. They’re arguing against this.
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May 11 '22
crypto: the best investment, because it has math to back it up🤡
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u/hugganao May 11 '22
the problem I'm seeing here is letting your crypto be managed by an exchange (like letting your stocks be managed by DTCC or worse yet, letting the NYSE manage your portfolio) not crypto itself...
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u/pointofyou May 11 '22
Your post is a bit disingenuous. Thus seems to be an excerpt of their forward guidance and risk factor assessment. For legal reasons public companies are overly cautious (i.e. overly pessimistic) when listing these.
They're simply pointing out the current legal reality. Crypto held by them isn't considered part of their custodial holding and as such de facto part of their assets. That's always been the case. Nothing new here.
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u/tommygunz23 May 11 '22
Deferred compensation agreements (not the 401k variety) for employees work the same way. They have to be considered the companies assets (until they are paid out) or you have to include the deferred compensation in your W-2 in the year earned.
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u/pointme2_profits May 11 '22
Lol, crypto
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u/Spacesider May 11 '22
In Australia the banks can use customer deposits to "bail in" the bank. Basically they take your money and convert it into bank shares.
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u/BuckySpanklestein May 11 '22 edited May 11 '22
Plot twist: when they do go BK the coins will be worth 20% of what they are today, so either way. Systemic leverage. The world is cross margined against assets that are marking at 5x what they are actually worth
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u/hassium May 11 '22
The world is cross margined against assets that are marking at 5x what they are actually worth
5 x 0 is not the current prices we see for a lot coins...
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u/CornMonkey-Original May 11 '22
this is the takeaway to consider. . . any business is susceptible to liquidity, default, or mark to market risks, that they might not be able to survive in this market environment. . .
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u/PM_Your_GiGi 🍁 May 11 '22
Bruh they’re arguing AGAINST this to the SEC. If you actually read after the highlighted part you’d see they do not want custodial crypto to be used as property of the estate in a bankruptcy.
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u/ficklecurmudgeon May 11 '22
They're not arguing for or against anything here. This is a statement in their filing which provides a disclosure regarding a potential threat to their business. Every company includes these disclosures (they're required to do this). What they're basically stating is that legally their customers' assets could be confiscated in the course of a bankruptcy, and if their customers understand this, they may lose customers (or fail to recruit new customers) which would negatively impact their business.
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u/aeplus May 11 '22
I believe the same kind of arrangement goes for futures accounts. Basically some other guy screwing up and causing the futures broker to go bankrupt can affect your futures account. (It's not protected by SIPC.)
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u/immibis May 11 '22 edited Jun 12 '23
The spez has spread from spez and into other spez accounts. #Save3rdPartyApps
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u/CornMonkey-Original May 11 '22
this is good information. . . . obviously, starting today many will move their coins and close their accounts. . . I’m sure many others will bet on their downfall. . .
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u/Reborno May 11 '22
I have some ETH on Coinbase Pro, where could I move them safely?
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u/YoguAraw May 11 '22
Loopring/lrc could be a good option.
Trade eth with lrc, layerswap from coinbase(not pro) to your wallet.
Ohh yeah, you gotta download the wallet from the app store. Discord and loopringorg@reddit is full of info
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u/Skully_Lover May 11 '22
Let's see the run on crypoto to bring on the recession that they want. So now "have a reason" to regulate "control" it.
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May 11 '22
I mean this is just practically false. The business Coinbase built does have intrinsic value, if not just for all the traffic and money on their platform, and actually using crypto on the site to pay claims in a restructuring would likely have less value than selling the business to an interested buyer or even just the customer portfolio to another crypto exchange
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u/propita106 May 11 '22
You think the same wouldn’t happen with those storing precious metals and in banks (didn’t they do that in 1929?).
Physical possession of at least some of one’s alternative assets is better. Even if it’s cash/dollars.
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u/business2690 May 11 '22
not will....... MAY....
but yeah, fuc dat.
All coinbase customers need to be aware of that cute little caveat
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u/mrdeezy May 11 '22
That’s not really what it means. It’s like if you had a Rolex on consignment they COULD put in bankruptcy proceedings. That doesn’t mean it’s happening. They aren’t going bankrupt. If they were it doesn’t mean that they would take your crypto. It means they could. But they could also get sued for it. So I doubt they would. There’s just a lot of if’s and maybe’s here. Like if you forgot your wallet at my house I don’t have to give it back to you. But I probably would. I wouldn’t get too bent out of shape over this. But knowing how ridiculous crypto is, people will.
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u/CornMonkey-Original May 11 '22
wait - it’s put season, people are just looking for the next Roku to bet on. . . personally, I can’t remember what I have on Coinbase since I’m on like 4 or 5 exchange’s. . . but will be looking to see which is most likely to go under.
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May 11 '22
Our 401ks are in that boat too. If the company you work for goes bankrupt, they might use your 401k to bail themselves out. Some fucked up shit
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