Temporary withdrawal is impossible with Coinbase in the midst of a plunge in Bitcoin, and there is a risk that the user's virtual currency will melt due to bankruptcy


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Marco Verch Professional Photographer

It was reported that Coinbase, a major cryptocurrency exchange, could not withdraw temporary funds while Bitcoin and Ethereum plunged across the board and the cryptocurrency market was confused. The stock price of Coinbase has fallen sharply due to the deterioration of business performance, and it is warned that if Coinbase should go bankrupt, customers will not be able to withdraw the assets entrusted to the company. In response to growing concerns, Coinbase CEO Brian Armstrong issued a statement that 'there is no risk of bankruptcy.'

Coinbase experiencing major outage as crypto prices plummet --The Verge
https://www.theverge.com/2022/5/12/23068996/coinbase-outage-withdrawal-cryptocurrency-bitcoin-price-crash

Bitcoin (BTC) price falls below $ 26,000 as crypto sell-off intensifies
https://www.cnbc.com/2022/05/12/bitcoin-btc-price-falls-below-27000-as-crypto-sell-off-intensifies.html

Bitcoin Price Rebounds After Fall Below $ 26,000 --WSJ
https://www.wsj.com/articles/bitcoin-falls-to-26-000-as-crypto-selloff-intensifies-11652340653

Coinbase admits users may lose crypto if exchange goes bankrupt | Fortune
https://fortune.com/2022/05/11/coinbase-bankruptcy-crypto-assets-safe-private-key-earnings-stock/

Coinbase said on May 13, 2022, 'We are having problems with some customers trading and accessing their accounts with Coinbase and Coinbase Pro. Your funds are safe and we have this. We are actively working on the issue, 'he said, revealing that the customer's account was faulty.



Coinbase then announced that the issue had been completely fixed and said it was still watching the situation.



This access failure was caused by the instability of the cryptocurrency market, which caused a lot of turmoil among Coinbase users. One user told Reddit, a bulletin board social news site, 'I couldn't log in to Coinbase and Coinbase Pro on both the site and the app. Did the bear market crash Coinbase's server? Someone wants to trade fast? Then I'm very scared. '


According to Coin Metrics, a financial information service that specializes in cryptocurrencies, the Bitcoin market on May 12 temporarily dropped to $ 25,401.29 (about 3.28 million yen), and it was a big $ 26,000 for the first time in 16 months. He said he interrupted the platform. In addition, Ethereum has also fallen below 2000 dollars (about 258,000 yen) for the first time since June 2021, and the virtual currency TerraUSD , which should have been pegged 1: 1 with the dollar, fell 99.9% to the dollar. The turmoil in the cryptocurrency market has spread to stable coins, such as the collapse of interlocking.



Concerns about Coinbase were that the company's financial results revealed a deterioration in business performance, and Coinbase said, 'In the unlikely event of bankruptcy, the assets entrusted to us by customers may be seized.' It was spurred by. Coinbase announced in its first quarter 2022 (PDF file) earnings report released on May 10 that revenues were down 27% year-on-year. As a result, the company's stock price has fallen by more than 50% from its November 2021 high.

In addition, Coinbase said in a (PDF file) report filed with the US Securities and Exchange Commission (SEC) that it holds a total of $ 256.0 billion in fiat money and cryptocurrencies for its customers. 'Cryptocurrencies stored for our customers may be subject to bankruptcy proceedings,' he said. According to the business magazine Fortune, this means that if Coinbase goes bankrupt, the customer will be a 'general unsecured creditor' and will no longer have the right to request a refund of their assets during bankruptcy proceedings. ..

For example, the funds of customers deposited in banks are protected by law, so even if a bank goes bankrupt, it will be protected up to $ 250,000 (about 32 million yen) in the United States and up to 10 million yen in Japan. Will be done. However, Fortune pointed out that Coinbase can tamper with the cryptocurrencies in its users' accounts in the event of an emergency, as the crypto exchanges have not yet had such legislation.

In response to growing concerns, Coinbase CEO Armstrong tweeted , 'There is no risk of bankruptcy.' 'It is unlikely that the court will consider the customer's assets as part of the company's assets in bankruptcy proceedings,' he said in a report to the SEC in question.

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