Reddit Users Report Problems With Coinbase, Questions Celsius Like Policy
Crypto exchange Coinbase has come under fire as rumors of potential insolvency continue to grow. Now, Reddit users have started pointing out problems with Coinbase including withdrawals and transfers not working, Coinbase being FDIC insured, and having a Celsius-like policy where users’ digital assets become the company’s property in case of bankruptcy.
Users on Reddit Discuss Coinbase Withdrawal and Transfer Issues
Reddit users today reported facing withdrawal and transfer problems on Coinbase, some people reported missing US dollar transactions and problems with transferring from Coinbase Wallet to Coinbase.
CryptoWhale in a tweet on Tuesday said Coinbase is deleting users’ comments regarding customers facing withdrawal issues under the subreddit “r/CoinBase”.
During the withdrawals and transfers issue discussions, users raised questions over Coinbase having Celsius-like terms and conditions that make customers’ digital assets as the company’s property in case it becomes bankrupt. In May, Coinbase CEO Brian Armstrong confirms the addition of disclosures due to rules set by the Securities and Exchange Commission (SEC). He said:
“Because custodially held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings and such customers could be treated as our general unsecured creditors.”
Coinbase’s CEO reassured users that their funds are safe and apologized for not communicating the risk to customers during its addition.
Reddit’s users discussed the problems of cryptocurrency not being backed by the government. Hence, Coinbase is not FDIC insured. If Coinbase fails or goes bankrupt, the FDIC insurance on crypto assets may not be applicable.
According to Coinbase’s policies on cash insurance, FDIC pass-through insurance protects funds only in fiat. Coinbase deposits customer funds in some of the big banks.
Things Happening in the Crypto Exchange’s Favor
Amid the circulating rumors, the crypto exchange continues to work on its mission to expand its presence in Europe. Coinbase on July 18 received a crypto asset service provider approval in Italy.
Moreover, Coinbase’s share price jumped 9% to $58.67 on the back of a massive recovery in Bitcoin and Ethereum prices on Monday.
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