Amid FUD, Coinbase Assures Customers Their Funds Are Safe
2022.06.02 15:51
Amid FUD, Coinbase Assures Customers Their Funds Are Safe
- The Chief Legal Officer of Coinbase (NASDAQ:COIN) explained that Coinbase was financially strong.
- This statement comes amid allegations of Coinbase being in financial trouble.
- “We have more than $6B in the bank, are financially strong,” says the legal officer.
Earlier today, Paul Grewal, the chief legal officer of Coinbase, posted a Twitter (NYSE:TWTR) thread stating that Coinbase was financially strong and that investors’ funds were safe.
There’s never been a serious question that assets on @coinbase are safe. We have more than $6B in the bank, are financially strong, and have legal and operational protections for customers to invest, access, and withdraw their crypto.
— paulgrewal.eth (@iampaulgrewal) June 1, 2022
Coinbase decided to take to Twitter to make the clarification following rumors of its financial instability. A newly required SEC disclosure Coinbase made in their 10Q report created some noise about how Coinbase holds crypto assets and about what could happen in the event of the company’s insolvency. The speculations led to concern among people who hold crypto assets on Coinbase.
There’s never been a serious question that assets on coinbase are safe. We have more than $6B in the bank, are financially strong, and have legal and operational protections for customers to invest, access, and withdraw their crypto.
Grewal went on to say that investors’ assets were their own and that Coinbase only maintained internal systems, like a bank or a broker. He adds that their fully audited ledger identifies users’ holdings and tracks all activity in real time.
The legal officer also expands on the repurposing of assets. “We do not repurpose your assets without your approval,” the post reads. Many financial institutions lend and trade customer assets which means they often hold only a fraction of those funds at any given time, but the Coinbase leader states that their organization did not follow this practice. “Coinbase holds your assets 1:1 and they’re available 24/7. Always.”
Furthermore, Grewal also adds that they’ve clarified their Retail User Agreement. Reportedly, they have always protected their customer assets both legally and physically. However, they have recently updated their Retail User Agreement to expressly highlight the applicability of UCC Article 8.
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