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That's an assumption that may or may not be true. Is there any reason why Coinbase could not be operating on a fractional reserve? Or, if we want to consider Co
by jdmichal 9y ago
That's an assumption that may or may not be true. Is there any reason why Coinbase could not be operating on a fractional reserve? Or, if we want to consider Coinbase as managing a discrete asset instead of managing deposits... Shorting stocks "loans" out a stock that technically belongs to someone else; there two "positive owners" and one "negative owner" until the position is covered. So they can also operate on a fractional reserve.
- jncraton 9y agoYou are correct. However, Coinbase does state that they simply store the funds: "Customer deposits are not sent anywhere. Unlike other financial institutions, we do not lend out customer funds. 100% of your funds are securely stored." https://support.coinbase.com/customer/portal/articles/667213-does-coinbase-use-customer-deposits-for-anything- https://support.coinbase.com/customer/portal/articles/667213...