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I don't trust Wells Fargo to handle cryptocurrency securely. Don't they have rampant internal fraud problems already?

by cwkoss 6y ago

ineedasername 6y ago
Wells Fargo's fraud issues have been on their retail branch side. Of course that's should be a warning sign for other parts of their operations too. There's plenty of other options though. As for trusting them, I'm pretty sure they're on the hook for the $$ they owe you even if their wallet gets stolen. If someone hacked their brokerage accounts and stole your 1000 shares of Apple, they'd still owe you 1000 shares. Of course this could also be where Coinbase's niche ends up: providing the backend infrastructure for traditional wealth management companies to handle the crypto plumbing for them. If I were Wells Fargo or similar and wanted to offer crypto services to my wealth management customers, I'd much prefer using Coinbase as a turn-key solution for it than try to roll my own setup. Or simply buy Coinbase itself and have a huge strategic advantage over competitors. Of if I were in a position to make such decisions, I'd be too busy swimming through my piles of money, lighting cigars with $100 bills, and sipping single malts older than my great grandfather to bother posting here from my armchair where I have not a single horse in the game.
- thebean11 6y ago
  You can't steal shares the way you can cryptocurrency, it's an entirely different thing. A brokerage might be the "custodian" of your shares, but you still have control over them, and there's a massive paper trail to prove that. Borderline impossible to steal. Crypto is a different story.
  - ineedasername 6y ago
    Crypto being easier to steal wouldn't really change the legal obligations of a wealth management firm acting as its custodian. There can be a massive paper trail, and blockchain trail, to prove that too. I'm not sure I really see a distinction here. It's also not impossible to steal, wealth managers do it from time to time, it's embezzlement, and the banks make the person whole. It happened to my grandfather: His manager at the bank converted assets to money and took the money. They got caught, and my grandfather got his money back.
    - thebean11 6y ago
      Sure, but if the theft is large enough the bank may not be able to cover it, I guess depending on the terms of their insurance. Easier to steal, to me, means higher chance of insolvency.
      - cwkoss 6y ago
        Imagine if a bank had a billion dollars of BTC that got stolen while prices were rising, and they had to rebuy on market to cover their liabilities. If that happened, and the public became aware, prices would shoot up as everyone tries to frontrun the bank. Wouldn't be surprising if the bank had to spend 2x+ to cover.

I don't trust Wells Fargo to handle cryptocurrency securely. Don't they have rampant internal fraud problems already?

by cwkoss 6y ago

I don't trust Wells Fargo to handle cryptocurrency securely. Don't they have rampant internal fraud problems already?

Wells Fargo's fraud issues have been on their retail branch side. Of course that's should be a warning sign for other parts of their operations too. There's plenty of other options though. As for trusting them, I'm pretty sure they're on the hook for the $$ they owe you even if their wallet gets stolen. If someone hacked their brokerage accounts and stole your 1000 shares of Apple, they'd still owe you 1000 shares. Of course this could also be where Coinbase's niche ends up: providing the backend infrastructure for traditional wealth management companies to handle the crypto plumbing for them. If I were Wells Fargo or similar and wanted to offer crypto services to my wealth management customers, I'd much prefer using Coinbase as a turn-key solution for it than try to roll my own setup. Or simply buy Coinbase itself and have a huge strategic advantage over competitors. Of if I were in a position to make such decisions, I'd be too busy swimming through my piles of money, lighting cigars with $100 bills, and sipping single malts older than my great grandfather to bother posting here from my armchair where I have not a single horse in the game.

thebean11 6y ago
You can't steal shares the way you can cryptocurrency, it's an entirely different thing. A brokerage might be the "custodian" of your shares, but you still have control over them, and there's a massive paper trail to prove that. Borderline impossible to steal. Crypto is a different story.
- ineedasername 6y ago
  Crypto being easier to steal wouldn't really change the legal obligations of a wealth management firm acting as its custodian. There can be a massive paper trail, and blockchain trail, to prove that too. I'm not sure I really see a distinction here. It's also not impossible to steal, wealth managers do it from time to time, it's embezzlement, and the banks make the person whole. It happened to my grandfather: His manager at the bank converted assets to money and took the money. They got caught, and my grandfather got his money back.
  - thebean11 6y ago
    Sure, but if the theft is large enough the bank may not be able to cover it, I guess depending on the terms of their insurance. Easier to steal, to me, means higher chance of insolvency.
    - cwkoss 6y ago
      Imagine if a bank had a billion dollars of BTC that got stolen while prices were rising, and they had to rebuy on market to cover their liabilities. If that happened, and the public became aware, prices would shoot up as everyone tries to frontrun the bank. Wouldn't be surprising if the bank had to spend 2x+ to cover.