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Wait, can someone explain to me why they would explicitly announce it like this? This almost sounds like they're expecting to go bankrupt, or have plans to clos

Wait, can someone explain to me why they would explicitly announce it like this? This almost sounds like they're expecting to go bankrupt, or have plans to close the platform. In the last 7 days they have lost over 50% value, and dropping a news bomb like this is only going to make it worse, isn't it?

kasey_junk 4y ago
They are required to do so by the SEC.
ergonaught 4y ago
I'm sure someone could. To quote, "In comments shared on Twitter, Coinbase CEO and founder Brian Armstrong said the exchange had "no risk of bankruptcy," and that the disclosure was made due to new rules set by the U.S. Securities and Exchange Commission regarding public companies that hold crypto assets on behalf of others."
onlyrealcuzzo 4y ago
Is something amiss with USDC? If it's even partially backed by other cryptos, it could implode pretty soon.
- legutierr 4y ago
  It's fully backed by cash held at US banks and by US Treasuries, per my understanding. And this disclosure did not pertain to those reserves, which are held in trust on behalf of customers as per state money-transmitter laws, which customers would presumably not be treated as unsecured creditors, but only to cryptocurrencies held in Coinbase-controlled wallets.
luciusdomitius 4y ago
3 months ago J Powell (of Kraken, not Fed lol) adviced his users not to keep their crypto on his exchange[0]. Not the best business move either. A possible explanation might be provided here: https://twitter.com/jespow/status/1498112744754606081 https://twitter.com/jespow/status/1498112744754606081 0. https://twitter.com/jespow/status/1494462097161220104?lang=en https://twitter.com/jespow/status/1494462097161220104?lang=e...
next_xibalba 4y ago
This is a formal filing with the SEC [1]. Companies are either incentivized or outright mandated to disclose every possible risk, even those which are highly improbable. In this case, due to new regulations that directly affect Coinbase, customers' claims in a Coinbase bankruptcy are clarified. Also, some implications for the accounting thereof. Coinbase is not a bank, and assets of customers are not insured. Thus, customers would probably not be made whole in the event of a bankruptcy. Coinbase says it is possible that these facts could harm business if current or potential customers find this risk sufficient to reduce, halt, or not start doing business with Coinbase. The filing says nothing about how probable a bankruptcy is, but Brian Armstrong, Coinbase CEO, has given his perspective on this topic here: [2] Here is the lede: "We have no risk of bankruptcy." [1] https://d18rn0p25nwr6d.cloudfront.net/CIK-0001679788/89c60d81-41a2-4a3c-86fb-b4067ab1016c.pdf https://d18rn0p25nwr6d.cloudfront.net/CIK-0001679788/89c60d8... [2] https://twitter.com/brian_armstrong/status/1524233480040710144 https://twitter.com/brian_armstrong/status/15242334800407101...
matwood 4y ago
Read any company annual report and you'll see all sorts of risks listed. Amazon lists war and other geopolitical events for example. This isn't to minimize that bankruptcy is a risk, just that it doesn't mean it is imminent.
- kristopolous 4y ago
  They're extremely fun to read sometimes bordering of fantasy and fiction. I don't think I've seen one mentioning the undead crawling their way to the surface from their earthen tombs but I probably just haven't read enough Rest assured if I ever go public I'll insist on putting a few in there. A battalion of armored octopi marching ashore with undefeatable sea ordnances enslaving humanity by tentacle could prevent us from hitting our quarterly numbers... I've put so many hidden jokes like that in terms of service and privacy policies over the years.

kasey_junk 4y ago

They are required to do so by the SEC.

ergonaught 4y ago

I'm sure someone could. To quote, "In comments shared on Twitter, Coinbase CEO and founder Brian Armstrong said the exchange had "no risk of bankruptcy," and that the disclosure was made due to new rules set by the U.S. Securities and Exchange Commission regarding public companies that hold crypto assets on behalf of others."

onlyrealcuzzo 4y ago

Is something amiss with USDC? If it's even partially backed by other cryptos, it could implode pretty soon.

legutierr 4y ago
It's fully backed by cash held at US banks and by US Treasuries, per my understanding. And this disclosure did not pertain to those reserves, which are held in trust on behalf of customers as per state money-transmitter laws, which customers would presumably not be treated as unsecured creditors, but only to cryptocurrencies held in Coinbase-controlled wallets.

luciusdomitius 4y ago

3 months ago J Powell (of Kraken, not Fed lol) adviced his users not to keep their crypto on his exchange[0]. Not the best business move either. A possible explanation might be provided here: https://twitter.com/jespow/status/1498112744754606081 https://twitter.com/jespow/status/1498112744754606081 0. https://twitter.com/jespow/status/1494462097161220104?lang=en https://twitter.com/jespow/status/1494462097161220104?lang=e...

next_xibalba 4y ago

This is a formal filing with the SEC [1]. Companies are either incentivized or outright mandated to disclose every possible risk, even those which are highly improbable. In this case, due to new regulations that directly affect Coinbase, customers' claims in a Coinbase bankruptcy are clarified. Also, some implications for the accounting thereof. Coinbase is not a bank, and assets of customers are not insured. Thus, customers would probably not be made whole in the event of a bankruptcy. Coinbase says it is possible that these facts could harm business if current or potential customers find this risk sufficient to reduce, halt, or not start doing business with Coinbase. The filing says nothing about how probable a bankruptcy is, but Brian Armstrong, Coinbase CEO, has given his perspective on this topic here: [2] Here is the lede: "We have no risk of bankruptcy." [1] https://d18rn0p25nwr6d.cloudfront.net/CIK-0001679788/89c60d81-41a2-4a3c-86fb-b4067ab1016c.pdf https://d18rn0p25nwr6d.cloudfront.net/CIK-0001679788/89c60d8... [2] https://twitter.com/brian_armstrong/status/1524233480040710144 https://twitter.com/brian_armstrong/status/15242334800407101...

matwood 4y ago

Read any company annual report and you'll see all sorts of risks listed. Amazon lists war and other geopolitical events for example. This isn't to minimize that bankruptcy is a risk, just that it doesn't mean it is imminent.

kristopolous 4y ago
They're extremely fun to read sometimes bordering of fantasy and fiction. I don't think I've seen one mentioning the undead crawling their way to the surface from their earthen tombs but I probably just haven't read enough Rest assured if I ever go public I'll insist on putting a few in there. A battalion of armored octopi marching ashore with undefeatable sea ordnances enslaving humanity by tentacle could prevent us from hitting our quarterly numbers... I've put so many hidden jokes like that in terms of service and privacy policies over the years.