Bitcoin Forum

I just came across this shocking news:
A recent Tweet by Samson Mow (@Excellion) suggested that Coinbase isn’t a safe place to store Bitcoin. Specifically, Mow suggested that the company would be the first to comply with a 1933-style confiscation demand by the federal government.
I think Coinbase is no longer a good place to hold bitcoin.
What do you think?
I am really disappointed with this development and I hope others will not follow the example of Coinbase.
Source: https://beincrypto.com/coinbase-called-out-on-twitter-for-working-with-irs-and-dea/ (https://beincrypto.com/coinbase-called-out-on-twitter-for-working-with-irs-and-dea/)

As far as I know, even in the past, using coinbase or any exchange/ custodial wallet isn't a safe place to store bitcoin or any other altcoins as they are taking away your power to use bitcoin independently. It is definitely defeating the purpose of having a financial sovereignty at the first place. It is exponentially better to create your own wallet with seed phrase written on a piece of paper rather than entrusting your coins to a "third party"

Also, I fear that at some point they are going to tax cryptocurrency holders  ???
 

This is actually far worse than having no control over your funds. Having no self-custody of your funds on exchanges is understandable as you'd need to make that sacrifice(albeit temporarily) to actually easily buy and sell coins on exchanges. Actually working with the authorities though? That's pretty much them throwing their users under the bus; regardless if they intentionally wanted to work with the authorities, or if they were just forced to cooperate.

Quite unfortunate for a platform that has had a really big impact in Bitcoin's adoption. But I guess as Coinbase grew bigger, it became inevitable. Honestly, expect the same with the beloved big exchanges like Binance. It's mostly just going to be a matter of when.

There's one Twitter poll by crypto analyst/trader John Roger about this issue:

https://i.imgur.com/pmUsxll.png

https://twitter.com/Josh_Rager/status/1269376636467777538

And obviously, majority didn't like it, as 66% voted that they are more willing to delete their Coinbase account.

This is the official documents from IRS:

We already have a thread on that topic -> Coinbase the most anti-Bitcoin organisation. Make #DeleteCoinbase great again. (https://bitcointalk.org/index.php?topic=5253616.0)

And in that regard, I can only ask a question to anyone who thinks it is shocking - is there anything strange in the USA, a country where people are still being killed for the color of their skin? Let no one be shocked one day if Coinbase announces that all funds of all users have been frozen due to suspicion of terrorism, money laundering, undermining of financial sovereignty or something similar.

Yet perhaps the recent news combined with a very frequent outage has resulted in the withdrawal of record amounts of BTC from this exchange. Only time will tell if this is just an immediate reaction, or users will start moving their funds on an even larger scale.

Users Punish Coinbase for Outage by Withdrawing Record Amount of BTC (https://cointelegraph.com/news/users-punish-coinbase-for-outage-by-withdrawing-record-amount-of-btc)

#DeleteCoinbase

Fortunately people have been pulling out funds since the June 1st due to the outage. And now this; Coinbase is finally getting the taste of their own medicine: https://cointelegraph.com/news/users-punish-coinbase-for-outage-by-withdrawing-record-amount-of-btc

you must have a bank account and you undoubtedly know that anything private and needs a license issued by the government and needs to operate in accordance with the laws established by the government the owner of the private thing will do anything to please the government and its business will continue to operate well without any problem. This is not something new and around the world Is how things work


if other exchanges are private, have a license and need to operate according to government laws, of course they will do the same thing that coinbase did

Was it really a secret anyway? Coinbase was one of the first licensed exchanges in the crypto field. They were the first exchange to send out 1099-K and 1099-misc forms to their US clients since 2018. So it is pretty much evident that coinbase is trying to integrate cryptos to the real world tax framework. I don't see any other exchanges have such a detailed tax guidelines than Coinbase.

Now if I talk about whether it's safe or not - it entirely depends on how you have acquired your bitcoins. If you have a grey history of bitcoin acquisition, you would definitely try to run away! But if you  have a clean background and also planning to pay taxes, you shouldn't worry at all!

Coinbase or any other exchange was never a good place to store coins. All these hacks, all these account freezes, KYC crap, SegWit2x and other shitcoin bullshit, humongous fees that far exceed the network fees - just some of the reasons why it's dumb to store coins there. People who do so are just noobs who don't know that wallets exist, or don't bother to learn more.


Twitter polls have little to do with reality because of the huge bias that they have - it's better to look at Coinbase wallets and see if they grow thinner or no.

But you can get a good gauge at the current sentiments of crypto traders on this issue/accusations against Coinbase. I don't know if there are services that track Coinbase or any other exchanges wallet.

To the OP, it will be good if you can add a poll and see what the feeling of this community as well and see if there are "bias" as well.

It doesn't make sense to handle your decentralizedcurrencies on centralized exchanges. They are required to comply with local governments if they want to stay in business, and they will do everything they possibly can to stifle truly decentralized finance.

There are alternatives--->https://localbitcoins.com/, https://www.virieproject.com/

Exchanges are not meant for storing coins, but we just can't let them withdraw as its convenient for users to just store their tokens there for easy trading, they can easily cash out too. The worse that could happen is almost here. It would be a surprise if you withdraw coins later, you'd be prompt to the information presented that IRS is deducting an amount as a tax in BTC  ;)

The issues in crypto just wouldn't dry up, there is always going to be a reason for the price to be dumped with just simple tweet.

This community outrage due to this controversy has almost nothing to do with self custody of your funds. It's that Coinbase is handing over your information to the authorities. How is withdrawing your funds any different in this case? It's your privacy that's getting slaughtered, not the ownership of your coins itself. It's harmful even if you literally withdraw your coins the moment you bought them.

And probably that's the main reason why IRS is interested and Coinbase willing to be an accomplice here.


It just always been the case, "buy the rumor, sell the news".

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I guess it's downhill for Coinbase with this one, and maybe this is their plan all long when they acquired Neutrino. But it sure does back fire on them. And for $13.5 million, its a bad investment.

When I joned this forum years aho one of the first things I read was: never store your Bitcoins on exchanges.

Coinbase and other centralized exchanges are only good for buying and selling and then once the transaction is done you're supposed to move coins out of it to your desktop or hardware wallet.

I really don't care that they work with the IRS because I'm not a US taxpayer.

I have referred to Coinbase as the PayPal of Cryptocurrency for years now. Coinbase was great when I first got going in Bitcoin/ Cryptocurrency, but as time went on it was clear they were a scummy/untrustworthy outfit.

This is the same company that was raking in millions but would take weeks to respond to inquiries. They constantly froze theirs exchange, and it’s still happening. Maybe this could be excused as early mistakes and lack of infrastructure, now there’s no excuses to be had. It’s clear to me they do this to skim profits. They also operate under their own personal moral guidance, banning you as they see fit. They’ve banned countless people for nothing at all. Use someone else and at the very least never leave funds there or on any exchange for that matter.

I am sure that Coinbase is feeling some heat on the seat right now with this latest exposed development of them so willing to work with the IRS and DEA sharing information which can be detrimental to their users. But we should not be shocked of this since Coinbase is just another corporation that is working for profit and will not compromise that goal in any way. Not cooperating with the government can have dire consequences of their business and so Coinbase has no choice but to extend a helping hand with governmental agencies. Users now have the choice and I hope they will really look for alternatives.

nothing has changed! Coinbase has never been a good place to hold bitcoin from the day it started.

which is what i find absurd about these temporary social media storms. every now and then (similar to proof-of-coins time each year) people take to the social media and start complaining then after a very short time they go back to whatever they were doing before and forget about all of that.

the worst part is that ALL centralized exchanges are more or less alike. singling out one seems more like having an agenda against that particular company. otherwise they are all working with 3 letter agencies and worse. if they weren't then they would have been shut down a long time ago just like how btc-e was.

It's not good at all, you're selecting from subscribers of a twitter account, so these users are more likely to share the same views as the author of the poll, in this case opposing Coinbase. If you made a random selection of Coinbase users, it might have shown a different picture. Lots of users just use Coinbase as their wallet and don't participate in the Bitcoin community, and if they are a big part of Coinbase users, then they could be operating even if some customers will leave.

What else were you expecting? Coinbase is a centralized crypto exchange and they are being regulated and for sure would do anything that the government ask them to do. I do make use of Coinbase but I don't use it all the time, just use it sometimes when I want to trade some cryptocurrencies that are accepted on their platform.

One thing with these centralized exchanges, what I like much about them, is that they are really easy to make use of. They are not complicated like DEX, they are just simple and secure, you have nothing to risk since they are the ones handling every trade you make. But, for the reason of convenient-to-use, I guess we cannot sacrifice all our privacy and freedom. I wish coinbase must leave of USA and by changing their head quarter to some land of freedom they may remain serving this crypto community otherwise people will start forgetting them.

Yeah, I phrased my words a bit poorly, what I wanted to say is that Coinbase was never a good place to do any operations with crypto, be it storing, buying or trading, because of their long history of doing anti-consumer moves. Coinbase and other exchanges that have similar track record should be avoided like a plague. I recommend that people try to find some decent local exchange if possible, they'll likely be much more user-friendly than those giants.

most centralized exchanges are of course working for the government as they are getting licensed under their Central Bank. So it is actually not a surprise that they are working with those agencies. Even your local crypto exchange is under the government's supervision because they need to get their license before they can operate. but coinbase is really showing a lot of cons lately, like the shutting down of their site when bitcoin starts to rise and many others. anyway, as a crypto user, you have a lot of choices not to use such exchange. there are a lot better than them and like BNB, they don't require KYC if you are dealing with 2btc below. So that's a good deal already for a small-medium crypto user.

From the start, any centralized wallet that has KYC is not really good wallet to hodl coins. Better choose a wallet that you have control over your private keys or much better a hardware wallet. I guess the majority is using Coinbase because of its convenient feature, you can cash in and withdraw in selected countries through banks and that's it but their coins are not staying there for a long time, it is just a gateway for me.

Why do people use coinbase in the first place? It goes against everything crypto stands for. You taking decentralized money and making it centralized giving it to these guys. Why would you want to do that it beyond me.
I never have and never will use coinbase or any exchange that asks for KYC. They can KYC my ass. Also, America is obsessed with drugs and punishing people for using them. DEA is an insane organisation just like the IRS thugs. God, I count my blessings not to live in such a horrible place.

Coinbase has been the subject of a lot of issues even in the past years where it unknowingly freezes accounts and the balances of its users strangely disappears.
This site should be avoided by Bitcoin users because if the US government decides to regulate it and conduct investigation then all assets will be handed over to the authority.

It's true, but it's no different to any other platform that's licensed in the United States as a money transmitter.

That's why you should only store cryptocurrencies on reputable platforms that are hosted in countries that can't be touched by the IRS or FCA.

There's plenty of countries like this, e.g. Bermuda, Panama, Swizerland, Malta etc.

I personally keep all my money on a hardware wallet, but when I trade, I make sure to stay well away from platforms that serve US users.

The wrong decision made by Coinbase in working with the IRS and DEA. Because coinbase users will definitely move to other exchanges.
But from the beginning I had never trusted exchanges, I only used exchanges for trading. For investment or save coins I prefer hardware
wallet. Actually I am really disappointed with Coinbase's decision, even though I have been more than 2 years use coinbase. And now must
move to other exchanges.