Bitcoin Forum

In the future there will be billions of dollars stored in Wallets, what if one day they decide to stop and shut down their services and transfer all the money to their own wallet and confirm the transactions and convert all of their coins(Bitcoin and any other Altcoins) to USD and disappear?
How can we get our money back? whom can we sue? how can we prove how much coins we had in their wallet? 

I think it's a possibility. Many of the wallets in the past ran away......

Then what benefits does it have against bank accounts when there is no security guarantee?!
In bank accounts if the bank you have money in, bankrolls, up to an amount guaranteed by central bank will be given back to you by central bank.
but in Coin Wallets, it's like you give your money to an unknown person and ask them to hold it safe and secure for you!! is't that idiotic?

WTF thats fucking scenario ;D. But I think, they will not escape easily. Because there will be many people around the world looking for them. They will never be calm in their lives when doing such a thing.

But how they will be able to transact without password.  Password is in owner's custody how any other person even including wallet owner can make transaction. 
Though they may close their business and in this case I think owners of coins in their exchange will be suffering loss.  But chances of closure are very low because business is handled by group of persons.  One may quit other may enter.

I’m pretty sure your money is safe with Coinbase, aren’t they government insured or some shit? I don’t use them any way but if you want peace of mind & absolute sole ownership of your coins then you need to be the only person with access or in control of your private keys.

It has happened in the past which is why you should never store too much of your coins on the exchanges. Hold most of it on your own computer or an offline wallet, for exchanges just keep the amount you wish to trade with, an exchange can be hacked or closed at any time

You're describing an exit scam. Many wallets and exchanges have exit scammed. This is why you should never use exchanges as wallets, or use hosted/web wallets. The old saying goes, "If you don't control the private keys, you don't own the bitcoins."

Coinbase is probably the least likely to cut and run. They're really transparent and hold licenses where they operate. But they could always get hacked or otherwise compromised and lose customer funds that way. If that happens -- worst comes to worst -- they declare bankruptcy and leave things to the courts.


USD in their custody is FDIC-insured. Maybe other fiat money is insured, too. But cryptocurrency definitely isn't.

Whether or not Coinbase will get hacked or not, will just simply run away with your money or not, it's still best to hold your bitcoin on your own wallet whereas you control the private keys. That way, you truly have ownership to your bitcoin.

They are registered company, mostly based in US, Canada so it like a bank scam your money, i think that it is impossible.
Anyway, if you are still worry about them, you should use blockchain wallet.

There is always a risk when you keep your funds in an exchange wallet or other wallet you don't own your private keys of. An exit scam is highly unlikely but theoretically possible. I personally think that the risk of a hack would be higher.

It is why you should not keep your funds on exchanges. Only have it on the exchange if you are trading. Keeping them in cold storage would be the safest.

By the way, all digital currency that Coinbase holds online is insured. If Coinbase were to suffer a breach of its online storage, the insurance policy would pay out to cover any customer funds lost as a result. Coinbase holds less than 2% of customer funds online. The rest is held in offline storage.

Some cryptocurrrency exchanges are regulated by governments, meaning that the government know who owns that exchange so this is probably an unlikely scenario. If a regulated exchange do this, of course it is easy to sue them. And also, if they will take all the cryptocurrency on their service and sell it for fiat, it is now possible to trace the person who did it. But as an investor, if you really care about the security of your coins, why would you trust other services to do it for you if you can secure them by your own? many people are missing the point that exchanges and wallet have different functions, exchanges should not be used as a wallet, it should only be used for trading.

That's why it not advisable to store your coins in a wallet wherein you don't hold your own private key. As long as they have access to your coins then it is considered not totally yours. As what others say, it is not your coin if you don't hold the private key. Just store your coins in a hardware wallet or paper wallet as long as you hold the private key then it is your coin and it is safe. The same goes with storing your coin in exchanges. When the exchange decided to shut down then they will bring your coins as well so it would be considered as lost already. If there is no rule yet about cryptocurrencies then you cannot sue anyone.

It is possible to happen since coinbase is a centralised exchange. But I think, the owner of coinbase don't have mental disorder to do that because his name, reputation and securities are at risk when he will run out the money of the people.
If our money in cryptocurrency will totally lose, we are not compensated rather if you will lend your capital or savings in a bank, there is a chance that your money may return with due process of law.

How that idea came into your mind? You're too imaginative dude ;D

Anyway, Coinbase is a one of the most trusted wallets so I'm pretty sure that its developers will not run away with all of our money. But going back to your assumption, if they robbed all of our money then the police authorities will hunt them because what they did is against the law. It doesn't matter anymore if what they robbed is in form of fiat or crypto (which is not regulated by the government), larceny will remain larceny and it will not change.

In this scenario, I think our money will not return to us anynore unless the accused ones will tell where they hide our money. But honestly, I doubt that our money will be retrieved as exact what they have been stolen so I think we can't really do anything but to let our authorities to do the rest.  

Well that's kind of like what happened with Mt. Gox, if you look at things a certain way. They were required to pay back everyone who lost money years after the fact, in USD terms, not Bitcoin. That's probably similar to what will happen to Coinbase should it find itself in the same situation. As for proving how much, the courts will probably see to it that all data prior to the shutdown is kept and used for crediting the proper amount of money.

But yeah, it's a shitty situation to find yourself in. This is why you never use online wallets/exchanges to store a sizable amount of money. Keep it in a personal desktop/hardware wallet and you won't have to worry about any provider going out of business.

Well this is the reason why people are being told to use a non-contract wallet where your private key isn't being held by someone other than yourself because if you do not control your private keys then you do not entirely control your coins. Use non contract wallets like myetherwallet and once you register you get your own private key to keep safe by yourself without it being stored by the site.

Big services like Coinbase are unlikely to exit scam because the people behind them are well-known, and it's hard or even impossible to tumble and launder huge amounts of Bitcoins - they would be tracked sooner or later, just like it happened with Mt. Gox. But there are other risks for big exchanges, they might get hacked or their employees/owners might come up with some sophisticated scam like faking being hacked. And as for smaller exchanges, they made exit scams in the past and made traders lose money in many other ways, so in general it should be a rule of thumb to never keep your coins on exchange - the fees are so low now that it's not a problem to just send coins to exchange every time you want to sell some.

That is always a possibility as many exchanges have done this in past. You should check about the owners of those exchanges before using them.

If this is happen there's nothing we can do. Only accept the fate and try to looking for change from the loss.

There's a problem that i ever read. Where one of the exchange user lost his balance suddenly and after told the exchange there's nothing solution can be found.

While this exchange still operating.

So i mean, even exchanges that still operating can't gave any solution, how if it lost already.

So, in every effort there must be risks.

Well, In case Coinbase or any reputable company tires to scam people, they can do it but that's the only one time profit they will make. Think of a company who took 10 years to develop a repo and they can't think of losing it all for few billion dollars etc. I think Coinbase is very unlikely to do this sort of thing ever.

Many of investors will go bankrupt

It is very unlikely this would happen when the founders and operators of the exchange are publicly known. Most of the time exchanges don't participate in an exit scam, they instead get conveniently 'hacked' by some unknown party. This may be a ploy by the exchanges to siphon of some of the funds, but for the most part it is likely a genuine hack. That being said, there is a disturbing number of hacks in this arena, one might suspect that there is something fishy going on, but it is difficult to determine why, since exchanges do tend to be quite profitable, so it's a wonder why they would need to orchestrate such a thing.

For safety sake, I would recommend just keeping the bare minimum in exchanges, certainly there is more risk of you losing your funds from an exchange than from holding your coins in a hardware wallet. And remember, activate ALL the secondary security features, they might be additional hassle for now, but they will save your ass when you get phished or your account is cracked.

The coin price will be red and big dump will happen, the only way you get back your coin is report it to lawyer and police, and hope you will get refunded.

You will not be able to get your money back if they run away. It has happened in the past with a number of exchanges.

If they will run away then our coins are lost. It is hard for us to get those coins any longer except if we join forces and trace them. But this possibility have a very small probability since those wallet services company have register themselves in the Securities and Exchange Commission. They also have the permit to operate business so they cannot run without being chased by the law.

This can happen but it is not easy for them to do this. I think the law will intervene. But rest assured. They are not scammers. I think you should be confident and invest in them.

If we just keep our thinking, hard to believe that speculation will happen that might have happen. In the process of primarily accessing for "example" any address as we have only a private key is perhaps the strongest we can handle without any access to our safeguard addresses.

I agree with you on the reputation part and also this is not only about the reputation since they can go to jail for doing things like that. Basically putting questions like the OP's leads one to living in constant fear and uncertainty. To me this question is similar to "What if all the cops with all their weapons turn into gangsters ?" You can't question everything or otherwise your life might turn to be a total nightmare.

All of you just answered based on low possibility or the company's reputation or being a hard thing to do, or they will go to jail and stuff.
I don't know why do you think it is a very hard thing to do?!!
if the company is based inside the U.S, the FBI for example can get them only if they remain in the country.
It's so easy for Coinbase to do that, presume I'm the owner, I get out of the country today and go to a country like Russia or Iran, then I transfer all the coins in our database of wallets to my own physical wallet, then I convert them all to different currencies and store them in a Swiss bank, and then I shut the website down or just leave it be after clearing the database. now who can catch me? what can they do? easy money in one day.
I had to wait years to gather that much money, but now I have it in a day, and now I can start another business in another country without any trouble.

and about the "Hold your own wallet some place safe" thing, isn't that prehistoric?!!!
in the past people were putting their money under their pillow! and the banks were invented to change that and keep people's money somewhere safe for them and guarantee their money by official documents.

and now again, you are telling me I should hold my own money in my own wallet in my pocket or under my pillow??!!!
while there are so many benefits and services banks provide for us (like Bank Checks, Loans, setting withdraw limitations, and so many other services)
what does a wallet of bitcoin in your pocket do for you??!!!

what if you loose it? what if your hard drive break, and so many other what-ifs.

I think Crypto Currency is an idiotic idea in the first place. 

Then you're up shit creek.

Very few wallets control your coins these days, and any that do should be avoided completely.

As for places like Coinbase and Xapo you can sugarcoat it all you want, but no matter what the arrangement some other bastard has full control over your money and are permitting you access to it.

Of course places that well known and capitalised are not going to do a runner but there's no predicting what the future holds. If the American government can confiscate everyone's gold, which would've been a fully manual process all those years ago, imagine how much easier it would be with millions of people all herded into a couple of services.

Up shit creek without a paddle!  :D

cause if you loose your money in a bank, at least you have a paddle of suing.  

but in Crypto Currency, how on earth can you prove that you had a wallet, and how much coins that wallet had?
even if the Blockchain has the history of that wallet address, how can you prove that wallet is yours??!  ???

If, say, Coinbase lost everything in a hack on their side they do claim to be insured for that. I really, really would not want to see that insurance put to the test though.

That's a fear I have sometimes too. But coinbase is not some scam company. It has reputed and known founders. But still, if you want to keep your coins safe, store your coins in a hardware wallet.

Maybe it's one that we often question and we fear, and we can be sure we will lose our money, but I am sure all there must be handling from the authorities

Well corporations that handle sizable amounts of data typically back up everything regularly as part of a standard operating procedure. If a hack steals everything and erases everything to the point of zero recovery, then the hacked company is either completely and utterly incompetent, or the "hack" was internal. I would find the latter scenario infinitely more likely in this case. Regulators are going to be way up in their ass either way.

That being said, I don't think it's going to be a problem of proving how much belonged to you as much as them paying out the said amount.

That's the same thing as "hide your money under your pillow", what's the point? isn't a bank account better?
Crypto Currency is just a bullshit a few people made to scam the people's money out.

It's only useful for pirates, smugglers, thieves, drug dealers, scammers, who don't want their money to be traceable so that they can skip the money laundry. 

If that happens we couldn't get our money back, and this is the same reason as to why many users suggest to not store big amounts  of bitcoins and any other cryptocurrencies on exchanges  if they will not be converted to fiat or to btc.
We can sue exchange owners, staffs or admins case they do that(if their real identities are already revealed).
We can prove how much coins we had in our wallet by using the blockchain technology(specifically block explorers).

actually, it's simple. first, we cannot take our money back because they steal all of their customer's money and we don't have any chance to chase them. I don't think that we can get our money back because once they disappear, it needs a long time before they can get caught by the law but I don't think that they will be easy to catch. everything on the internet can get disappear so quick because they can move into another country without any contradiction and they can free to live in that country without thinking about any law.

Whoa, I cannot imagine that scenario will come and they'll take away all of our coins. But still, nothing is impossible and that even a secured exchange can be hacked.  We cannot retrieve everything if they will stole our tokens.


This is one of the Best thing we can do. Transferring it into our own wallet. At least, we can assured that it will not get stolen and can be stored their in a perennial time.

They could easily steal your money just like hitbtc.com. Anyone who keeps their money on coinbase for storage is a fool, sorry but it is true

It already happened to me in the past with some exchange, so I know that in these cases you just lose your money. Of course, if Coinbase would do something like that, the problem would be of a quite different magnitude...

Then the coin market would be a bad day :'( :'( :'(

We cant do anything...and if they keep those between themselves only then whats the use...It wont have any value anymore if its not popular...Or if its usage reduces...Our usage of bitcoin is there profit...So I dont think they will hit their own leg with axe...So nothing to worry about that...Just worry about the banning of bitcoin by the government.

Why would you want to kill the cow that are producing the milk? The bigger exchanges are making a ton of money and they

do not need to steal people's money. The smaller unknown exchanges can do this, if they start to struggle with liquidity or if

some employee exploits some loophole in their code or systems at work. So, it is not impossible and it might have happened

before. (They usually says it is a hack)  ::)

MtGox has a similar situation and they booked police case and mtgox investors are getting paid now in btc now after 5 years of loss

The people behind big exchanges are very public, they can't simply exit scams, because they will be wanted criminals, and it's simply not worth it even with billions in your pockets, because you won't be able to enjoy your life. Of course they could fake a hacking incident, but even that can be exposed, so big businesses are unlikely to exit scam. But there are tons of other reasons why you should never hold your coins on any types of online wallets.

I really like the way you reason and this is very possible. Is coinbase a registered company and if yes I don't think they can vanish with people's fund just like that. There are several options they can take rather than committing themselves that way. They can easily claim hack and says they lost billions of dollars and that will be it. Besides other exchanges have been claiming hacks these days.

That means the exchange scams and there's no way to get our wallet back.
So, for more safety, you can use decentralized exchange such as IDEX or other for safety

I consider your thoughts of instances since we can't predict the future ahead certainly. But to give you some tips, be assured to hoard your valuable assets to a company with real people behind coz they nowhere to hide if ever they committed such crime so It is impossible to happen for majorities point of view.

That's also the reason why we need regulations especially with the market continously growing. If that happens at this point, we may get our btcs back but it'll take a long time for the retrieval process. Imagine the time the mtgox users waited.

And if they likely wanted to scam people, they should have done so before. So technically, it can be done by other big exchanges, but I don't think that they will do it because the risk is not worth it. Binance reported that they are closing in $1 billion already and yet they didn't do it because they can still earn a lot more than doing an exit scam. It could devastated though is such scenario happen, but I bet that every exchanges won't be tempted to do that. Unless those new exchanges aim is to scam the investors out of their money.

I think van it would be the most hilarious scam project in the worldwide history because millions of people would trust them and they will just run I don't think that it is possible. To hide from all the humanity.

That will be tragic and it will lead to the death of crypto because nobody will trust it any longer.

😄

That's impossible, coinbase is well known for their service so why they would runaway from the funds of their customers?

They can be sued by the users since they are popular in the service. Don't think these legit services are like the scammers out there, they are different.

If someone feels unsafe, this is the best choice.