Take your Bitcoin off Coinbase

[Botnake]

Great effort on the warning, OP, but there’s no need to panic since the CEO of Coinbase has already denied that rumor.

Coinbase founder and CEO Brian Armstrong has denied speculations that the company has sold paper Bitcoin to BlackRock without maintaining a 1:1 backing.

The allegations have caused debate in the crypto community, with some accusing Coinbase of lacking transparency in its Bitcoin reserves.

[Lucius]

BlackRock finally learned "not your keys, not your bitcoin." They wanna store on chain Bitcoin by themselves instead of letting CB store it for them.
~snip~

BR could have started from the beginning with self-custody, but they didn't do it - what do you think for what reason? If they were capable of doing that, they wouldn't have entrusted the job to someone else, and no matter how strange it sounds, that someone is still a professional in that business. CB has very strict criteria when generating wallets, and also regarding the storage of private keys - there was an article a few years ago that described the entire procedure in detail.

[DaveF]

Great effort on the warning, OP, but there’s no need to panic since the CEO of Coinbase has already denied that rumor.

Coinbase founder and CEO Brian Armstrong has denied speculations that the company has sold paper Bitcoin to BlackRock without maintaining a 1:1 backing.

The allegations have caused debate in the crypto community, with some accusing Coinbase of lacking transparency in its Bitcoin reserves.

The rumor was probably started by people working at a different exchange that is about to go under and they figured they could cause other people some doubt.

The funny part is that things like this are the reason that a lot of people want to go with BlackRock & Coinbase.
They have massive amounts of regulation to deal with and a ton of government people crawling though their books on a regular basis.

Although they might be able to get away with some things, the chances of them not having what they say they have vs other off shore unregulated exchanges is a lot less.

-Dave

[icalical]

I suppose OP is right that BlackRock wants more transparency, ensuring that when Bitcoin is purchased with its ETF, the ownership is directly on-chain. Given the reputation of BlackRock, it is expected from them to set higher standards in how Coinbase handles custody. That may be a signal that the practice by Coinbase is getting more scrutiny, especially with their plan to launch "Coinbase WBTC," which raised even more concerns  .

I totally agree that we should avoid leaving funds on centralized exchanges like Coinbase. All this push for faster on-chain settlement does seem to come together with the greater crypto philosophy of self-custody. If BlackRock is concerned, that could indicate much larger issues later on for Coinbase. In all probability, yes, moving assets off exchanges into personal wallets where we got full custody, especially when one is not trading actively, it is the only best way.

[goldkingcoiner]

It's always only a rumor until it becomes true.

Either way, I make it a habit to hold all my Bitcoin in my own private wallet so that no third party can "de-decentralize" my money against my will.

I mean, when your Bitcoin is laying on some third party wallet, like that of a crypto exchange, is it not technically just fiat under a different name?

[DaveF]

It's always only a rumor until it becomes true.

Either way, I make it a habit to hold all my Bitcoin in my own private wallet so that no third party can "de-decentralize" my money against my will.

I mean, when your Bitcoin is laying on some third party wallet, like that of a crypto exchange, is it not technically just fiat under a different name?

The thing that a lot of people are missing is the size of BlackRock and the way they are regulated and what they have to go though.
IF this was true AND they did not tell their investors within a short period of time that they thought there was an issue and something happened the lawsuits would be epic.
As in they would be studied in law schools for years to come.

We are not talking about some unregulated off shore company like FTX.

-Dave

[ImThour]

How about take your Bitcoin off any exchange? Not alone Coinbase.

It's always said, not your keys, not your coins. So I am sure those who are holding their Crypto on an exchange needs to understand this that until and unless you withdraw them in your hardware wallet or even wallets like Metamask, the money isn't yours. It's owned by an exchange and they can lock you out anytime for any reason.

[NotATether]

For some reason, I'm not that worried. I would be worried if this was concerning normal users but not in this case. With the Blackrock, and SEC involved into all of this. I can't imagine them even trying to pull such a move.

Regardless though, one should not store his funds for a long period of time in any exchange.

It sounds like a non-event to me. Big enterprises require many kinds of special stuff from their providers all the time, so it doesn't really make sense to me that someone would pull all their BTC from Coinbase simply because someone thinks that they are depositing paper money.

That being said, I do not support Coinbase at all.

[fuguebtc]

Not just Coinbase but CEX entirely. It is not a safe place to store bitcoin because any mistake will lead to lose. The drama happening in Coinbase lately is already a signal that people should have used to protect their asset by taking them to their personal wallets but it seems some people are still ignorant of the dangers of storing assets in CEX. It is popular thing here that wallets that one have the private keys are the only safe place to store assets so people should act accordingly.

The source of this news was not given, it just came from a random tweet that has gotten over a million views and many reposts. But there is some level of truth in some rumours. I know that Coinbase will refute this claim and tell investors that their funds are safe. But these CEX can do anything to make a profit so I don't doubt the claim that Coinbase might be deceiving BlackRock. People forget easily and want to always learn the hard way just like in the FTX case. The money you keep in centralised exchanges is not yours, you can lose it at any time.     

As many as 10 out of 11 bitcoin ETFs use Coinbase as their bitcoin custodian , and BlackRock is not a small or easily bullied institution in the financial markets. If CB really cheated with BR and other funds, do you think they will let CB off easy?
As you said , it's all just a rumor from a random unverified tweet, why are so many of us exaggerating the issue so unnecessarily? Bitcoin ETF is an agreement between investment funds and Coinbase and is approved by the SEC .  I don't think CB will do anything stupid, they can cheat or take bitcoins from regular users but with bitcoin ETFs it's a completely different case .

I think this is FUDs and we should stop spreading it .

[Pmalek]

I think everyone is aware of the risks of storing assets on centralized exchanges after their collapses.

Those who keep themselves informed about such affairs know about it. People on this forum and other communities who understand the benefits of self-custody and have found the right sources of information to warn them of custodial exchanges are also aware of it.

I was surprised to read the information in this article. If the data from June of this year is true, around 11.5% of bitcoin's overall supply is kept at addresses held in exchanges. I expected this number to be higher and closer to the 25-30%. It's worth pointing out that the data can only consider wallet addresses they know belong to exchanges. Surely, there are those they aren't aware of, which would increase that given percentage.

[C10H15N]

I loan money to the broke ass US Government by purchasing Treasury Bills that are maintained in the custody of my broke ass government regulated brokerage accounts.
I own shares of Blackrock that are maintained in the custody of my broke ass government regulated brokerage accounts.
I own shares of Coinbase that are maintained in the custody of my broke ass government regulated brokerage accounts.
I own shares of the available crypto ETFs and MSTR that are maintained in the custody of my broke ass government regulated brokerage accounts.
I own free and clear my home that the broke ass government taxes me on every year.
I own precious metals, crypto, and other tangible assets that I maintain custody of since I don't have enough faith in my financially irresponsible broke ass government to trust them with all of my assets.

Don't keep all of your eggs in one basket.  

[ChiBitCTy]

If anyone argues against this, they are a damned fool.  Coinbase has been one corrupt shitty exchange every since I "got in to" bitcoin.  They were sorta the really only player in town for quite some time.  I used them back in the day when their exchange would freeze seemingly every single time there was any sort of sell off, didn't even have to be all that big.  They have locked up accounts and stolen bitcoin from friends of mine and I've heard countless stories of people get fucked by them.  SO yes, f Conbase.

[franky1]

Great effort on the warning, OP, but there’s no need to panic since the CEO of Coinbase has already denied that rumor.

Coinbase founder and CEO Brian Armstrong has denied speculations that the company has sold paper Bitcoin to BlackRock without maintaining a 1:1 backing.

The allegations have caused debate in the crypto community, with some accusing Coinbase of lacking transparency in its Bitcoin reserves.

The rumor was probably started by people working at a different exchange that is about to go under and they figured they could cause other people some doubt.

its been long known that coinbase didnt want to reveal its security of its custody trust/cold wallets specific to the custody service. and even in blackrocks ETF applications reveals coinbase dont reveal critical details to blackrock. however now that blackrock has a substantial hoard, they want more transparency and accountability. because they noticed when they done coinbase OTC deal to buy coin, and then move coin to custody to then treat as locked coins to then do their ETF stuff, the coinbase transactions on the blockchain didnt completely match up to movements from the trade to the custody services.

this meant they only had the coinbase database/platform account balance to rely on.
its the reliance of the coinbase platform database and not having reliance of blockchain utxo proofs that raised the alarm of "paper btc"

..
with $23b (363k btc) held in coinbase just for blackrock alone, im pretty sure new relations, negotiations of proof policies have been handled before this news got public attention

[Dr.Bitcoin_Strange]

Ever since I realized the risk of storing my crypto asset on centralized exchange, I stopped saving crypto on exchange and I always discourage my friends from doing so.

[Mahanton]

For some reason, I'm not that worried. I would be worried if this was concerning normal users but not in this case. With the Blackrock, and SEC involved into all of this. I can't imagine them even trying to pull such a move.

Regardless though, one should not store his funds for a long period of time in any exchange.

This has always been the main golden rule here in crypto space. It might sounds basic and repetitive but this is something that will really be saving up your ass on losing up your coins.
"Not your keys, not your coins" this is really that a line that often heard about and this is where newbies should really be thinking off when it comes into this aspect.

As for those events talking or involving those institutions then just like you then im not really that having any concerns nor really that being mindful on whats happening around.
We do know that there are really that tons of drams thats happening into that area on which it would really be that obviously shows that they are really just doing those casual stuffs around.

As for security of coins then better always choose on storing up on non-custodial ones on which this is really the most basic thing that you do learn on crypto space.

[dificanovi]

Regardless though, one should not store his funds for a long period of time in any exchange.

All exchanges also do not guarantee that the coins we have will be safe for a long time, some bad things can happen like some exchanges that have disappeared from the cryptocurrency world. Since the beginning of my acquaintance with Bitcoin, I have never left my Bitcoin or Altcoin on a cryptocurrency exchange because there was once someone who put his coins on a crypto exchange for a long time, but after that he tried to check his coins and it turned out that his coins were no longer on the crypto exchange.

[Perfectbaby]

My advice doesn't end with Coinbase only though, stop leaving your coins on any centralised exchanges in general.

It's completely wrong leave funds for long time on exchange if not using them to trade, for me I would prefer when trading then moved fund back to exchange to execute that but if not in used there is needs to pull them off from centralized exchange. I goes by the popular phrase 'not your key, not your coin' and there is every chance of losing ones asset.

[AmoreJaz]

Regardless though, one should not store his funds for a long period of time in any exchange.

All exchanges also do not guarantee that the coins we have will be safe for a long time, some bad things can happen like some exchanges that have disappeared from the cryptocurrency world. Since the beginning of my acquaintance with Bitcoin, I have never left my Bitcoin or Altcoin on a cryptocurrency exchange because there was once someone who put his coins on a crypto exchange for a long time, but after that he tried to check his coins and it turned out that his coins were no longer on the crypto exchange.

Do remember most coins are getting abandoned and delisted from crypto-exchanges, so it should never be an option to store your coins in them for long period of time.

[uchegod-21]

The claims of Coinbase selling paper BTC to BlackRock was completely made up by influencers looking for clout. BlackRock didn’t want their investors panicking over this FUD so they amended their agreement with Coinbase so that on-chain settlement happens more frequently.

I perceive it is just a FUD. Be it paper BTC or not, it will only be confirmed BTC in the chain. Whether they hold and share it in any form, what we should look out is the on-chain settlement.

Keeping your Bitcoin off of custodial exchanges should be standard practice by now for most people so there is nothing to really be concerned about if you were being responsible and holding your own private keys.

When BTC is in Coinbase or with BlackRock, is it still called BTC or only considered BTC when it hits the BTC network.

[X-ray]

The claims of Coinbase selling paper BTC to BlackRock was completely made up by influencers looking for clout. BlackRock didn’t want their investors panicking over this FUD so they amended their agreement with Coinbase so that on-chain settlement happens more frequently.

still, if people are concerned about this, coinbase can just prove it that this just nothing but clout and the BTC per agreement exists on-chain.

doesn't hurt to prove credibility and reliability of a company knowing such concerns arise.

this is also why I just avoid using wrapped BTC in altcoin chain, the centralized custodian of the underlying BTC just putting some additional layer of risk and is subject to depeg.