[tome]

They presumably have on hand the full amount of cash and Bitcoins that their participants have given them and don't loan any of them out. That means they have a full reserve.

[will_hughes]

They only need(* depending on TOS guarantee) to keep the full amount of Bitcoins matching your Coinbase wallet. They can take all the cash they've been given, pile it up and set it on fire if they like.

1 BTC at Coinbase is only worth whatever Fiat currency Coinbase is willing to buy it from you for. If that's $1 for all your Bitcoins, tough luck.

They're under no obligation to guarantee a sale price for BTC.

[tome]

> They can take all the cash they've been given, pile it up and set it on fire if they like.

Then how do they pay you when you come to withdraw your cash?

[stef25]

Hopefully and unlike the exchanges using Tether.

[freen]

You aren't buying the bitcoin from Coinbase...

[tome]

No? My understanding was that if you want to sell Bitcons on Coinbase you have to give them custody.