[______-_-______]

https://nitter.net/brian_armstrong/status/152423348004071014...

In other words: We only disclosed these risk factors because we were legally required to. Please ignore our SEC disclosure and half-billion dollar quarterly loss, and instead trust my unregulated statements posted on Twitter. There are no risk factors, your money is safe, the music will never stop.

[oefrha]

I get the point, but please don’t use a block quote when it’s not a quote.

Two problems: 1. People don’t read the source. 2. People can’t detect subtle or not-so-subtle cues.

Case in point: there’s already a sibling discussing “There are no risk factors” as if it’s actually a quote from Brian Armstrong.

[pc86]

Ok here are some actual quotes then:

"We have no risk of bankruptcy" - objectively false statement

"it is possible, however unlikely, that a court would decide to consider customer assets as part of the company in bankruptcy proceedings" - goes against the entire point of his thread, and is also exactly why this disclosure was required

The quote above seems like a completely accurate and fair characterization.

[loceng]

> "We have no risk of bankruptcy"

Isn't that a statement that the SEC should fine them for?

[onionisafruit]

If he just said that, then probably. In context of the thread it’s clear to me that he means there isn’t a risk eminent bankruptcy.

[______-_-______]

You make valid points. I edited my post.

[dj_mc_merlin]

I would argue that's the people's problem. How important is what they have to say anyway if they won't read the source and can't detect sarcasm?

edit: also, even if it's not a direct quote.. c'mon, it is what he's saying. The SEC made a rule that applies _specifically for crypto companies_, saying they have to disclose that crypto assets under their custody could potentially be taken in a bankruptcy.. and this guy goes on to say what he was just forced to disclose is not true. It doesn't get more obvious.

[oefrha]

“It is what he’s saying” is subjective. A quote is not (or shouldn’t be, despite far too many violations in the real world). Just say “Summary: blah blah” if you want to post your subjective summary.

[dj_mc_merlin]

I do not believe a reasonable human would consider this statement:

> Please ignore our SEC disclosure and half-billion dollar quarterly loss, and instead trust my unregulated statements posted on Twitter.

As actually possibly coming from the mouth of the CEO of a company (that is not Elon).

[oefrha]

As I said,

> People can’t detect subtle or not-so-subtle cues.

Or they just skim part of the comment and jump to reply immediately. Same effect.

[300bps]

I never would have thought a CEO would make a statement like this:

>We have no risk of bankruptcy

Reality is that every company has greater than "no risk" of bankruptcy. That's why regulators force them to spell out their risks in filings.

[cinntaile]

You already write why that is mathematically impossible, so the logical conclusion would be that it is not meant to be interpreted like that no? Language is not maths, no risk doesn't mean the risk is zero. It means the risk is unlikely.

[malfist]

It's not a people problem if you're making up quotes and people don't realize it. Use quoting for quotes. Everything else is in your own words, not someone elses, even if you are paraphrasing.

[DaveSchmindel]

Thank you for summing it up this way. It certainly sounds like the original author wants to be taken seriously. In that case they should probably respect the fact that there is literally a word for what they've done. Misquote and its synonyms do not have good connotations, and in their worst form are simply libel...

[tekknik]

If only we took this much care in the news. How many times has both sides misquoted someone? Yet people only seem to care when it’s misquoting the Coinbase CEO.

[maccard]

I don't have skin in the game (not a crypto fan, not in the US and not an investor in coinbase), but I don't think your sarcasm is warranted here (side note for any other readers, that's _not_ what his linked thread says).

Regulatory capture is _real_, and dispraportionately favours incumbents. As regulations are tightened on crypto in general, firms that are not involved in the creation of said regulations are going to find themselves on the wrong side of the law. Furthermore, if _any_ organization has a reputation of taking sides, it's the SEC.

[duxup]

I don't think regulatory capture is the issue here. We're talking about a disclosure of risks ... that seems reasonable to me.

Dude says there is no risk of bankruptcy and is predicting court case outcomes... and it is clearly in his financial interest to make the arguments he is making.

The system is rigged and other truthy arguments are all but standard operating procedure for whatever crytpo idea someone comes up with. Those arguments doesn't make mean we shouldn't be skeptical.

[maccard]

The problem is that the disclosure of risks is written in such a way that captures the existing situatio nand makes it hard for a valid crypto firm to not post... exactly this.

> The system is rigged and other truthy arguments are all but standard operating procedure for whatever crytpo idea someone comes up with.

But remember that applies to both sides of the coin - the SEC disclosure of risks claiming there's a huge risk of monetary loss _is_ true, but it's also unavoidable as (to my understanding) there isn't currently a way for coinbase to be FDIC insured.

> Those arguments doesn't make mean we shouldn't be skeptical.

You should be incredibly skeptical, but you should be informed of what you're skeptical about.

[duxup]

>The problem is that the disclosure of risks is written in such a way that captures the existing situatio nand makes it hard for a valid crypto firm to not post... exactly this.

Because ... they aren't FDIC insured nor do they provide any reliable protections for their user's money?

It's hard not to post it, because it is true.

[maccard]

The problem is that there is no alternative statement for them to make. The disclosure of risks require them to be FDIC insured or state there is a risk of loss in bankruptcy, and given they don't have the option of FDIC insurance, they have to declare the risk. The problem is that coinbase don't have the choice to be insured, yet they get labelled as though they're yolo'ing it _whether they are or not_ because the FDIC don't insure the asset class they're trading.

[tekknik]

Coinbase is insured. Crypto balances are insured against theft, and fiat balances are deposited into accounts that are then FDIC (or whatever is equivalent for other countries) insured.

https://www.coinbase.com/legal/insurance

[gonzo41]

The thing with crypto is its just reinventing money and all the same crap over. Right now it's like banking in the 1820's with no parachute.

Crypto isn't living up to it's PR an I don't really understand why people can't see its flaws.

[galangalalgol]

It is probably because we don't understand finance, economics or their history. There is an obligatory xkcd somewhere but I'm too lazy to find it. Software people occasionally find great solutions for existing problems pre-tech X. As experts in tech X they tend to trivialize existing domain knowledge because obviously X has disrupted all that.

Edit: I got less lazy. https://m.xkcd.com/793/

[maccard]

I never claimed otherwise, simply that a massive disclosure of risk is going to favour the instituitions that the disclosure of risk was designed for.

[tekknik]

> Crypto isn't living up to it's PR an I don't really understand why people can't see its flaws.

Because people are trying to get rich off of it. I believe a majority know it’s a horrible “currency”, they just want money.

[junon]

This is not a direct quote, please don't use blockquotes. It's disingenuous.

[p49k]

It’s a direct quote from the 2nd tweet in his thread.

[junon]

Er, no. It's not. And the GP was edited already not to use blockquotes, so my comment is now moot.

[tekknik]

Are you this quick to jump on media / news orgs that misquote others? Just curious.

[junon]

Yes.

[tekknik]

Good.

[raverbashing]

> 3. We believe our Prime and Custody customers have strong legal protections in their terms of service that protects their assets, even in a black swan event like this

> 4. For our retail customers, we’re taking further steps to update our user terms such that we offer the same protections to those customers in a black swan event. We should have had these in place previously, so let me apologize for that.

> 5. ...and it is possible, however unlikely, that a court would decide to consider customer assets as part of the company in bankruptcy proceeding

The term people might want to google is "bail-in". And it is likely that Coinbase has less protections related to that than a conventional bank.

[duxup]

Somehow that’s even less comforting….

But I suppose that’s the rabbit hole crypto fans go down.

[gennarro]

“There are no risk factors” doesn’t inspire much confidence in me, even if this specific situation isn’t of much concern to Coinbase management.