Coinbase is a US publicly traded company regulated by the SEC. Their business model is garbage but they have orders of magnitude more data that shows that as a company, they’re legit.
In December 1996, Emanuel Pinez, the CEO of Centennial Technologies, and his management recorded that the company made $2 million in revenue from PC memory cards. However, the company was really shipping fruit baskets to customers. The employees then created fake documents as evidence that they were recording sales.
Coinbase goes as far as publishing the exact identification numbers of all the short term US treasuries they hold that back the USDC they emitted. They say they're held in custody at BNY Mellon (IIRC). It would be quite the lie if that wasn't true and I'm pretty sure many people are now carefully looking into these affirmation / proof of reserves / etc.
Coinbase also always had exorbitant fees compared to other exchanges (but who's looking "smart" now, those who paid the huge fees at Coinbase or those who were paying 0.000001% / operation at FTX and are now fucked?), which at least make it sound like making money on actual fees was their business model.
Now: Coinbase is leaking money by having revenues which fell and running costs through the roof.
But, in the short term, if FTX is gone and if Binance goes, Coinbase becomes number one. They're already number two and it's very likely that Coinbase's volume is real (contrarily to Binance).
Coinbase is a HN unicorn, US incorporated. The people behind it are known.
They may be behind a huge scam but somehow I don't think so.
Also I do really wonder: now that rates have gone up, they've got $53 bn actual USD bringing it a significant amount of money. Where's that money going? For a start they're not giving the yeld to people storing USDC in their own private wallet in a "your key / your coins" style. What about the USDC held at Coinbase for customers? Do they give yeld on that?
$53 bn or so is a lot of money with 4 to 5% yeld or something...
Doesn't the other poster's claim that the "Entire financial space" is corrupt and that "For every FTX or Binance there's an Enron or Deutch Bank ten times the size and just as villainous" undermine the claim that BNY Mellon is trustworthy?
I agree that USAA is a rare exception, but do you really trust BNY Mellon if the "Entire financial space" is corrupt, or is that just whataboutism that ignores the outrageously unprecedented and shill-droid-automated degree of unregulated untraceable corruption in the crypto space?
If you believe Coinbase is as rare and trustworthy an exception as USAA, then I've got some Trump NFT's to sell you!
Disagree. Coinbase has been around forever and was born out of the collapse of MtGox and people wanting some adults to run an exchange. I would not be surprised at all if Binance is a house of cards, I would be very surprised if Coinbase was.
Madoff Securities was founded in the 60s and didn't collapse until 2008.
And you may say that Madoff Securities didn't start out as a Ponzi scheme, federal investigators believe that it took until the 70s for it to start. Madoff claims the scams didn't start until the 90s.
So, "being around forever" isn't evidence of lack of fraud.
What gives confidence in Coinbase is that it’s an American company with no offshore subsidiary to perform these kinds of shady transfer shenanigans that have led to the demise of FTX and possibly Binance. No financial company is bulletproof but perhaps it can be said Coinbase only has as much risk as any American financial company. To be fair if this risk is less than your typical crypto darling it’s definitely non-zero.
Even moreso than Coinbase being an American company, it's a PUBLIC american company that is scrutinized by the rules of american exchanges. This makes it more transparent financially than any other exchange that you can hold your crypto at.
Madoff Securities was an American company whose shady shenanigans were all contained within the US.
So the fact that Coinbase is entirely US based is also not a guarantee that it's not doing shady things.
And the implication DonHopkins was making is that every major actor in the crypto space is run by scam artists trying to defraud people of their money. There are no good actors.
It's not about the level of risk with regards to the structure of the company. It's about the people running it. And no manner of corporate structure is going to prevent people from simply lying. Which is what every fraud has to do at some point. By their very nature.
DonHopkins is saying since we can't trust the people running these companies, we can't trust these companies.
And the fact that they've been around for a while or are based solely in the US mean nothing when one of the largest financial scams ticked both of those boxes.
Oops, correction.
FTX, Coinbase and Kraken definitely aren't "a wretched hive of scum and villainy".
Dont worry, I have it right this time ...
Coinbase and Kraken definitely aren't "a wretched hive of scum and villainy".