
Coinbase Insolvent? - cobookman
Everyone who wired money out of Coinbase from December 12-15th has yet to get their funds.<p>Is this due to Coinbase having a lack of usd on hand?
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fiiv
I am not sure if they are solvent or not, but I genuinely believe that they
bit off more than they could chew with Bitcoin Cash. The volume of
transactions surprised them, I think, and they've been struggling to keep up
ever since.

Additionally, of course, by adding BCH all of a sudden they may have triggered
a bank run on themselves since so many people potentially wanted to move their
BCH out or cash out. Not to mention that by nature of the fork, value was
created out of the existing BTC holdings so there would not necessarily be
fiat funds to back up those amounts, only the BTC amounts.

I think the combination of these factors have led to delays and payout limbo.

Note: Not blaming BCH for their problems here - perhaps more Coinbase
themselves in the way they handled the new asset.

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VincentTide
What you said does not make sense for an exchange. For every seller, there
needs to be a buyer who first deposits USD.

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fiiv
Ya but with BCH, being a hard fork where the asset was created from everything
to a certain block of the BTC chain, it effectively created new coin balances
out of nothing. Now imagine when people start trying to cash those out to
fiat.

In this situation, there was no fiat laid out to get it but it is indeed worth
fiat in the case of a withdrawal.

~~~
coralreef
If people want to cash out their BCH, they need to sell it on the exchange for
USD. The USD needs to already exist in the exchange for someone to buy it. The
fiat was laid out by the buyer.

So there's no fundamental liquidity issue, if everyone wanted to cash out
their BCH to fiat it should not be an issue.

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flignats
Normally, yes. But if you sell it through coinbase and not gdax, cb let's you
sell it instantly and acts as a buyer.

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coralreef
How do you know they're acting as a buyer and not just creating a sell order
on GDAX?

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flignats
Because they just bought it from you at that guaranteed price. They could go
and sell it on the market for more/less, but the price you sold it to CB for
remains the same.

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coralreef
That price changes dynamically at some interval, and is discounted against the
trading market value, correct?

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flignats
They do update that price frequently (minutes, maybe seconds) and there is a
premium added to the price. I assume they add this premium so they can then go
liquidate it for profit on the exchange as needed.

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coralreef
That doesn't sound to you like they're just selling it on gdax?

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flignats
They can do whatever they want with it after they have sold it to me for a
fixed price.

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coralreef
Heh, I'm not sure why you think its a fixed price. They're probably showing
you the lowest sell order on the order book.

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flignats
Have you ever bought/sold on CB? It is exactly that, a fixed price. It's the
convenience you pay for to use CB. That price updates frequently, but whatever
price you execute at is the price you pay/sell for.

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vinrob92
I recently withdrew some money out of Coinbase and it took about 8 working
days.

On another note -- I just posted this on HN but I just tried to send 2x €150,-
to another Bitcoin address and Coinbase only sent €25,- (despite having enough
funds on my account). I was also charged 2x €10,- in the process. I contacted
Coinbase support to hopefully get the refund of my transaction fees since it
is obviously an error.

~~~
dukeflukem
Maybe it was sucked up in miners fees?

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brianjking
I purchased BTC, ETH, and LTC on coinbase after those dates and received my
funds in the respective currencies. Are you referring to cash out to USD into
a bank?

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rthomas6
Does it matter? They're FDIC insured.

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brianjking
Only for those in the USA.

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pkinsky
I moved money out of CB on the 22nd and it's in my bank account now.

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arisAlexis
who is everyone? sources?

