Coinbase Holds a Whopping 966,230 Bitcoin ($7B) in Cold Wallet - page 4.

Juggy777

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Quote from: alyssa85 on December 02, 2019, 06:48:16 AM

https://beincrypto.com/coinbase-holds-a-whopping-966230-bitcoin-7b-in-cold-wallet/

Quote

According to recent reports, Coinbase has a whopping 966,230 Bitcoin in its cold wallet. The exchange is increasingly becoming like a ‘bank’ which stores a growing number of deposited cryptocurrency assets.

Other exchanges lag behind Coinbase, but still have sizeable cold wallets from its depositors and own funds. BitMEX has around 265,140 BTC ($1.94B) while Bitstamp comes in third with 229,490 BTC ($1.67B). Other top exchanges by assets under its custody are Bitfinex (146,120 BTC), Kraken (136,780 BTC), Bittrex (131,340 BTC), and Coincheck (35,090 BTC)

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I'm not sure they should be advertising this. I just hope they have really really FIERCE security and are guarding their stash like hawks.

That’s a huge amount even if we’re talking about a major crypto exchange here, it seems that people there just deposit funds and forget about it. @alyssa85 they’re advertising it because they wish to tell people that they’re biggest exchange in the crypto industry and users funds will be safe with them.

guigui371

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Interesting to note that the article list the "major" exchanges but forgets Binance.

Quote

Other exchanges lag behind Coinbase, but still have sizeable cold wallets from its depositors and own funds. BitMEX has around 265,140 BTC ($1.94B) while Bitstamp comes in third with 229,490 BTC ($1.67B). Other top exchanges by assets under its custody are Bitfinex (146,120 BTC), Kraken (136,780 BTC), Bittrex (131,340 BTC), and Coincheck (35,090 BTC).

Binance has at least 155,000 BTC in cold storage :
https://bitinfocharts.com/bitcoin/address/3E35SFZkfLMGo4qX5aVs1bBDSnAuGgBH33
https://bitinfocharts.com/bitcoin/address/34xp4vRoCGJym3xR7yCVPFHoCNxv4Twseo

exstasie

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Quote from: gentlemand on December 02, 2019, 04:55:48 PM

Quote from: exstasie on December 02, 2019, 04:51:37 PM

It's worth noting, while Massachusetts Bay denied Bitpay's claim and took the matter to court, the two ended up settling for an undisclosed amount.

Interesting. I thought they'd gotten a flat refusal. I can't believe any employee would be stupid enough to do what they did and I can't believe their system was open to that type of entry from an office drone computer but I know nothing about these things.

Same. All these years I'd been operating under the assumption that the court tossed out the case, simply because it seemed so stupid and Massachusetts Bay was putting up a fight. It was only just now that I realized the whole matter was swept under the rug and the insurance company paid out something under the policy.

It'll be interesting when we finally see a case like this go to trial and get some real precedent.

gentlemand

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Quote from: exstasie on December 02, 2019, 04:51:37 PM

It's worth noting, while Massachusetts Bay denied Bitpay's claim and took the matter to court, the two ended up settling for an undisclosed amount.

Interesting. I thought they'd gotten a flat refusal. I can't believe any employee would be stupid enough to do what they did and I can't believe their system was open to that type of entry from an office drone computer but I know nothing about these things.

exstasie

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Quote from: gentlemand on December 02, 2019, 01:58:15 PM

Quote from: exstasie on December 02, 2019, 01:36:22 PM

As we found out with Bitpay, it all depends on the circumstances. Their insurance claim was denied after they sustained a 5,000 BTC loss from a spearphishing attack.

It sounds like Coinbase's policy would cover a typical hot wallet hack scenario.

What is a typical hot wallet hack?

Most of the reported ones were probably inside jobs.

Coinbase's insurance policy apparently covers inside jobs too. Tongue

The devil is in the details. We obviously aren't privy to a line-by-line breakdown of their insurance policy. Hopefully we'll never find out.

The recent breaches at Binance or Upbit are two examples. It could be a physical penetration of their servers or something else but the point is fraudulent, unauthorized transfers where adequate duty of care was exercised.

It's worth noting, while Massachusetts Bay denied Bitpay's claim and took the matter to court, the two ended up settling for an undisclosed amount.

Quote

Filed yesterday, a court order dismissed the suit between BitPay and Massachusetts Bay Insurance Company, a subsidiary of Hanover Insurance, without prejudice. According to the court order signed by US District Judge Steve Jones, the two sides “have reached a settlement in principal”.

gentlemand

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Quote from: exstasie on December 02, 2019, 01:36:22 PM

As we found out with Bitpay, it all depends on the circumstances. Their insurance claim was denied after they sustained a 5,000 BTC loss from a spearphishing attack.

It sounds like Coinbase's policy would cover a typical hot wallet hack scenario.

What is a typical hot wallet hack?

Most of the reported ones were probably inside jobs. It looks like Bitpay underwent what's likely to be the most common technique and blithely assumed they'd be covered. I wouldn't have paid them out either though.

I wonder whether Coinbase sat down with the insurer and spelled out or had it spelled what scenarios would be covered or not.

exstasie

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Quote from: gentlemand on December 02, 2019, 01:06:43 PM

Nah. There's no legal requirement for crypto insurance. The fiat will be covered by conventional banking policies.

Note the wording here - https://support.coinbase.com/customer/portal/articles/1662379-how-is-coinbase-insured- 'all digital currency that Coinbase holds online is insured' so that means hot wallets only which is 2% of all funds. For all the rest you're in their hands entirely.

And I wonder whether their policy would actually pay out for any of that 2%.

As we found out with Bitpay, it all depends on the circumstances. Their insurance claim was denied after they sustained a 5,000 BTC loss from a spearphishing attack.

It sounds like Coinbase's policy would cover a typical hot wallet hack scenario.

gentlemand

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Quote from: 1Referee on December 02, 2019, 01:09:55 PM

With time, more legacy financial institutions will offer custody services, which should translate into a Coinbase exodus because it's more convenient for people to entrust the institutions they are familiar with than a native crypto company. More competition is welcome.

I wonder. It's definitely healthier to be spread around but there may be an element of 'you go first' that stifles it.

I would be more inclined to go with an operation that had been doing it for years with a flawless track record than some old stager that had recruited a bunch of cryptobro assholes and told them to get on with it.

If that BTC is gone it's staying gone. I'd want devoted monks tending to it, not some clueless newly created subsidiary with little emotional investment.

1Referee

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It's probably closer to 2 million Bitcoin if you add that they hold the Xapo 'bunker' funds and GBTC's funds.

Quote from: alyssa85 on December 02, 2019, 06:48:16 AM

Other exchanges lag behind Coinbase, but still have sizeable cold wallets from its depositors and own funds. BitMEX has around 265,140 BTC ($1.94B) while Bitstamp comes in third with 229,490 BTC ($1.67B). Other top exchanges by assets under its custody are Bitfinex (146,120 BTC), Kraken (136,780 BTC), Bittrex (131,340 BTC), and Coincheck (35,090 BTC)

Don't forget about Huobi holding ~300,000BTC and Binance with ~400,000BTC. Still no match for Coinbase, but they deserve to be in that list for sure.

With time, more legacy financial institutions will offer custody services, which should translate into a Coinbase exodus because it's more convenient for people to entrust the institutions they are familiar with than a native crypto company. More competition is welcome.

gentlemand

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Quote from: Pearls Before Swine on December 02, 2019, 01:02:25 PM

Hopefully coinbase has insurance on the coins they're holding. I'm *almost* sure they're required to by the U.S. gov't.

Nah. There's no legal requirement for crypto insurance. The fiat will be covered by conventional banking policies.

Note the wording here - https://support.coinbase.com/customer/portal/articles/1662379-how-is-coinbase-insured- 'all digital currency that Coinbase holds online is insured' so that means hot wallets only which is 2% of all funds. For all the rest you're in their hands entirely.

And I wonder whether their policy would actually pay out for any of that 2%.

Pearls Before Swine

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Quote from: alyssa85 on December 02, 2019, 06:48:16 AM

I just hope they have really really FIERCE security and are guarding their stash like hawks.

Seriously. Didn't Mt. Gox get most of their bitcoin 'stolen' from cold wallets? I don't remember if it was Karpeles who stole it or someone else but I do remember that he'd had multiple cold wallets locked up in the offices and that they'd gone missing, which just shows you what can happen.

But coinbase is not Mt. Gox. Gox was almost a one man operation and Karpeles shouldn't have been entrusted with a single satoshi, whereas coinbase is a big regulated exchange and I doubt they're keeping that much bitcoin in a cold wallet where an employee or someone else can steal it. At least I hope they're not doing that. But I also wonder where a safe enough place would actually be to store that much. Anywhere you can think of can be robbed as long as someone knows where the coins are.

Using multiple locations would be best in my opinion. Hopefully coinbase has insurance on the coins they're holding. I'm *almost* sure they're required to by the U.S. gov't.

Theb

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I don't think that they are advertising it but they are just showing how liquid their company. If they are holding nearly a million Bitcoin then this just shows how capable they are on paying their customers back on what they will withdraw or what they will buy. Even if they don't advertise such information they are still in the cross hair of hackers trying to infiltrate there system, it's how crypto exchanges/services work and they are aware of the risk involve running a digital and online business. That info might gain a lot of attention from hackers but I think they are well secured for any kind of attacks to steal it, this isn't even an official statement from Coinbase and this is just a report coming from another source.

BitHodler

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Quote from: aardvark15 on December 02, 2019, 11:55:57 AM

This does support the fact that it’s an exchange that can pay out withdrawals. I have used Coinbase and they seem to be very good.

That doesn't necessarily mean they can pay out withdrawals because only a tiny percentage of these coins are sitting in hot wallets, which means that whenever people try to withdraw coins together, they will say no.

It's similar to the money you have in your bank account. You will not be able to withdraw everything (unless you have a low balance) because there isn't enough paper money in the reserve of an ATM, and you are subject to a daily limit.

gentlemand

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Good article about their practices - https://www.wired.com/story/coinbase-physical-vault-to-secure-a-virtual-currency/

It's a bonkers figure and I can't imagine it's going to shrink any time soon. Responsibility for billions of dollars' worth of something irreplaceable and probably uninsurable would have me waking up screaming.

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Quote from: alyssa85 on December 02, 2019, 06:48:16 AM

https://beincrypto.com/coinbase-holds-a-whopping-966230-bitcoin-7b-in-cold-wallet/

Quote

According to recent reports, Coinbase has a whopping 966,230 Bitcoin in its cold wallet. The exchange is increasingly becoming like a ‘bank’ which stores a growing number of deposited cryptocurrency assets.

Other exchanges lag behind Coinbase, but still have sizeable cold wallets from its depositors and own funds. BitMEX has around 265,140 BTC ($1.94B) while Bitstamp comes in third with 229,490 BTC ($1.67B). Other top exchanges by assets under its custody are Bitfinex (146,120 BTC), Kraken (136,780 BTC), Bittrex (131,340 BTC), and Coincheck (35,090 BTC)

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I'm not sure they should be advertising this. I just hope they have really really FIERCE security and are guarding their stash like hawks.

wow, this is a very large number and if their cold wallets have problems then things will get really bad. I think if we have so much money, we should not hold too much at an exchange. We should split it for many large and reputable exchanges like Kraken, Huobi, Binance to minimize risks. or better yet we should send more in our own cold wallet. we only need to spend more than $ 100 and we have a wallet that no one can access, which is how I encourage people to hold onto their bitcoins. because if Coinbase is a greedy person, it will cheat and destroy the financial system of the crypto market by selling 966,230 bitcoins.

aardvark15

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This does support the fact that it’s an exchange that can pay out withdrawals. I have used Coinbase and they seem to be very good.

panganib999

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Quote from: blckhawk on December 02, 2019, 10:14:01 AM

I'm also quite skeptical about such kind of publicity. But I guess it attracts more investors and traders into their platform. It gives potential clients assurance and comfort knowing the reputation of Coinbase is backed up by the whopping amount of their holdings. I think they know what they're doing and whether or not they have that amount, it's an advertising strategy and positioning their dominance in the market, now that another halving would occur and an increase number of new investors are expected to eye on cryptocurrencies.

I really doubt its worth revealing that kind of information for a bit of advertisement and publicity. that is unless they are completely sure about the security of their wallets. But well, we all know that no system is perfect, no code can't be decoded, no house can't be entered. Besides, their already an old timer, ngl. I see no need to further advertise their abilities to the public when the public already knows that they are quite reputable and a lot of users have trust in their company.

jossiel

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That's hefty amount of money but sure they have a strong security. They know the responsibility that they should have for covering their funds together with the funds of their customers.

Quote from: blckhawk on December 02, 2019, 10:14:01 AM

I'm also quite skeptical about such kind of publicity.

I'm thinking the same thing about this matter of information. What's the reason for broadcasting that? I guess to attract and gain trust.

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Quote from: Lucius on December 02, 2019, 10:07:58 AM

Coinbase operates from 2012, and it is, therefore, no surprise that people trust them. They have very rigorous procedures for generating private keys, which include special rooms, computers that are destroyed after use, and backup in multiple locations around the world. According to them, 98% of the assets are located in cold wallets, and fiat they hold for users is also fully insured by banks with whom they work.

Although security is at an enviable level, it is strange that so much BTC is not actually owned by its owners (they not own private keys), and they can only pray that nothing bad happens. I think most are still not ready to be their own bank, but I think that will change over time - we do not need another Mt.Gox.

Destroying computers after use seem too much of a security measure, its a waste of money but probably because they know anyone can be computer forensic that can recover anything as long as it can possibly salvage. People actually use them for storage despite all the efforts of users reminding them that exchanges aren't safe. The number of exchange hacked and scam are in the news almost every year but yep no private key still something they don't worry.

blckhawk

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I'm also quite skeptical about such kind of publicity. But I guess it attracts more investors and traders into their platform. It gives potential clients assurance and comfort knowing the reputation of Coinbase is backed up by the whopping amount of their holdings. I think they know what they're doing and whether or not they have that amount, it's an advertising strategy and positioning their dominance in the market, now that another halving would occur and an increase number of new investors are expected to eye on cryptocurrencies.

Topic: Coinbase Holds a Whopping 966,230 Bitcoin ($7B) in Cold Wallet - page 4. (Read 797 times)