The Coinbase exchange clearly indicated they would not support Bitcoin Cash, and all customers were advised to move their funds off the platform if they wanted their BCH tokens. However, some people still feel that tokens were issued on the exchange, even though they were not credited to user balances. That money has to go somewhere, after all.
UPDATE: Coinbase has confirmed they will support Bitcoin Cash withdrawals for customers after all.
Coinbase and Bitcoin Cash Create Confusion
Coinbase has no love lost for Bitcoin Cash. Individual exchanges make their own rules when it comes to supporting alternative blockchains or not. In this particular case, the company made its stance known well in advance: there never was, is, or will be support for Bitcoin Cash or the BCH token on this trading platform. GDAX will not be supporting this currency either. Those statements were made well ahead of the Bitcoin fork.
As a result of this stance toward Bitcoin Cash, users were advised to move their bitcoins off the platform if they wanted to receive their BCH tokens. There are other exchanges and wallets out there which have supported Bitcoin Cash from the start, and sending money to those addresses is a trivial matter. Unsurprisingly, some people are still mad at the company for not giving them their tokens, even though Coinbase had clearly communicated their decision well in advance.
The bigger question is what will happen to the BCH tokens which were effectively issued to Coinbase during the hard fork. It is unclear how much money the company held in hot and cold storage at the time or how many tokens they should theoretically be holding at present. Considering that the exchange will not support BCH yet still holds the private keys to all wallets created on the exchange, it could effectively claim those tokens if they wanted to. It is doubtful they will do so, but you never know how things will play out.
FAQ on bitcoin cash https://t.co/fW54d9J100 pic.twitter.com/rQaIMywjpj
— Coinbase (@coinbase) August 1, 2017
Officially speaking, the company will continue to “ignore” the Bitcoin Cash fork for the time being. This will continue to create friction between Coinbase and supporters of this altcoin. The company will most likely not change its stance on Bitcoin Cash anytime soon, unless it suddenly became the longest blockchain. Given the lack of mining support, that seems highly unlikely right now.
Coinbase took similar action when the Ethereum network underwent a controversial hard fork over a year ago. When Ethereum Classic was created, the company had no initial plans to support that project either, but they went back on the decision and allowed ETC withdrawals a few weeks later. It is not entirely impossible to think we would see a similar incident with BCH in the future, although it is hard to say what will happen. It all depends on how viable Bitcoin Cash really is.
Some Reddit users have claimed that Coinbase is “scamming users” by not returning their rightful BCH. Those users had a lot of time to move money off the exchange if they had really wanted the BCH tokens. It is always easy to point the finger at a company, but it is hard to fault Coinbase in this situation. However, its stance will obviously create some bad blood regardless. We will continue providing updates as this story develops.
UPDATE: In a surprising turn of events, Coinbase has announced support for Bitcoin Cash. All users with a BTC balance during the fork will receive their BCH tokens accordingly. Withdrawals will be made available shortly as well.
