There has been some concern regarding the solvency of the Coinbase exchange ever since a bug was discovered to receive “free” ETC when buying Ethereum. Many people felt the company was not taking precautionary steps to protect themselves from the replay attack vector. But in a recent company statement, CEO Brian Armstrong confirmed the company has more than enough funds to cover user deposits in every currency.
Coinbase Claims Everything Is Okay For Now
Over the past few days, there have been some shreds of evidence regarding a potential solvency issue for Coinbase. The popular exchange platform has been distributing pre-hard fork Ethereum coins to buyers, which makes them eligible for an equivalent value in Ethereum Classic. Some people felt this was an exploit that would end up costing Coinbase money, but those claims may have been overstated.
The Ethereum replay attack vector has proven to be of grave concern to various cryptocurrency exchanges. Funds located in cold storage that came in before the Ethereum hard fork is technically the property of the user. However, ever since Ethereum Classic came around, there has been a question as to who owns these “new” coins.
With Coinbase not showing any intent to officially support ETC on their platform, the discussion only intensified. People who buy Ethereum from Coinbase right now are often rewarded with a similar value in ETC once they send it to a different exchange. However, the bigger question is what will happen to the ETC coins belonging to people who store their ETH in a Coinbase wallet.
Coinbase has all funds to cover user deposits. If you prefer to cntrl you own private keys, see our multisig vault https://t.co/Dt1EdiohpG
— Brian Armstrong (@brian_armstrong) August 1, 2016
By the look of things, any concerns people may have had are unfounded at this stage. Or that is what Coinbase CEO Brian Armstrong is telling the world, as he tweeted the company has “all funds to cover user deposits.” While this does not address the ETC question entirely, it is good news to hear the company is not insolvent.
Moreover, people who buy Ethereum from Coinbase right now will not be eligible for an ETC “credit” when they deposit funds to a different exchange. Whether this is due to a Coinbase fix, or other exchanges implementing better precautions, is anybody’s guess right now. But by the look of things, all issues have been addressed.
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