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Coinbase to Support the Withdrawal of Bitcoin Forks

Last Updated March 4, 2021 5:06 PM
Gerelyn Terzo
Last Updated March 4, 2021 5:06 PM

US bitcoin exchange Coinbase has preempted any backlash from its user base for supporting bitcoin forks.

The company announced on its blog  plans to support the withdrawal of Bitcoin Forks across its suite of products for the foreseeable future.

We’ve already seen several new coins created from Bitcoin Forks, the most common among them being Bitcoin Cash but also Bitcoin Gold and Bitcoin Diamond, to name a few. Now Coinbase is gearing up for more. It doesn’t mean that Coinbase will be adding more coins to be traded on its digital asset exchange GDAX, at least not yet.

“We are not announcing support for any specific assets at this time. As always, we look at technical, operational, and legal considerations when deciding which Bitcoin Fork assets to support and will always state on our website which particular assets are supported.” – Coinbase

Coinbase got itself into a heap of trouble with investors last year for a botched rollout of Bitcoin Cash. Investors claimed it involved insider information, giving the company’s internal staff an advantage over them and leading to class-action lawsuits against the exchange. This time around, Coinbase states clearly that it’s following protocol, saying:

“We are announcing this both internally and to the public as consistent with our process for adding new assets.”

Coinbase Subsidiaries

Coinbase is the parent company of several subsidiaries, most of which will support Bitcoin Fork withdrawals. The company outlined the approach that each of its businesses will take to support Bitcoin Forks.

  • Coinbase Custody – It will develop infrastructure to support Bitcoin Forks. The company said that Coinbase Custody will likely support a greater number of forked assets versus its GDAX or Coinbase platforms.
  • GDAX will similarly develop the infrastructure to support Bitcoin Forks for assets that are kept on this platform when the fork occurs. They remind you that adding support for withdrawals doesn’t extend to trading the asset.
  • Coinbase Index Fund – Coinbase has an index fund, which gives investors exposure to the coins listed on GDAX. It’s open to accredited US investors and it will support Bitcoin Fork withdrawals. Assets are added to the index on a market-cap weighted basis, similar to the S&P 500 index for stocks.
  • Coinbase – It “anticipates infrastructure to support the withdrawal of Bitcoin Forks for assets held on the platform at the time of the fork.” Coinbase reminds traders it will only list assets on the platform once they’re added to GDAX and just because a coin is listed on GDAX doesn’t mean it will necessarily be supported on Coinbase.
  • Coinbase Commerce – This is a private-key fueled payments platform and therefore the merchant is control of the assets.

Coinbase also just announced  Coinbase Ventures, an investment vehicle for early-stage companies.

Featured image from Shutterstock.