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What Happens to Customers’ Bitcoins When Coinbase Exits a Jurisdiction?

Last Updated March 4, 2021 4:57 PM
P. H. Madore
Last Updated March 4, 2021 4:57 PM

We know what other sources are saying, and further alleging  that they have anonymous sources:

On its Wyoming account suspension page, Coinbase explains, “we apologize that we cannot currently project if or when our services may be restored.” […] Attempts to get Coinbase to change the state of residency have been “completely useless,” Natural News was told by users. Coinbase refuses to respond to users in any meaningful way, regardless of how much money has been seized by Coinbase.

We don’t know what Coinbase is saying, as apparently, they think that a press inquiry of this nature deserves more than 36 hours to wait for response.

What we do know is that Coinbase has not yet, to date, done business in any environment where it would be potentially breaking the law. Throughout the entirety of their customer service complaints, they have often blamed their policy decisions on government regulations. Yet, Wyoming has been one of the states to welcome Bitcoin business, provided they abide by the rules.

In Wyoming, to be a money services business, one must hold 25% of the value of the tender being transmitted. Coinbase says this provision makes it fundamentally impossible for them to relay currency because they are forced to hold these reserves in fiat cash. This is why Coinbase left, so we know that.

We know that Coinbase gave Wyoming customers 30 days notice.

What we don’t know is what became of customer funds after those thirty days had passed. Did Coinbase continue to try to reach the customers, keep the funds, or what? We inquired with Coinbase as to this matter, but received no word. So we decided to report what we know. Here is a quick recap:

  • After spending in some cases years to get in business in a couple of jurisdictions, including Wyoming, Coinbase pulled out when regulations – which CEO Brian Hoffman has often implied are good for the Bitcoin industry and totally navigable by Coinbase – became too much.
  • Coinbase gave customers notice.
  • Some customers, anonymous though they are, and unknown to CCN.com though they are, are surfacing, saying that their coins have never been returned.
  • Coinbase chooses to ignore the issue when CCN.com reaches out.
  • We go from potential non-story to preliminary story.
  • It is unclear whether or not customers who are in a now-not-okay jurisdiction are returned their funds or not, and whether customers who establish residency elsewhere are allowed to continue doing business after previously holding an account in the now-not-okay jurisdiction.

In closing, if you are one of the anonymous people who have reached out to other outlets and told of how your bitcoins are locked in Coinbase following their end of business in your jurisdiction (specifically Hawaii or Wyoming), please reach out and give us more details as well as evidence, so we can write a better story here. For whatever excuse as to outages and what not that will be made, a company which has made such flagrant use of the press, alternative and otherwise, to profit from the rise of Bitcoin from almost the outset has no excuse to be ignoring press inquiries at a time of all-time interest, speculation, gossip, as well as fever-pitch trading.

Featured image from Shutterstock.