WARNING! Your Bitcoin Is NOT SAFE w/ Coinbase!!

by bigr10published on August 1, 2020

egg yolk what is going on with those who tune in daily the chico army and of course any newbie aka a viewer of the tube my name is tyler the host of the channel that really loves the birth of a new video meme

On the internet brother brother no no no no no no whoa brother can i talk to your shoes real quick hold on hold on hold on hold on got the

Pants on don’t touch me oh no no no way yeah yeah this is the last time i’m gonna tell you guys he got them triple h shoes on

It’s time for chico crypto so i gotta cover the news that ripped through the crypto space late in the day on wednesday it was announced that national banks in the us could now

Offer custody services for crypto assets as we can see from coindesk article on the news it was a regulator the office of the comptroller of the currency who gave this the green light and i knew something like this was coming i’ve been

Covering it lately brian brooks coinbase’s former chief legal officer first joining the office of the comptroller in march of this year officially leaving the base and joining

The government and then by may in just a couple of months he became the acting comptroller of the currency our nation’s top banking regulator position so

A move like this now makes sense although i personally thought it would be the other way around i thought crypto companies would become the banks and get licenses to operate like one as coinbase was

Already trying to get a national banking license in 2018 not banks becoming the crypto companies so is this good is the big question that national banks can custody our crypto

Assets for us well let’s get the actual document from the occ and look into it a bit to get a chico interpretation of what was said it states we conclude a national bank

May provide these cryptocurrency custody services on behalf of customers including by holding the unique cryptographic keys associated with cryptocurrency this letter also reaffirms occ’s

Position that national banks may provide permissible banking services to any lawful business they choose including cryptocurrency businesses so long as they effectively manage the risk and comply with applicable law

So right away we get what this is about in the short term it was all about finalizing the red tape for getting crypto companies like coinbase the ability to be served by our national banks it

Means that when you have your assets on coinbase a federally chartered bank in the us may be the custodian of those funds what do i mean well let’s look at this these guys are allowed to do it the

National banks that were active as of 6 30 2020 which includes all the big banks the household names from every state jpmorgan chase providing banking services to coinbase well that is what the new ruling by the

Occ says can and actually already has happened in may of this year it was announced that jp morgan was opening accounts for crypto exchanges and coinbase and gemini were the first

Two what were those services though well from that coindesk article the wall street journal sources said jp morgan is now providing coinbase and gemini’s us users with deposits and withdrawals via wire

Transfer and automated clearinghouse ach transactions it’s also helping the exchange with cash management services so jp morgan got okayed for cash money services for the base back in may but

Now they are okay to actually hold the crypto for its customers which in jp morgan’s case right now is coinbase so are you comfortable with jp morgan holding your private keys if

You use coinbase that is very likely a possibility with this new ruling which initially didn’t make a whole lot of sense to me i’m sure you know about coinbase custody it’s their custodian

Solution which is the largest in the world having billions upon billions under its management more than 150 different clients in 14 different countries

Then in just february of this year they were the first custodian to pass two major security evaluations soc 1 and soc 2 but now jp morgan can compete with coinbase at their own game doesn’t make sense until you realize

That coinbase custody was built for institutions and not regular people to become a customer you either have to be a business or an accredited investor so this is how coinbase has been providing regular custody of

Regular customer funds like you and me since 2018 they are their own customer of coinbase custody from the custody website it says coinbase custody operates as a standalone

Independently capitalized business to coinbase inc coinbase custody is a fiduciary under new york state banking law all digital assets are segregated and held in a trust for the benefit of our

Clients which that trust they received in 2018 from a blog post coinbase custody receives trust charter from the new york department of financial services so why all this

Work from coinbase to have one of its banking partners come in to swoop up their booming custodian business insurance my friends it all comes down to insurance of those freaking assets now for the regular

Coinbase app for retail investors not coinbase custy we get this for our funds coinbase prioritizes the security of our customers funds all digital currency that coinbase holds online is insured

If coinbase were to suffer a breach of its online storage their insurance policy would pay out to cover any customer funds lost as a result coinbase holds less than two percent of customer funds

Online the rest is held in offline storage so the key word there is online those cold storage coins of which most of their regular customer assets is 98 is

Actually uninsured as of right now which they told us in april of last year coindesk covered it in an article titled 255 million coinbase confirms extent of crypto insurance coverage

So the two percent that is insured is worth 255 million which means other 98 about 125 billion in cold storage is uninsured and that is probably as scary as

Fuck for coinbase because that is a ton of money and they have seen what happens to other exchanges when they lose it bitfinex and here is something else interesting i found with coinbase

Custody if you store your assets with them you get a nice little perk that regular customers don’t they ensure cold storage too which i’m sure the trust designation by new york

Allowed them to do that for their customers but there’s still limitations with even that insurance from the section on what percent of your assets intend to be covered by this policy it

States we carry an annually renewed commercial crime policy that carries a 255 million limit per incident and overall with coinbase global as a name insured

So again limited to 255 million but with custody you get the perk of cold storage protection up to 255 million which if they get into that it’s worth a whole lot more

Well shoot coinbase you got a ton of money filling up under your control and things are getting risque risque so i think you need the big boys to come to the rescue national custodial banks they call them

And from wikipedia the five largest are the bank of new york mellon state street bank and trust company jpmorgan chase citigroup and b b paradis securities services so why is this important

Well these custodians just listed can now hold crypto assets and they’re a whole hell of a lot more protected than coinbase for example going to something like vanguard an american registered

Investment advisor based in malvern pennsylvania with over 62 trillion assets under management they state this regarding the security of its assets

Specifically mutual funds vanguard mutual fund assets are protected on your behalf by the strict regulatory controls set forth in the investment company act of 1940 this act requires each mutual fund to

Place its cash and securities with a qualified custodian typically a us bank then regarding the safety of the assets they say us banking laws generally provide that

Segregated mutual fund assets held by bank custodians aren’t subject to the liens or claims of the custodian’s creditors or of the federal deposit insurance corporation

Fdic to further mitigate risk vanguard takes the precaution of using several different independent custodian banks these banks include the bank of new york mellon brown brothers hairman and company jp

Morgan chase bank and state street bank and trust company so they’re using the big names those custodians on the wiki but here is a thing i think is happening i hope i explain it well

By these guys providing custody the assets won’t be subject to liens or claims of the custodian’s creditors or the fdic just like the mutual funds or it’s the first step to getting them there

Coinbase has billions upon billions of dollars of assets that are uninsured the risk of that is beyond their control and from what i see they are bending the knee to the banks which means jp morgan will eventually

Have control of your assets if you use coinbase but it’s crypto and we don’t necessarily need to store it with you coinbase so suck a nut jpmorgan cheers i’ll see you next time

So you

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