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Comment by Animats | Hacker News Reader

Coinbase will either cave in on this or be sued and lose. Especially since they're sluggish about large withdrawals.

The real risk for Coinbase comes if they don't have 100% of the Bitcoins on deposit. If they don't have all those Bitcoins, like Mt. Gox, we're going to find out.

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I can't imagine they'll continue to ignore the third largest cryptocurrency by market cap. Also it would be crazy for them to have encouraged their users to withdraw BTC prior to the fork if they were insolvent. I imagine it will all work out, though Coinbase loses lots of reputation points from me for by insisting on being so slow and reactionary instead of proactive like several other exchanges.

It won't be that large for long. Only reason why it's so high is the few places you can sell it aren't accepting BCH deposits; the only way you can sell is if you had BTC there prior to August 1. There's a ton of pent up demand to sell; once those exchanges allow deposits, there will be a ton of dumping and the price will fall substantially.

That makes it worse for Coinbase. They could be held liable for losses incurred because people couldn't access their BCH to sell at the top.

This is the sort of thing which may involve Coinbase in litigation over whether SEC and CFTC rules on "fails to deliver" apply to them. When a real broker does something like this, they're on the hook for customer losses.

No, they won't. You can't deposit into those exchanges yet, so if those Coinbasers had those BCH in hand, ready to sell, they wouldn't be able to anyways. In other words, if you didn't have BTC on those exchanges prior to August 1, BCH is an unsaleable asset, so that price is not relevant.

I agree. Frankly I'm shocked it even got this far. Who on Coinbase's legal team gave the okay for such an insane directive? You can't just give customers a 10 day ultimatum to withdraw their funds or forfeit them. An exchange in the public market that attempted that would be sued into oblivion.

Furthermore how are they getting by on their justification? You don't need to allow trading for new cryptocurrencies to be disbursable. You just need to send them to customers.

People with Coinbase accounts effectively had an IOU in the amount of X BTC.

After the fork, people with Coinbase accounts still have an IOU in the amount of X BTC.

What funds were lost?

Are you claiming that if I owed someone X BTC before the fork, I owe them both X BTC and X BCH afterward?

Or, bitcoin cash will crash before lawsuits are filed and people stop worrying about their missing 0.1%.

Seems somewhat unlikely after the surprisingly high rates BCH has been trading in past 36 hours (currently at ~16%), but wanted to point out the third possibility.

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