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Coinbase has come under fire for selling a Chinese user’s Bitcoin holdings, citing inactivity despite the user’s claim of recent logins.
Dispute Arises Over Bitcoin Liquidation Policy
Online debates have become more heated about the experience of a Chinese crypto investor with Coinbase. Investments in digital assets are analyzed, with a focus on the regulations and hazards involved.
According to Coingape, the individual's account, which they uploaded on Xiaohongshu, described a turbulent experience with Bitcoin (BTC) and the American exchange. In addition, he voiced his worries regarding the safety of his accounts and his property rights.
About ¥200,000 of the investor's savings went into Bitcoin in 2017, which is now known as the original poster (OP). "Buy BTC and hold long-term, either it soars or crashes," was their original investment plan. A course of frequent trading and asset diversification was soon taken by the OP due to the uncertain nature of the crypto market. Consequently, substantial monetary losses occurred. The owner's holdings had decreased from 2 BTC to 0.5 BTC by early 2018 as a result of speculative trades in different altcoins.
Investor Moves Assets to Coinbase for Security Reasons
The original poster weathered the market storm by reinvesting their losses in Bitcoin and hung on to it until 2020. A decrease in holdings to 0.23 BTC occurred as a consequence of additional trade between BTC, USDT, and other tokens, even though there was a short recovery during the 2021 Bitcoin boom. The OP moved their money from Huobi and Binance to Coinbase in late 2021 because they were worried about the security of both platforms.
But things became worse in June 2024 when the OP realized their account was unreachable. They discovered their account had been terminated and their Bitcoin sold and moved to a Wyoming institution when they contacted the exchange's customer care. The account had been declared "unclaimed property" because of its lack of activity, according to the given rationale.
User Disputes Coinbase's Inactivity Classification
Nevertheless, the user in question claimed to have logged in as recently as February and March of 2024. In accordance with state rules, CEX treats accounts that have been dormant for three to five years as unclaimed funds. Customer support thus rejected the OP's login evidence and directed them to the Unclaimed Property Division of Wyoming.
Among other crypto fans, the aforementioned discovery caused both wrath and pity. "Again proving, Not your keys, Not your coin." That's the message one Reddit user wanted to get across about keeping one's digital assets under one's control. The original poster agreed, saying, "Very true."
Someone else brought up the idea of taking legal action against the cryptocurrency exchange situated in the US. "There are many ways to deal with them as a public company," they stated. "1. Sue Coinbase’s management and company, demanding returns and compensation. 2. Write complaints to the SEC, FINRA, and PCAOB. They can easily penalize Coinbase with millions in fines.”
Unclaimed Property Rules Lead to Bitcoin Liquidation
Another user provided a counterargument by outlining the structure of American law. Even if the OP thinks he has "zero chances" of getting the money back, they still say a full recovery is conceivable. "Unclaimed property" is what happens to money in American banks when an account stays dormant for two years, according to their note. There is no one trying to take advantage of you. "Just apply, and you'll get it back."
The potential for recovering the unclaimed goods is, in fact, a silver lining to this tragedy. "Unclaimed property can be reclaimed as long as you can prove your identity. It’s actually meant to protect everyone," said another commentator. Instead of permanently seizing assets, they emphasized that the system is meant to protect them.
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