Chinese crypto community has accused Coinbase of liquidating a user’s BTC without prior permission and this has not gone down well with the Chinese community.
The controversy started when a Chinese investor posted her experience on Xiaohongshu and reported security issues with the account and property rights.
The investor, known as Original Poster (OP), started with an initial investment of roughly ¥200,000 in Bitcoin in 2017. Their strategy was simple: This is the best strategy to follow:
“Buy BTC and hold long-term, either it soars or crashes.”
However, due to the volatility of the crypto market, there was a lot of trading and asset diversification which led to a lot of financial losses. As of early 2018, the OP had lost 0.5 BTC out of the initial 2 BTC due to speculative trades in altcoins. The OP then liquidated the remaining assets back to BTC and traded to Coinbase in the last quarter of 2021 for a more secured exchange.
Account Inactivity Leads to Liquidation
On June of 2024, the OP realized that their Coinbase account became inaccessible. When the account was closed they were told that the Bitcoin had been sold and transferred to an institution in Wyoming. The rationale given was that was due to the fact that the account had been classified as “unclaimed property” for lack of use.
The OP claimed they have logged in as recent as February and March 2024. However, Coinbase’s policy which is in conformity with the state laws holds accounts that have not been accessed for 3-5 years as unclaimed property.
Consequently, the OP’s login evidence was denied by customer service and the OP was told to contact Wyoming’s Unclaimed Property Division. This revelation has elicited mixed reactions from fellow crypt enthusiasts with many calling for the need for individuals to hold on to their digital assets.
Community Reactions and Legal Perspectives
The event has triggered various debates on social media platforms with many crypto enthusiasts coming out to raise their concerns. Another user of Reddit stressed on the need for owning digital assets, “Not you keys, not your coin” – once again.
Another user provided legal remedies against Coinbase and stressed that since the company is public, individuals may seek their money and other remedies from the SEC, FINRA, and PCAOB.
On the other hand, another person described the legal situation in the United States, stating that a complete recovery is possible. They pointed out,
“In the U. S. , if a financial account is inactive for two years, it automatically goes to unclaimed property. Nobody to steal from you. You just have to go for it.”
Another user shared a similar view saying that the property can be claimed back if one can prove ownership saying,
“One can get his or her property back if they come forward with proof of ownership, it is not a system that permanently steals people’s property.”
Meanwhile, Grayscale is said to have transferred a significant amount of Ethereum (ETH) from its wallet to Coinbase Prime. This major transfer happens at the same time after the US approved the spot ETH ETF just two days ago.
However, Ethereum has seen a bearish trend even before the launch of ETF, bringing to light the expected boost that was anticipated with the launch of the ETF.
The post Coinbase Faces Backlash for Liquidating Bitcoin of Inactive Chinese User appeared first on Coinfomania.
