Coinbase has come under criticism as reports of possible bankruptcy continue to spread. Reddit users liken Coinbase to Celsius (CEL) for unreliable transfers and withdrawals.
Reddit users question Coinbase’s Celsius-like policies
The community reported today that they are experiencing issues with withdrawals and transfers on Coinbase. Some users say they can’t withdraw dollars to their Coinbase wallets. Among the allegations is that the exchange deleted the complaints on Reddit. In a tweet published on Tuesday, CryptoWhale claimed on the “r/CoinBase” subreddit that Coinbase had deleted comments made by users. The Twitter account sourced these claims with the screenshots below.
CoinBase is deleting Reddit posts & comments about customers not being able to withdrawal funds. pic.twitter.com/Gy1Yh21EL3
— CryptoWhale (@CryptoWhale) July 18, 2022
Reddit users specifically highlighted Coinbase’s Celsius-like policies amid Coinbase-related withdrawal and transfer issues. Celsius’ suspension of withdrawals in June caused panic among its users. Coinbase CEO Brian Armstrong reassured users that their funds are safe on these allegations. Armstrong expressed regret that he had not warned them of the risk before implementing it.
Users will be vulnerable if Coinbase goes bankrupt
Users are now investigating issues with cryptocurrencies that are not supported by the government. Coinbase is not covered by the FDIC, which reviews financial institutions for investor protection. Therefore, if Coinbase collapses or declares bankruptcy, the FDIC insurance on cryptocurrency funds will not apply.
Cash insurance policies at Coinbase stipulate that only fiat currency is covered by FDIC transit insurance. Users’ funds are deposited by Coinbase to a number of major institutions.
Things Are Moving In Favor Of The Crypto Exchange
The cryptocurrency exchange continues to increase its activities in Europe, despite speculation swirling around. On July 18, Coinbase was approved as a cryptocurrency exchange in Italy. Additionally, Coinbase’s share price rose 9% to $58.67 on Monday as a result of the sharp rise in Bitcoin and Ethereum prices. At the time of writing, it is trading at $62.07.
Why did Celsius go bankrupt?
As you follow on Kriptokoin.com, Celsuis presented its restructuring plan to US New Southern District Bankruptcy Court Judge Martin Glenn today. Last June, the company caused sales in the cryptocurrency market when it announced that it was suspending its operations. The post included the following statements:
Due to extreme market conditions, we are announcing today that Celsius is suspending all withdrawals, Swaps and transfers between accounts.
Celsius announced about a month later, on July 13, that it had filed for Chapter 11 bankruptcy. Court filings show Celsius worth about $1.2 billion in red.
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