Coinbase attracted criticism from the Chinese crypto community as the exchange allegedly liquidated a user’s Bitcoin holdings without prior notification.
The experience of a Chinese crypto investor with Coinbase has prompted intense online discussions. It illuminates the hazards and regulations linked to the investment of digital assets. The user shared their tale on Xiaohongshu and described a tumultuous journey with Bitcoin (BTC) and the U.S. exchange. Additionally, he expressed apprehensions regarding the security of accounts and the protection of property rights.
Coinbase liquidates Chinese user’s Bitcoin holdings
The original poster (OP) investor allocated approximately ¥200,000 in savings to Bitcoin in 2017. Their initial investment strategy was straightforward: “Buy Bitcoin and hold it for the long term, regardless of whether it experiences a significant increase or decline.” Nevertheless, the OP was soon compelled to engage in frequent trading and asset diversification due to the unpredictable nature of the crypto market. This engagement led to substantial financial losses. The OP’s holdings had decreased from 2 BTC to 0.5 BTC by early 2018 due to speculative transactions in various altcoins.
After enduring the volatile market, the OP consolidated its remaining assets back into BTC and held onto them until 2020. The holding of 0.23 BTC was reduced due to additional trading between BTC, USDT, and other tokens despite a fleeting recovery during the 2021 Bitcoin surge. In late 2021, the OP transferred its assets to Coinbase due to concerns regarding the security of platforms such as Huobi and Binance.
Nevertheless, the situation significantly worsened in June 2024 when the OP discovered their inaccessible account. After contacting the exchange’s customer service line, they were informed that their account had been terminated and their Bitcoin had been sold and transferred to an institution in Wyoming. The reason was that the account had been classified as “unclaimed property” due to inactivity.
Nevertheless, the OP claimed they had logged in as recently as February and March 2024. CEX’s policy, consistent with state regulations, regards accounts inactive for 3-5 years as unclaimed property. Therefore, the customer service representative should have considered the OP’s login evidence and recommended that they contact Wyoming’s Unclaimed Property Division.
Is Recovery Feasible?
The revelation above elicited both outrage and sympathy from fellow crypto enthusiasts. A Reddit user underscored the significance of preserving control over one’s digital assets, saying, “Again proving, Not your keys, Not your coin.” The OP concurred with this sentiment, stating, “Very accurate.”
Another user suggested potential legal action against the U.S.-based crypto exchange. They stated, “There are numerous methods to interact with them as a public company.” 1. File a lawsuit against Coinbase’s management and company, requesting compensation and returns. 2. Submit complaints to the SEC, FINRA, and PCAOB. They can impose millions in penalties on Coinbase with ease.
Another user provided a different perspective, elucidating the legal framework in the United States. Moreover, they suggested a complete recovery was feasible despite the OP’s conviction that he has “zero chances” of regaining the funds. They stated, “In the United States, a financial account that remains inactive for two years is automatically transferred to the unclaimed property category.” You are not being robbed. You are only required to apply to reclaim it.
The potential for reclaiming the unclaimed property is, in fact, the silver lining in this ordeal. “Unclaimed property may be retrieved provided one can establish identity.” Another commenter reassured that it is intended to safeguard all individuals. They emphasized that the system is designed to protect assets rather than irrevocably confiscate them.