Coinbase Sells User Bitcoin Holdings Due To Inactivity But There’s A Catch

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As a seasoned Chinese crypto investor, I’ve had my fair share of ups and downs with various digital asset exchanges, and my recent encounter with Coinbase has left me feeling both frustrated and enlightened. In 2017, I invested a substantial amount of my savings into Bitcoin (BTC), intending to hold long-term. However, the unpredictable nature of the crypto market led me down a path of frequent trading and asset diversification, resulting in significant financial losses.

A Chinese cryptocurrency investor’s account of their experiences with Coinbase has ignited intense debates online. Their story, recounted on Xiaohongshu, offers insights into the risks and regulatory challenges surrounding digital asset investments. The user described a rollercoaster ride with Bitcoin (BTC) and Coinbase, expressing apprehensions about account security and the protection of their assets as property rights.

Coinbase Liquidated Chinese User’s Bitcoin Holdings

In 2017, an investor, commonly known as the original poster (OP), put around ¥200,000 of their savings into Bitcoin. Their plan was straightforward: purchase Bitcoin and keep it for a long-term investment, either watching it skyrocket or crash. However, the volatile crypto market soon tested the OP’s resolve, leading them to engage in frequent trades and expand their asset portfolio. Unfortunately, this approach resulted in substantial financial losses. By early 2018, the OP’s Bitcoin holdings had shrunk from 2 Bitcoins to just 0.5 Bitcoins due to their speculative investments in numerous altcoins.

After weathering the unpredictable market conditions, the original poster (OP) regrouped their residual funds and invested them in Bitcoin (BTC) around the year 2020. Although BTC experienced a short-lived rebound during the 2021 surge, subsequent transactions involving BTC, USDT, and other tokens led to a decreased holding of approximately 0.23 Bitcoins. Worried about the safety of exchanges such as Huobi and Binance, the OP moved their assets to Coinbase towards the end of 2021.

In June 2024, the OP faced a distressing development when they couldn’t access their cryptocurrency exchange account. When they reached out to customer support, they were dismayed to find out that the account had been shut down and the Bitcoin held within it had been moved to a Wyoming institution. The explanation given was that the account had been classified as “unclaimed property” due to prolonged inactivity.

As a researcher, I’ve come across the situation where the original poster (OP) claimed they had logged into their CEX account as recently as February and March 2024. However, according to CEX’s policy, which aligns with state laws, an account is considered inactive if it hasn’t been used for 3-5 years. Consequently, the login evidence provided by the OP was disregarded by customer service. They suggested that the OP should reach out to Wyoming’s Unclaimed Property Division instead.

Is A Recovery Possible?

The above-mentioned disclosure ignited both anger and compassion among crypto community members. One Reddit user underscored the significance of possessing personal control over digital assets, stating, “This once again emphasizes, ‘If you don’t hold the keys, you don’t own the cryptocurrency.'” This viewpoint was seconded by the original poster, who acknowledged, “Absolutely right.”

One user proposed exploring legal options against the US-based cryptocurrency exchange, Coinbase.They suggested the following possibilities:

As a crypto investor, I came across a different perspective from another user regarding the situation with my supposedly lost funds. They pointed out that in the United States, if a financial account remains inactive for two years, it becomes classified as unclaimed property. Contrary to what you might think, no one is stealing from you. Instead, you have the opportunity to apply and potentially reclaim your assets.

“Despite the challenges we’ve faced, there’s a positive side: unclaimed properties can still be claimed with proof of identity. As another user pointed out, this system exists primarily to protect and secure assets, rather than to permanently seize them.”

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2024-07-25 11:46