A Chinese crypto investor’s experience with Coinbase has sparked heated discussions online. It sheds light on the risks and regulations associated with digital asset investments. The user, who shared their story on Xiaohongshu, detailed a tumultuous journey with Bitcoin (BTC) and the U.S. exchange. Moreover, he raised concerns about account security and property rights.
Coinbase Liquidated Chinese User’s Bitcoin Holdings
In 2017, the investor, referred to as the original poster (OP), allocated approximately ¥200,000 in savings to Bitcoin. Their initial investment strategy was simple: “Buy BTC and hold long-term, either it soars or crashes.” However, the unpredictable nature of the crypto market soon led the OP down a path of frequent trading and asset diversification. This resulted in significant financial losses. By early 2018, the OP’s holdings had dwindled from 2 BTC to 0.5 BTC due to speculative trades in various altcoins.
After enduring the volatile market, the OP consolidated their remaining assets back into BTC and held onto it until 2020. Despite a brief recovery during the 2021 Bitcoin surge, further trading between BTC, USDT, and other tokens resulted in a reduced holding of 0.23 BTC. Concerned about the security of platforms like Huobi and Binance, the OP transferred their assets to Coinbase in late 2021.
However, the situation took a dire turn in June 2024 when the OP discovered their account was inaccessible. Upon contacting the exchange’s customer service, they learned that their account had been closed and their Bitcoin sold and transferred to an institution in Wyoming. The reason cited was that the account had been deemed “unclaimed property” due to inactivity.
However, the OP asserted they had logged in as recently as February and March 2024. CEX’s policy, aligned with state laws, considers accounts inactive for 3-5 years as unclaimed property. Hence, the OP’s login evidence was dismissed by customer service, which advised them to contact Wyoming’s Unclaimed Property Division.
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Is A Recovery Possible?
The above-mentioned revelation sparked outrage and sympathy among fellow crypto enthusiasts. One Reddit user emphasized the importance of maintaining control over one’s digital assets..they wrote, “Again proving, Not your keys, Not your coin.” This sentiment was echoed by the OP, who admitted, “Very true.”
Another user suggested potential legal recourse against the U.S.-based crypto exchange. They wrote, “As a public company, there are many ways to deal with them. 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.”
A contrasting perspective was offered by another user, who explained the legal framework in the U.S. Moreover, they indicated that a full recovery was indeed possible even though the OP believes he has “zero chances” of getting the funds back. They wrote, “In the U.S., if a financial account is inactive for two years, it automatically goes to unclaimed property. No one is robbing you. You can just apply to get it back.”
Indeed, the silver lining in this ordeal is the possibility of reclaiming the unclaimed property. “Unclaimed property can be reclaimed as long as you can prove your identity. It’s actually meant to protect everyone,” assured another commenter. They highlighted that the system is designed to safeguard assets rather than confiscate them permanently.
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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
