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Coinbase Tells Users ‘Your Assets Are Safe’ as Some See $0 Balance - BLOOMBERG

FEBRUARY 29, 2024

(Bloomberg) -- Coinbase Global Inc., the biggest US cryptocurrency exchange, experienced a spate of outages Wednesday on its retail platform just as Bitcoin continued to rally the highest price in more than two years. 

Coinbase reported that some individual investors may see zero balances across their Coinbase accounts and experience errors in buying and selling. The company said it’s investigating the issues, as well as delays in sending and receiving assets on the Ethereum network.

“Your assets are safe,” the company said on its website.

Coinbase Chief Executive Officer Brian Armstrong posted on the X social-media platform that the company is seeing a surge in traffic and is working to fix it. 

The company is facing problems amid a fierce crypto rally, fueled by strong performance of exchange-traded funds investing directly into Bitcoin and by the upcoming Bitcoin halving — a pre-programmed event that happens roughly every four years and cuts the issuance of new tokens in half. Bitcoin’s price rose about 8% in the last 24 hours, to more than $61,000 currently.

Crypto exchanges often experience outages during big market moves. That can leave some users in a lurch as they try to cover their short positions or otherwise take advantage of a market move. Coinbase has reported 17 incidents, each citing various issues, since the start of the year.

However, issues with Coinbase may have more significance these days, considering the outsized role the company plays in helping to manage the new spot-Bitcoin ETFs. Coinbase provides a variety of services to the fund issuers, including serving as custodian for eight of the 10 spot Bitcoin ETFs.

A Coinbase spokesperson said Prime, which services institutional clients such as those tied to newly launched exchange-traded funds investing directly into Bitcoin, hasn’t been impacted.

Coinbase’s shares rose 2.5% at $204.16 as of 3 p.m. in New York, after earlier rallying as much as 6.5%. The stock is up 17% year-to-date and trading near the highest level since March 2022. 

--With assistance from Katie Greifeld.

(Updates with updates on institutional impact in eighth paragraph)


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