Not Your Keys Not Your Coins-Judge Rules In Favor Of Coinbase
We have all heard it before.
"Not your keys, not your coins."
This is a basic premise in the world of cryptocurrency. Sadly, many still do not realize this. Instead they still trust centralized exchanges to hold their tokens.
There were a number of events that showed how risky this can be. Many of them made big time news so there is no need to revisit them here. However, the bottom line is people find that putting their coins on exchanges might not be the safest option out there.
Now we see another reason why not to trust exchanges with ones coins. It could end up costing one some coins in the process.
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An appellate court in California ruled in favor of Coinbase. The exchange was being sued for deciding not to support the Bitcoin Gold hardfork in 2017.
Darrell Archer filed the lawsuit against the company claiming it violated the contractual obligation by not supporting the hard fork when it took place. Coinbase refused to support the fork since the code was not released and it considered it to be a security threat.
Essentially the court ruled that nowhere was Coinbase contractually obligated to support any forks. The claim of material loss by the plaintiff was also turned away.
Archer alleged that Coinbase profited from the Bitcoin Gold fork by not turning the coins over to Bitcoin holders. He had 350 Bitcoin on Coinbase at the time of the fork , thus providing the exchange with a number of Bitcoin Gold when the fork occurred.
This ruling is likely going to impact other cases as well as redefine property rights.
For a full write up of the case details:
https://www.coindesk.com/appeals-court-backs-coinbase-in-bitcoin-gold-fork-breach-of-contract-lawsuit
Here again, we see a situation where one placed coins on an exchange and lost out. In the future, there is no guarantee that an exchange will turn the coins over. This ruling means they are not contractually obligated.
Airdrops can be a terrific way for token holders to add to their holdings. Many projects like to drop coins as a way to provide incentive to individuals to join their network.
It is also a method of distribution that can get the tokens out there.
The fact that exchanges have no responsibility to turn the tokens over to its clients means that it can decide to profit at any moment. While Coinbase might have been honest about why they didn't support it, the fact that they were able to get some tokens tells a big part of the story.
So here it is again: not your keys, not your coins.
Be sure of who is holding the rights to your cryptocurrency. Failure to do so could end up costing.
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Posted Using LeoFinance
