From WSJ, 02/19/25: https://www.wsj.com/finance/currencies/coinbase-crypto-ownership-accounting-7c97b26a It sounds like the entire concept of custody is in a gray area legally, particularly when it comes to Bitcoin. I am referring to the fact that the SEC has effectively conceded that BTC is not a security. That cannot be said for most other coins. What does it mean for someone to have custody of an intangible asset that is neither money nor a security? If ownership or title is defined as the party that holds the keys... The how is it possible for one person to have custody of such an asset that belongs to a different person? If possession of the keys is what determines who owns the asset, and not some externally validated form of registration, like you have for automobiles, shares of stock and real estate... then you cannot separate custody and ownership.
Enforcing the terms of a trust--that is, demonstrating the existence of a trust, and pursuading other parties to recognize or honor the relationship between a trustee and beneficiary--requires mechanisms of trust and verification that do not exist in crypto, because crypto was built to avoid the need for such mechanisms.
That's probably not going to happen. Read the article carefully again. They changed how they are reporting the assets in custody. The new method of reporting implies that the true owner of the coins is indeed the accountholder and not Coinbase. That is a positive thing for accountholders, not a negative thing. Some customers may feel safer. But the external reality has not changed. Coinbase is still holding the keys. And the cautionary langauge in their disclosure has not changed. What may have changed is someone's opinion as to whether the coins in custody, in the event of a bankruptcy, would fall into the hands of the bankruptcy estate and become available for payment of debts owed by Coinbase, instead of simply being handed over to the accountholders. When I "someone's opinion," I am referring to someone such as Coinbase's lawyers.
Now that scamming has been green lit (as long as you pay your dues to the Orange Monkey) it's obvious what's goin on. DOJ also dropped their case against Coinbase. It's going to be a free for all. Better keep it in cold wallets.
Coinbase now classifies customer assets as corporate assets, meaning funds may be at risk in case of bankruptcy. This highlights the importance of self-custody wallets for security. For more, visit https://tothefinance.com/
Okay, that link goes to the home page of that website. And on the homepage, there is no mention of Coinbase. The WSJ article does indeed say that this issue not settled, and the coins held by Coinbase in custody for their customers could be at risk in a bankruptcy. However, the WSJ article also says that the recent change in accounting treatment by Coinbase is that customers' coins are now off Coinbase's balance sheet, and that this change suggests that the coins are owned by the customers, and not by Coinbase. Here's the text from the article: The shift highlights a lingering issue: Who owns those digital assets? The off-balance sheet treatment suggests customers do, rather than Coinbase. But Coinbase in its latest disclosures to customers still says the issue isn't clearly resolved. If Coinbase went bankrupt, the bitcoins and other tokens held on behalf of customer could be considered the property of the bankruptcy estate, and such customers could be treated as unsecured creditors. The recent change in accounting suggests that Coinbase is taking the position that the coins are not corporate assets. That is exactly the opposite of what you said in your post.