The bitcoin hard fork went off without a hitch, creating bitcoin’s new alter ego, bitcoin cash. Immediately following yesterday’s fork, individuals who protected their private keys gained access to bitcoin cash. However, those who stored their coins on an exchange, left that decision to the exchange. This caused tensions to flare between Coinbase and their […]
The bitcoin hard fork went off without a hitch, creating bitcoin’s new alter ego, bitcoin cash. Immediately following yesterday’s fork, individuals who protected their private keys gained access to bitcoin cash. However, those who stored their coins on an exchange, left that decision to the exchange. This caused tensions to flare between Coinbase and their customers. They are now angrily requesting their share of bitcoin cash from the company.
Also read: Panel Recommends Indian Government Take Immediate Steps to Stop Bitcoin Use
Prior to yesterday’s chain split, several exchanges publicly stated they would not be providing support for bitcoin cash. Coinbase was one of these exchanges. They provided a FAQ answer page before the split got under way. In regards to bitcoin cash, they said:
Coinbase will not support the BCC blockchain or digital currency. Any bitcoin within customers’ accounts will remain accessible on the main blockchain only. If you wish to have access to both BTC and BCC, please be sure to send your BTC off the platform by July 31.
After the split occurred, everyone who had moved their funds off of Coinbase and maintained their private keys, got awarded with an amount of bitcoin cash equivalent to their bitcoin legacy holdings.
Coinbase Customers Believe They are Entitled to Bitcoin Cash
Even though Coinbase said they will not support bitcoin cash, their customers still believe they are entitled to it. They have been posting angry and accusatory messages on Coinbase forums.
One legal scholar, Tim Wu, pointed out that Coinbase could be in serious legal trouble if they do not hand over the bitcoin cash. He tweeted, “In my opinion, @coinbase is courting serious, maybe ruinous legal trouble if it doesn’t give its users the full value of the Bitcoin fork.” He also analogized the situation to a brokerage firm not giving stock splits to their customers.
Wu believes that even Coinbase’s terms of service agreement will not save them. He implies they are obligated to do the right thing and hand over the bitcoin cash.
Imagine a stock split where the broker declined to issue the new stock to its owners– that the @coincase position right now
— Tim Wu (@superwuster) July 30, 2017
Coinbase Customers Legal Website Portal
There is even a website already set up for Coinbase customers to organize. It is the Coinbase Bitcoin Cash Lawsuit Portal. The site was apparently created to bring Coinbase customers together and initiate the start of legal proceedings. The site reads:
“Our ultimate aim is work with Coinbase, Inc to help them understand the user community’s concerns and take the correct and appropriate action of allowing users to trade or withdraw the Bitcoin Cash tokens that rightfully belong to them following the 8/1/2017 Bitcoin hard fork. However, Coinbase needs to understand that the community is ready and willing to pursue legal action if their BCH tokens continue to be withheld by Coinbase Inc, resulting in tangible and significant financial loss.”
Needless to say, Coinbase will have ample pressure applied to them regarding the bitcoin cash debacle, which could escalate into a burdensome and pricey legal affair.
Ethereum Split; Coinbase Has Not Commented on the Situation
Still, Coinbase may give into the pressure. This kind of situation has happened before. When Ethereum split last year into Ethereum Classic, Coinbase decided to give their customer base access to the currency. It took some time, though. A similar scenario could play out and Coinbase could finally hand over the bitcoin cash. At this time, however, it does not appear Coinbase has remarked on the situation.
Do you think Coinbase with capitulate with demands for bitcoin cash from their customers? Will a class action lawsuit take place? Let us know in the comments section below.
Images courtesy of Shutterstock and Coinbase.com
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