Coinbase Data Leak (signs of things to come)

Subscriber Trading Trackers May 15th

So coming off of the exciting news that Coinbase will be added to the SP500, news hit the wires that Coinbase was being extorted for $20m in relation to their recent data breach. Coinbase stated that no funds or private keys were compromised, but reported that customer ID documents, names, addresses for about 1% of their customer base.

This cybersecurity attack is estimated by Coinbase to cost the firm anywhere from $180m to $400m based upon initial estimates for remediation, reimbursements and any other potential losses.

What is interesting to note is that we suspect that this will be an increasing problem for these KYC/AML focused centralized exchanges. This is the gap that consistently is trying to be overcome when it comes to purely decentralized digital crypto currencies and this Wall Street, global central fiat banking centralized control mechanisms. We honestly believe this divide will never be bridged, but rather a bifurcated system will evolve. These systems will unfortunately have to run in parallel because for all intents and purposes, crypto currencies were inherently designed to be run as decentralized, immutable P2P network systems.

To try and promote let’s say on chain Bitcoin the largest by market cap decentralized digital asset as a “centralized” player is honestly foolish. We continue to see this call for Wall Streetization for these decentralized assets and we can only say that the direct result of this will be continued cybersecurity threats and ultimately one of these days MT. GOX 2.0.

The reality is, this MT. Gox 2.0 scenario is one of when not if. Imagine in the future if hackers wipe out Coinbase BTC to any extent. The reverberations would be catastrophic and honestly it wouldn’t even take more than a 10% hack of assets, because even the slightest disruption in this dangerous game that Wall Street is peddling to the masses, will turn the tide and lead to massive liquidation sales on these centralized exchanges.

We know and where a part of the original MT Gox hack and have spent the last decade embroiled in trying to recoup assets and this was at a time back in 2014 where the industry was fledgling…now fast forward to today and the industry is in the trillions and is intertwined now with traditional Wall Street firms. These firms have strict SEC regulatory requirements and we suppose that even this current small data breach at Coinbase, will come with requirements to report this to all its customers involved within its digital asset ETF products.

So for the Ark Investments, Bitwise, Blackrock, Grayscale, Invesco etc. out there, we suspect the next few months will be spent formulating a plan of attack in regards to damage control for the future. Guys we can’t stress enough, if you are going to play the decentralized asset game, the motto is very simple,

NOT YOUR KEYS NOT YOUR ASSET, OR NOT YOUR BITCOIN!

This is a long time mantra that we believe is an axiom not to be trifled with. We believe at the core of the digital monetary future is decentralized payments systems, ones that eliminate all counterparty risks, by which direct participation and risks are born by the end users. Sorry with the advent of AI and the future of AI assisted, well everything, we feel that mankind will be easily assisted by these mechanisms and less mishaps will occur.

Anyway that is our take, we have so much more insight, but the main theme is, buy these assets if you want, but buy them directly and then cold store them in your own wallet, where you control the keys and nobody but you has access to them, its not as difficult as you think.

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