One of the many ironies about "decentralized, trustless" cryptocurrencies is that they are neither
decentralized nor trustless. Since in practice you can neither
buy nor sell real goods using them, you need to trust an exchange to convert fiat to cryptocurrency and
vice versa. Exchanges range from those you definitely shouldn't trust, such as Binance, through somewhat less sketchy ones such as Kraken (now being
investigated for sanctions busting) to Coinbase, which presents itself as a properly regulated, US based exchange that is totally trustworthy.
But recently cracks have been appearing in their façade of respectability, big enough that even the
New York Times has noticed.
The Humbling of Coinbase by David Yaffe-Bellany and Mike Isaac summarizes the situation:
Coinbase rose to prominence as one of the first major crypto companies, a gateway to the chaotic world of digital assets for amateur investors. But as it has grown from plucky start-up to publicly traded company, its status as an industry leader has been threatened by a series of missteps and a steep decline in the crypto market over the last six months.
Below the fold I probe into some of these cracks.