Replay attack caused Coinbase to give away ETC worth of ETH. The CEO said they have enough money to cover all user deposits.

Since the discovery of a bug on Coinbase that allowed users to buy ETH and receive 'free' ETC, there have been many concerns about Coinbase's solvency. Many believe that the company did not take precautions to protect itself from replay attacks. But in a recent company statement, CEO Brian Armstrong confirmed that the company has more than enough funds to cover user deposits in every currency.

Coinbase says everything is fine now

Over the past few days, there has been some scattered evidence of potential solvency issues at Coinbase. The popular exchange platform has been distributing pre-hard fork Ethereum cryptocurrency to buyers, which is equivalent to Ethereum Classic (ETC). Some believe this is a bug that will drain Coinbase's funds, but these claims may be exaggerated.

The Ethereum replay attack vector has proven to be a serious concern for various exchanges. Funds in cold storage prior to the Ethereum hard fork are technically the property of the user. However, since the advent of ETC, the question has arisen as to whether these coins are ETC or ETH.

The discussion has intensified as Coinbase has shown no intention to officially support ETC. People who buy ETH on Coinbase today usually get a similar amount of ETC once they send their ETH purchases to a different exchange. The more serious question, however, is what happens to the ETC for those who store ETH in Coinbase wallets.

Coinbase funds cover all user funds. If you prefer to keep your own private keys, check out our multi-signature vault https://t.co/Dt1EdiohpG — Brian Armstrong (@brian_armstrong) August 1, 2016

On the surface, all of the concerns are unfounded, or that’s what Coinbase CEO is trying to tell everyone, as he tweeted that ‘the company’s funds are able to cover all user funds.’ Although this doesn’t completely solve the ETC problem, it’s good news to hear that the company’s solvency is not in question.

Additionally, users who purchased ETH through Coinbase and withdrew it to a different exchange can no longer get ETC. Now people are speculating whether this is because Coinbase fixed the vulnerability or other exchanges implemented better prevention measures. However, it seems that the problems have been solved for now.