Coinbase was days from collapse: Armstrong & Litecoin’s Lee tell all

In its infancy, Coinbase faced severe risks, as it relied solely on a hot wallet for all customer funds without any cold storage. This critical flaw put the company’s viability at stake, especially as user deposits surged.

Brian Armstrong quickly sought expertise from crypto-security professionals to secure customer assets. Under immense pressure, he and Charlie Lee created a cold storage solution within weeks, ensuring Coinbase could withstand growing security threats.

Armstrong emphasized the significance of creativity and top talent during challenging times. Reflecting on this experience, Lee acknowledged his regret over choosing salary over equity, illustrating the potential consequences of early decisions in startups.