Coinbase warns users could lose their crypto holdings if the company goes bankrupt
Coinbase, one of the world large cryptocurrency exchanges,
warned that its users might lose access to their holding if the company ever went bankrupt.
The disclosure was included for the first time as a risk factor in the company's
first-quarter earnings report, which also noted that Coinbase holds $256 billion in fiat currencies and virtual coins.
custodially held crypto assets may be considered to be the property of a bankrupt estate, in the event of a bankrupt,
the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings and such customers
could be treated as our general unsecured creditors," the company said.
That implies client would lose admittance to their equilibriums since it would turn into Coinbase's property.
Following the earnings report, which sent the company's stock plummeting more than 23%, Coinbase CEO Brian Armstrong said there's no risk of bankruptcy right now.
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