The CEO of US crypto exchange Coinbase, Brian Armstrong, clarified a number of important matters on Twitter today. As a result of recent documentation between Coinbase and the Securities & Exchange Commission (SEC) Coinbase customers would apparently be at risk of losing their crypto assets on the exchange in the event of bankruptcy. According to Armstrong, however, customers have nothing to worry about.

Coinbase exchange bankruptcy

“In the event of bankruptcy, crypto assets held by the exchange can be considered property of the bankruptcy proceeding, and customers can be treated as general unsecured creditors. An unsecured creditor would be one of the last to be paid in bankruptcy and the last in line for claims,” ​​the document said.

With many customers of Coinbase this of course went down the wrong way. The reaction from the crypto community to the exchange was therefore intense. Coinbase was inundated with angry messages on Twitter, among other things.

According to Armstrong, Coinbase’s frightening language in the documentation was only necessary to meet the SEC’s tough demands. In addition, Armstrong indicates that at this time there is no reason to believe that Coinbase will go under anytime soon. Armstrong also states that users’ crypto assets on Coinbase are completely safe.

Armstrong apologizes

Armstrong does admit that in the event of bankruptcy, a judge can rule that the crypto assets of users stored on the platform can indeed be seen as part of the company. In fact, it cannot be stated with complete certainty that users’ cryptocurrencies are safe, should Coinbase go under.

In addition, Armstrong apologized for the possible panic that the SEC document may have caused. He acknowledges that as the exchange’s CEO, he should have provided clarification on the matter earlier.

An important rule of thumb in crypto is: “Not your keys, not your coins.” If you really want to be sure that your crypto is safe at all times, store it on your own wallet where you can keep the crypto private key own it yourself.

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