Coinbase CEO: All Funds Are Safe

The cryptocurrency exchange Coinbase has also suffered from the declining crypto markets. The company has suffered significant losses, prompting now to suggest that users will not be protected in a bankruptcy case. However, Coinbase CEO Brian Armstrong now says that all funds are safe, as they have always been.

Big Loss at Coinbase

Coinbase recently reported its quarterly report with a loss of a whopping $430 million. In addition, the number of users who transact on the popular American crypto exchange is said to have fallen from approximately 11.4 million users to approximately 9.2 million users.

In fact almost immediately after this loss became known, users on Twitter were concerned about bankruptcy protection. The following was quoted here from the Coinbase rules:

“In the event of bankruptcy, the crypto assets that we hold on behalf of our clients may be subject to bankruptcy proceedings.”

Unsecured creditors

In addition, the disclosure stated that the users will be treated as “unsecured creditors” when this happens. This has led to speculation that if Coinbase goes out of business, the coins they contain will be company property.

However, Armstrong assured users that the company has no risk of bankruptcy and that customers’ money is safe. However, he said that if the company goes bankrupt, there is an “unlikely” possibility that a court would rule to consider consumer assets part of the company in the proceedings “even if it harms customers”.

Armstrong also explained that their prime and custody customers enjoy strong legal protections within the terms of service. In addition, these terms protect the assets even in the event of bankruptcy. Finally, he noted that their team is working on updating their terms to extend the same protections to retail users.

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