Coinbase warns users could lose their crypto holdings if the company goes bankrupt

[Chevilopuvvu]

• Coinbase said its users' crypto assets could become company property if it went bankrupt.

• The company added the disclosure for the first time in its earnings report Tuesday.

• Its CEO said shortly afterward that users' funds were safe and there was no risk of bankruptcy.

Coinbase, one of the largest cryptocurrency exchanges, said its users might lose access to their holdings if the company ever went bankrupt.

The disclosure was included in the company's first-quarter earnings report, and that was the first time the risk factor was mentioned. It also noted that Coinbase held $256 billion in fiat currencies and virtual coins.

"Because custodially held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, 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 means users would lose access to their balances because they would become Coinbase's property.

It's a different scenario from traditional investments. Many bank accounts, including checking and savings, are insured by the Federal Deposit Insurance Corp. for up to $250,000 per account if the bank goes under, while the Securities Investor Protection Corp. helps if a broker or dealer goes bankrupt.

Crypto enthusiasts have long heralded the decentralized movement as, in part, a way to give people complete control and ownership of their finances. That's only the case for those who physically store their cryptocurrency in personal wallets, as opposed to a platform like Coinbase. (Coinbase does offer a self-custody wallet called Coinbase Wallet.)

This disclosure makes sense in that these legal protections have not been tested in court for crypto assets specifically, and it is possible, however unlikely, that a court would decide to consider customer assets as part of the company in bankruptcy proceedings even if it harmed consumers," Armstrong said.

[LadiesTailor]

8 minutes ago, Chevilopuvvu said:

• Coinbase said its users' crypto assets could become company property if it went bankrupt.

• The company added the disclosure for the first time in its earnings report Tuesday.

• Its CEO said shortly afterward that users' funds were safe and there was no risk of bankruptcy.

Coinbase, one of the largest cryptocurrency exchanges, said its users might lose access to their holdings if the company ever went bankrupt.

The disclosure was included in the company's first-quarter earnings report, and that was the first time the risk factor was mentioned. It also noted that Coinbase held $256 billion in fiat currencies and virtual coins.

"Because custodially held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, 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 means users would lose access to their balances because they would become Coinbase's property.

It's a different scenario from traditional investments. Many bank accounts, including checking and savings, are insured by the Federal Deposit Insurance Corp. for up to $250,000 per account if the bank goes under, while the Securities Investor Protection Corp. helps if a broker or dealer goes bankrupt.

Crypto enthusiasts have long heralded the decentralized movement as, in part, a way to give people complete control and ownership of their finances. That's only the case for those who physically store their cryptocurrency in personal wallets, as opposed to a platform like Coinbase. (Coinbase does offer a self-custody wallet called Coinbase Wallet.)

This disclosure makes sense in that these legal protections have not been tested in court for crypto assets specifically, and it is possible, however unlikely, that a court would decide to consider customer assets as part of the company in bankruptcy proceedings even if it harmed consumers," Armstrong said.

Same news aa stocks thread lo vesa baaa… same timing 

[Chevilopuvvu]

6 minutes ago, LadiesTailor said:

Same news aa stocks thread lo vesa baaa… same timing 

Asalu anni stocks/crypto real estate bekar unnayi. Save seskonudu better emo kaaka.

[Mr Mirchi]

3 minutes ago, Chevilopuvvu said:

Asalu anni stocks/crypto real estate bekar unnayi. Save seskonudu better emo kaaka.

Real estate ki chala time vundhi to go down

[Chevilopuvvu]

15 minutes ago, Mr Mirchi said:

Real estate ki chala time vundhi to go down

Interest ratlu perigi stocks lu padithe adi kuda padtadi. Konetolla taana paisal undalekada..

[Netflixmovieguz]

26 minutes ago, Mr Mirchi said:

Real estate ki chala time vundhi to go down

Annthhe anttavvaa kaka

[Vaampire]

Denamma comedy. Coinbase market cap ~15b..  users assets value could be $150b

[Picheshwar]

2 hours ago, Chevilopuvvu said:

• Coinbase said its users' crypto assets could become company property if it went bankrupt.

• The company added the disclosure for the first time in its earnings report Tuesday.

• Its CEO said shortly afterward that users' funds were safe and there was no risk of bankruptcy.

Coinbase, one of the largest cryptocurrency exchanges, said its users might lose access to their holdings if the company ever went bankrupt.

The disclosure was included in the company's first-quarter earnings report, and that was the first time the risk factor was mentioned. It also noted that Coinbase held $256 billion in fiat currencies and virtual coins.

"Because custodially held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, 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 means users would lose access to their balances because they would become Coinbase's property.

It's a different scenario from traditional investments. Many bank accounts, including checking and savings, are insured by the Federal Deposit Insurance Corp. for up to $250,000 per account if the bank goes under, while the Securities Investor Protection Corp. helps if a broker or dealer goes bankrupt.

Crypto enthusiasts have long heralded the decentralized movement as, in part, a way to give people complete control and ownership of their finances. That's only the case for those who physically store their cryptocurrency in personal wallets, as opposed to a platform like Coinbase. (Coinbase does offer a self-custody wallet called Coinbase Wallet.)

This disclosure makes sense in that these legal protections have not been tested in court for crypto assets specifically, and it is possible, however unlikely, that a court would decide to consider customer assets as part of the company in bankruptcy proceedings even if it harmed consumers," Armstrong said.

[Chevilopuvvu]

6 minutes ago, Vaampire said:

Denamma comedy. Coinbase market cap ~15b..  users assets value could be $150b

350$ share below 50$ paddadi.. fossible antava kaaka

250 billion user money undantundu 

[Chevilopuvvu]

6 minutes ago, Picheshwar said:

Enni paisal mingabettinav kaaka

[Picheshwar]

1 minute ago, Chevilopuvvu said:

Enni paisal mingabettinav kaaka

I no 🪙 base

[hyperbole]

3 minutes ago, Chevilopuvvu said:

350$ share below 50$ paddadi.. fossible antava kaaka

250 billion user money undantundu 

Yes, if everyone or most of them sell their holdings

[Vaampire]

13 minutes ago, Chevilopuvvu said:

350$ share below 50$ paddadi.. fossible antava kaaka

250 billion user money undantundu 

Bankruptcy situation vasthey edo okka company merge chesukuntadi anukunta

[pakeer_saab]

1 hour ago, Chevilopuvvu said:

Interest ratlu perigi stocks lu padithe adi kuda padtadi. Konetolla taana paisal undalekada..

interest rates going is only negative aspect, there are pro's in investing in real assets than investing into stocks and crypto right now

people will be forced into real estate, so it will take time to reflect the downtrend in real estate, homes are safe in high inflation environment like now

[sarfaroshi]

endi ayya idi naayi more than 50K in coinbase evadi abba sommu ani minguthadu....

it wont happen...