Coinbase spooked customers with an admission that their crypto holdings could be at risk if the company goes bankrupt – a warning that surfaced alon

Coinbase warns customers they may lose crypto if company goes bankrupt

submited by
Style Pass
2022-09-23 03:00:49

Coinbase spooked customers with an admission that their crypto holdings could be at risk if the company goes bankrupt – a warning that surfaced alongside a dismal earnings report that crushed the cryptocurrency hub’s stock on Wednesday.

Shares plunged more than 27% Wednesday after Coinbase detailed the risk for the first time in an SEC filing – prompting a panicked response that led the company’s boss to address the situation on Twitter.

“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 filing said.

As “unsecured creditors,” Coinbase customers would be left without recourse to recover their cryptocurrency or equivalent cash balances if the company went bankrupt.

Leave a Comment