Status: Not Logged In; Sign In

National News
See other National News Articles

Title: Coinbase earnings were bad. Worse still, the crypto exchange is now warning that bankruptcy could wipe out user funds
Source: [None]
URL Source: ... fe-private-key-earnings-stock/
Published: May 11, 2022
Author: Staff
Post Date: 2022-05-11 15:29:52 by Horse
Keywords: None
Views: 29
Comments: 1

Hidden away in Coinbase Global’s disappointing first-quarter earnings report—in which the U.S.'s largest cryptocurrency exchange reported a quarterly loss of $430 million and a 19% drop in monthly users—is an update on the risks of using Coinbase’s service that may come as a surprise to its millions of users.

In the event the crypto exchange goes bankrupt, Coinbase says, its users might lose all the cryptocurrency stored in their accounts too.

Coinbase said in its earnings report Tuesday that it holds $256 billion in both fiat currencies and cryptocurrencies on behalf of its customers. Yet the exchange noted that in the event it ever declared bankruptcy, “the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings.” Coinbase users would become “general unsecured creditors,” meaning they have no right to claim any specific property from the exchange in proceedings. Their funds would become inaccessible.

Post Comment   Private Reply   Ignore Thread  

TopPage UpFull ThreadPage DownBottom/Latest

#1. To: Horse (#0)

I'd venture this is due to margin trading wiping out irresponsible traders, and if so, it's the exchanges offering margin trading that is hurting them long term. Flash crashes happen because of margin trading and it wipes people out and discourages the trade.

Pinguinite  posted on  2022-05-11   18:07:29 ET  Reply   Trace   Private Reply  

TopPage UpFull ThreadPage DownBottom/Latest