GeniusMusing (geniusmusing@nu.federati.net)'s status on Wednesday, 11-May-2022 18:55:48 UTC
-
GeniusMusing (geniusmusing@nu.federati.net)'s status on Wednesday, 11-May-2022 18:55:48 UTC GeniusMusing WHAT!!!
Coinbase Works to Calm Users Fears of Crypto Bankruptcy
https://gizmodo.com/coinbase-bankruptcy-crypto-exchange-volatile-market-1848911005
>If you’re used to riding the cyrpo rollercoaster, then you know the admission to ride comes with the promise of both ups and downs.
>
>But this news maybe caught you off guard. Some investors in Coinbase are rightfully spooked by language discovered in a 10-Q form the company filed with the U.S. Securities and Exchange Commission. Page 83 of the 135 page filing says: “Moreover, 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.”
>
>An unsecured creditor is one who lends money without obtaining collateral of similar value—a common example of an unsecured creditor is a credit card company. In the case of Coinbase, the users would be the unsecured creditors. Fortune is reporting that if Coinbase goes bankrupt, then users with funds tied up with the company will no longer have access to them, which fundamentally undermines the entire point of cryptocurrency.