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What? Your Assets at Coinbase are Not Safe?
The coming crypto crash may take down more than the tokens, but this is actually good for the blockchain
Retail crypto investors, already reeling from recent losses, were additionally shocked this week to learn that should Coinbase or one of the other exchanges go bankrupt, the assets in their accounts may not be safe. In a worst-case scenario, investors who keep their tokens at Coinbase would have to line up with all the other creditors to get whatever portion of their investments is left.
The company insists they only made this disclosure because of a new SEC regulation: “we included a new risk factor based on an SEC requirement called SAB 121, which is a newly required disclosure for public companies that hold crypto assets for third parties” CEO Brian Armstrong tweeted. He assured people that only a “black swan” event could even trigger such conversations, but he admits that bankruptcy courts could decide to treat its customers’ crypto investments as part of the company’ assets.
With Coinbase stock down 71% on the year, however, and black swan events occurring on what feels like a weekly basis at this point, that’s not so reassuring. Not when crypto is supposed to be a safe haven, like gold, in addition to being an insanely hot sector for…
