CEO of Bitcoin Exchange, Coinbase, Clears Way for Bankruptcy » Crypto Insiders

The CEO of US cryptocurrency exchange Coinbase, Brian Armstrong, explained a number of important things on Twitter today. as a result of modern documents Between Coinbase and Securities Trading Commission (SEC), Coinbase clients appear to be at risk of losing their crypto assets to the exchange in the event of bankruptcy. According to Armstrong, customers don’t have to worry about it.

Coinbase Exchange Bankruptcy

“In the event of bankruptcy, crypto assets held by the exchange can be considered property of the bankruptcy proceedings, and clients can be treated as unsecured creditors in general. The unsecured creditor will be among the last payable creditors in the event of bankruptcy and the last on the list of claims,” the document said. .

With many clients Queen Piece This of course went the wrong way. So the crypto community has reacted intensely to the exchange. Coinbase has been inundated with angry messages on Twitter, among other things.

According to Armstrong, this fearsome language from Coinbase in the documentation was only necessary to meet the SEC’s stringent requirements. Additionally, Armstrong notes that at this time there is no reason to believe that Coinbase will take off anytime soon. Armstrong also stated that users’ crypto assets on Coinbase are completely safe.

2/ We have no risk of bankruptcy, however we have included a new risk factor based on an SEC requirement called SAB 121, a newly required disclosure for public companies that hold crypto assets to third parties. https://t.co/lwmgb1kFtA

– Brian Armstrong – barmstrong.eth (@brian_armstrong) May 11 2022

Armstrong apologizes

Armstrong admits that in the event of bankruptcy, a judge can rule that users’ crypto assets stored on the platform can already be considered part of the company. In fact, it cannot be confirmed with absolute certainty that users’ cryptocurrencies are safe, should Coinbase go down.

In addition, Armstrong apologized for the potential panic the SEC document might cause. He acknowledges that as the CEO of the exchange, he should have provided clarification on this matter earlier.

6/ We should have updated our Retail Terms sooner, and we have not communicated proactively when this risk disclosure statement was added. My deepest apologies, and a good learning moment for us as we make future changes.

– Brian Armstrong – barmstrong.eth (@brian_armstrong) May 11 2022

An important rule of coding is:Not your keys, not your coins.” If you really want to make sure that your crypto is secure at all times, store it in your own wallet where you can keep your cryptocurrency Spread a key Own it yourself.