Coinbase earnings were bad. Worse still, the crypto exchange is now warning that bankruptcy could wipe out user funds
Hidden away in Coinbase Global's disappointing first-quarter earnings report—where the U.S.'s largest cryptocurrency exchange reported a quarterly loss of $430 million and a 19% drop in monthly 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.
An individual's ownership of cryptocurrency is supposed to be immutable and absolute; that's one of the key selling points touted by blockchain evangelists everywhere.
But when a user creates a Coinbase account, they often end up storing their cryptocurrency in a wallet controlled by Coinbase, which means the individual is giving
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