Coinbase CEO Blames SEC Memo for Bankruptcy Risk Alarm

By Elise Hansen (May 11, 2022, 9:07 p.m. EDT) — Coinbase has updated its risk disclosures to reflect new guidance from the US Securities and Exchange Commission on holding cryptocurrencies, CEO Brian Armstrong said at the time. that he was trying to calm clients’ nerves about what would happen to their assets in the event of bankruptcy.

Coinbase Global Inc.’s quarterly report released on Tuesday included new risk factors explaining what could happen to some users’ holdings if the company goes bankrupt. According to the filing, digital assets “held in custody” could be considered bankruptcy property and Coinbase customers who use the service could find themselves treated as general unsecured creditors, putting them…

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