Coinbase: Customers May Lose Their Crypto in Bankruptcy, Panic Sets

As the Bitcoin price dropped below $30,000, a first in almost a year, Coinbase also finds itself in turmoil. The American platform specializing in cryptocurrencies has just released its financial results for the 1st quarter of 2022.

It’s not party time with net income fell from $1.6 billion to $1.17 billion same time last year. The same observation for the total transaction volume, which fell to 309 billion versus 335 billion. Not surprisingly, monthly active users also fell from 11.4 million to 9.2 million.

As expected, the company justifies these weak numbers as follows: drop in price of many cryptocurrencies Since the beginning of the year, Bitcoin and Ethereum are in the lead. “These market conditions had a direct impact on our first quarter results. But we have approached these market conditions with foresight and preparation, and we are more excited than ever about the future of cryptocurrencies.” he explained.

Also Read: NFT Market Crashes Due To Bitcoin But It’s Temporary

User cryptos seized in case of bankruptcy

He also states that it’s just a bad pass. It’s inherent in the cryptocurrency market and its price fluctuation. However, it wasn’t Coinbase’s sluggish performance that caused the customer panic. Indeed, the platform recently submitted a quarterly report to the American stock market police SEC. In this document, users’ cryptocurrencies held by Coinbase are described as “may be treated as assets subject to bankruptcy proceedings and customers may be treated as general unsecured creditors”.

In other words, creditors may view customer assets stored by Coinbase as company property. In the event of bankruptcy, these cryptocurrencies can therefore be confiscated. pay back business debts. Coinbase CEO Brian Armstrong said to put out the resulting fire: the platform was not at risk of bankruptcy. Yet he did not deny it, on the contrary:Although unlikely, it is possible for a court to decide to treat client assets as part of the business in a bankruptcy case. That’s what’s been said.

Source : BFM

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