Coinbase Faces Bankruptcy Threat, It Could Wipe Out Users Fund

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-Coinbase has delivered its 1st quarterly results
-The U.S.’s biggest crypto exchange has recorded a quarterly loss of $430 million, with a 19 percent reduction in monthly users
-Coinbase warned that the digital currencies it holds in custody on behalf of customers might be subject to bankruptcy if Coinbase itself ever goes bankrupt
-In the event of Coinbase bankruptcy, users would be considered “general unsecured creditors,” with no right to demand any specific property from the exchange in court proceedings
-One of the primary selling points emphasized by blockchain advocates is that an individual’s bitcoin ownership is unchangeable and absolute; however, when users register a Coinbase account, they put their crypto in a Coinbase-controlled wallet, relinquishing some control over their cash
-Coinbase CEO and founding member Brian Armstrong said on Twitter that Coinbase is not in danger of going bankrupt
-Coinbase offers a self-custody wallet called Coinbase Wallet, in which customers know their private keys; however, trading crypto on Coinbase does not require a Coinbase Walletor any other crypto wallet
-After the crypto exchange revealed its earnings, Coinbase shares plunged 15.6 percent in after-hours trading, bringing the company price to 80 percent below its Nasdaq launch in April 2021

 

 

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