Coinbase CEO Blames SEC Memo For Bankruptcy Risk Alarm

By Elise Hansen (May 11, 2022, 9:07 PM EDT) -- Coinbase has updated its risk disclosures to reflect new U.S. Securities and Exchange Commission guidance about holding cryptocurrencies, CEO Brian Armstrong said as he sought to calm customers' nerves about what would happen to their holdings in the event of a bankruptcy.

Coinbase Global Inc.'s quarterly report issued Tuesday included new risk factors explaining what could happen to certain users' holdings if the company were to go bankrupt. According to the filing, "custodially held" digital assets could be considered property of a bankruptcy estate and those Coinbase customers who use this service could find themselves treated as general unsecured creditors, putting them...

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