Image default

Coinbase CEO Brian Armstrong Says Disclosure Does Not Indicate Bankruptcy Risk

The chief executive of Coinbase said a disclosure in its latest quarterly filing did not indicate the cryptocurrency exchange operator faced a bankruptcy risk and it had been made to meet a US Securities and Exchange Commission (SEC) requirement.

Brian Armstrong made his comments after Coinbase said on Tuesday that, in the event of bankruptcy, crypto assets held by the exchange could be considered property of the bankruptcy proceedings and customers could be treated as general unsecured creditors.

An unsecured creditor would be one of the last to be paid in any bankruptcy and last in line for claims.

Coinbase, whose shares plunged 15 percent in extended trade on Tuesday, also missed estimates for first-quarter revenue and posted a loss as turmoil in global markets curbed investor appetite for higher risk assets including cryptocurrencies.

Coinbase, the largest US cryptocurrency exchange, said its disclosure might lead customers to believe that keeping their coins on the platform would be considered “more risky”, which would in turn materially impact its financial position.

“We have no risk of bankruptcy,” Armstrong wrote on Twitter after the disclosure, which he said was made to meet SEC requirements.

He said it was unlikely that “a court would decide to consider customer assets as part of the company in bankruptcy proceedings”, although he said it was still possible.

He said Coinbase would take further steps to ensure it offered protection for its retail customers.

“We should have updated our retail terms sooner, and we didn’t communicate proactively when this risk disclosure was added,” Armstrong said. “My deepest apologies.”

© Thomson Reuters 2022

Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.

Affiliate links may be automatically generated – see our ethics statement for details.

Source link

Related posts

TRON DAO to buy $1B in USDT to “safeguard” the crypto market

Elaine Watlington

MATIC Price Prediction: Polygon Near Key Juncture, Can Bulls Save This Support?

Elaine Watlington

Janice McAfee Continues Battle for Release of John McAfee’s Remains, 670 Days After His Death – Bitcoin News

Elaine Watlington

Cardano approaches critical resistance level of $0.42: Bulls to witness more gains?

Elaine Watlington

Bitcoin Price Uptrend Loses Steam, But Dips Turn Attractive In Near-Term

Elaine Watlington

The Sandbox co-founder explains how the metaverse has evolved for brands: Web Summit 2022

Elaine Watlington

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More