Coinbase, one of the world's largest cryptocurrency exchanges, warned that its users might lose access to their holdings if the company ever went bankrupt.
The disclosure was included for the first time as a risk factor in the company's first-quarter earnings report, which also noted that Coinbase holds $256 billion in fiat currencies and virtual coins.
"Because custodially held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings and such customers could be treated as our general unsecured creditors," the company said.
That means users would lose access to their balances since it would become Coinbase's property.
https://www.businessinsider.com/coinbase-warning-users-could-lose-crypto-bankruptcy-earnings-2022-5
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