- Ref:: Hacker News
- Title:: Coinbase's 10-Q update: users' crypto asset could be subject to bankruptcy claim
- Author:: Nick Winkler
- Year of publication:: 2022
- Category:: News
- Topic:: #topic.cryptoasset
Notes from reading
In all cases, end users are wholly liable to whomever (Coinbase, Binance, Kraken, ...) holds the private keys to the wallet that holds the tokens.
It's about Coinbase declaring bankruptcy, and users' wallets being used to pay Coinbase's debts. Specifically, it says "unsecured creditors" who get paid after debts to secured creditors. The "credit" is the contents of their wallets. 1
This practice from Coinbase is not transparent for their end users. Since this change is added in their 10-Q only, without any public announcement.
Let's see what happen in traditional finance. If Charles Schwab goes under, I still own the shares I bought through them though. 2