After confidence in the major cryptocurrency exchange Coinbase has plummeted recently, chief legal officer Paul Grewal is now confirming that investor funds are safe on the trading platform.
In May it was from the documents of the US Securities and Exchange Commission SEC appeared, that users’ crypto assets stored on Coinbase “may be considered as part of bankruptcy ownership in the event of bankruptcy proceedings.” Cryptocurrency exchange clients will automatically become “uninsured creditors.”
This information received special attention after Coinbase reported losses of $430 million in the first quarter of 2022 and a 27% year-over-year decline in revenue. In addition, the value of Coinbase’s bonds dropped significantly at the same time.
All of these developments were quickly left on social media Rumors About the possible bankruptcy of a US cryptocurrency exchange, which is why CLO Grewal felt compelled to do so yesterday. to clarifyThat investors’ money would be safe anyway.
As Grewal says, the trading platform has also changed its terms and conditions for private investors so that they have the same protections in the event of bankruptcy as institutional investors.
At the same time, the chief legal officer reiterates that the crypto company does not handle users’ funds in any way unless they give their explicit consent. This includes both crypto-asset lending for lending or any other commercial activities undertaken by traditional banks.
There was never a serious question Tweet embed Safe. We have over $6 billion in the bank, are financially strong, and have legal and operational protections for clients to invest, access, and withdraw their cryptocurrency.
– paulgrewal.eth (@iampaulgrewal) June 1, 2022
In addition to Writes Grewal tweeted that the cryptocurrency exchange is “financially strong” with more than $6 billion in assets, so the alleged bankruptcy is just “panic.”
Co-founder and CEO Brian Armstrong had previously commented on the speculation. The CEO also emphasized that there is “no risk of bankruptcy” for Coinbase and that the wording in question is just a standard requirement of the SEC. In any case, users will be legally protected.