The US’ largest cryptocurrency exchange Coinbase reported a quarterly loss of $430 million and a 19% drop in monthly users. The quarterly report also noted that in the event the crypto exchange goes bankrupt, its users might lose all the cryptocurrency stored in their accounts.
Coinbase said in its Q1 2022 earnings report that it holds $256 billion in both fiat currencies and cryptocurrencies on behalf of its customers. Yet the exchange noted that in the event it ever declared bankruptcy, “the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings.”
Coinbase users would become “general unsecured creditors,” meaning they have no right to claim any specific property from the exchange in proceedings. Their funds would become inaccessible.