Is Coinbase Safe for Your Cryptocurrency? Retail investors, according to the CEO, are at Risk

　　Coinbase CEO Brian Armstrong stated on Wednesday that retail consumers may not be able to reclaim their assets if the exchange goes bankrupt.

　　Armstrong also stated that the company had not informed its consumers about the risk until it was identified in a filing on Tuesday.

　　Armstrong's remarks follow a previous announcement in which it was indicated that if Coinbase went bankrupt, it might regard its users as “unsecured creditors.”

　　The news generated significant uproar on social media, fueling an increase in calls to remove cryptocurrency from the exchange.

　　Armstrong claims there is no possibility of bankruptcy.

　　In a series of tweets on Wednesday, Armstrong conceded that Coinbase's terms of service had not been appropriately updated to reflect the possible danger to regular traders.

　　He stated that the new statement of potential risk was required by the Securities and Exchange Commission (SEC). However, this had not been revealed to retail holders, who make up the vast majority of the exchange's user base.

　　However, Armstrong noted that this possible risk only existed in the case of a bankruptcy, which the exchange was not in danger of experiencing. The treatment of a company's holdings after bankruptcy is also primarily determined by a court, which is outside of the firm's authority.

　　It is possible, however unlikely, that a court would decide to consider customer assets as part of the company in bankruptcy proceedings, even if it harmed consumers. -Armstrong

　　However, the Coinbase controversy underlines a recurring complaint of centralized exchanges: a holder does not genuinely control the cryptocurrency stored through a centralized intermediary. Coinbase also provides a decentralized wallet.

　　Coinbase's revenue and volume fell in the first quarter.

　　While the exchange is not in danger of going bankrupt, it is still under pressure from deteriorating market circumstances. Coinbase's first-quarter revenue fell 35%, while trade volumes fell to $309 billion from $547 billion, the company announced on Tuesday. In after-hours trading, the exchange's shares fell more than 13%.

　　The poor results come during one of the greatest crypto market capitulations in a year, which has wiped out roughly $500 billion in market value.

　　The first quarter of 2022 saw bad market conditions as a result of growing inflation and the commencement of the Russia-Ukraine war. COVID-related shutdowns in China and Hong Kong also had a significant impact on economic conditions.

　　As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!

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