What does the new business language of Coinbase say
Coinbase, the biggest platform for cryptocurrency exchange and purchase of blockchain tokens has revealed the new Business Language including the clause about the possibility of bankruptcy and what shall the company do in such a case.
“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”.
This clause has caused the customers to fear and doubt the safety of keeping their currency on the platform, until the clause in matter was further explained.
What does that mean for Coinbase crypto asset holders
Although, one may think that in case of the bankruptcy customers’ crypto assets are subject to bankruptcy proceedings as custody of the platform, the Coinbase’s CEO, Brian Armstrong, has denied any need for concerns explaining that it is only a matter of the new Business Language.
The platform co-founder also adds his belief that customers’ assets are subject to significant legal protection, hence would not be subject to bankruptcy proceedings in such unlikely situation.
On contrary, according to a boutique law firm Freeman Law, in the case of a bankruptcy, the debtor is obligated to disclose all property, no matter its value, however, the same might be difficult to obtain as the “private key” holder is, in fact, the owner and controller of the existing cryptocurrency in their digital wallet.
Finally, it is believed that in future, state law will define a different approach that shall treat the customers’ assets separately from the debtor’s bankruptcy schedule.
#coinbase #crypto #cryptonews #cryptobankruptcy