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Can you lose your Coinbase cryptocurrencies if the crisis drags on for too long?

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Coinbase, one of the largest cryptocurrency exchanges, released its first quarter earnings report on Tuesday and included a new clause for its customers that completely changes the current paradigm.

This suggests that clients’ cryptocurrencies could be at risk if the exchange goes bust. However, the company’s CEO tried to reassure customers that “there is no risk of bankruptcy.” But, seeing their forecasts, one cannot say that they are too successful.

Your funds are safe on Coinbase, as alwaysCoinbase co-founder and CEO Brian Armstrong wrote about this on Wednesday.We do not have bankruptcy risk, however we are including a new risk factor based on the SEC requirement called SAB 121.“.

The U.S. Securities and Exchange Commission issued Personnel Accounting Bulletin No. 121 (SAB 121) on March 31, which addresses disclosures about possible risks associated with providing a platform for cryptocurrency transactions should be made to better inform clients about your investment decisions.

A new disclosure of risk factors published by Business Insider states that:

Since crypto assets held in escrow may be considered the property of the bankruptcy estate, in the event of bankruptcy, crypto assets that we hold in escrow on behalf of our clients may be subject to bankruptcy proceedings, and such clients may be considered our creditors.“.

This may mean, if we translate this into simpler language, that in the event of bankruptcy proceedings, customer balances may be considered the property of Coinbaseas explained in Business Insider.

Armstrong tweeted that Coinbase has its own crypto wallet for those who prefer to store their crypto rather than leaving it on an exchange. Cryptocurrency traders fearful of losing their assets can also purchase personal cryptocurrency insurance.

All these movements mean that Coinbase has its back in case the company goes bustunfortunately for all its clients and investors.

Source: Computer Hoy

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I am Bret Jackson, a professional journalist and author for Gadget Onus, where I specialize in writing about the gaming industry. With over 6 years of experience in my field, I have built up an extensive portfolio that ranges from reviews to interviews with top figures within the industry. My work has been featured on various news sites, providing readers with insightful analysis regarding the current state of gaming culture.

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