Monday, May 16, 2022
Home Crypto News Exchanges Peter Brandt Warns Coinbase Users 'Your Bitcoin No Longer Belongs To You"...

Peter Brandt Warns Coinbase Users ‘Your Bitcoin No Longer Belongs To You” If Exchange Goes Bankrupt, Brian Armstrong Reacts

- Advertisement -
Follow-Us-On-Google-News

Coinbase Q1 2022 $430 Million Net Loss and Disclosure Cause Panic as Exchange Founder Clears the Air.



Coinbase has come under heavy attack for its recently published Q1 2022 financial report as the exchange moves swiftly to dismiss users’ fears.  

Popular cryptocurrency exchange Coinbase, which recently disclosed its first quarter 2022 financial report, has come under heavy scrutiny from the crypto community. 

Coinbase Q1 2022 Report

Recall that late yesterday, Coinbase published the financial report for the first quarter of 2022, which saw the San Francisco-based exchange record its first net loss of $430 million since the company went public in April 2021. 

The report showed that Coinbase recorded a 27% net loss from the $1.6 billion recorded in Q1 2021 to $1.17 billion in this year’s first quarter earnings. 

Similarly, Coinbase monthly transacting users also dropped to a low of 19% from last quarter’s 11.4 million to 9.2 million users.

As expected, the report did not go down well with Coinbase investors, which saw the company’s stock value dip 16% to $61 from yesterday’s high of $73, moments after the earnings call was made. 

Crypto Community Slams Coinbase

The negative performance of the general cryptocurrency market since the beginning of the year has contributed majorly to Coinbase’s recent net loss; however, critics still took out time to slam the exchange following its net loss. 

Coinbase’s 27% first quarter net loss was not the only thing that caught the interest of many as an excerpt in the financial report seemed to have triggered the cryptocurrency community. 

According to the disclosure made by Coinbase in the Q1 2022 financial report, the exchange noted that if it goes bankrupt following its losses, it would hold customers’ assets as its property and consider them as general unsecured creditors. 

“In the event of a bankruptcy, the crypto assets we hold in custody on behalf of our clients could be subject to bankruptcy proceedings. Such customers would be treated as our general unsecured creditors,” an excerpt from the financial report read.  

One of the critics who took out time to condemn the exchange is none other than Peter Brandt, a veteran futures trader who has constantly weighed in on crypto-related topics, especially the prices of different assets. 

Brandt called the attention of Coinbase’s customers to the report circulating on the popular microblogging platform Twitter, asking them to close their accounts on the exchange and “flee.”  He argued that if Coinbase goes Bankrupt users’ bitcoin will no longer belong to them.

Coinbase Founder Defends the Exchange’s Disclosure

Meanwhile, Coinbase CEO Brian Armstrong has come to the defense of the exchange and cleared the air about how the San Francisco-based trading platform holds users’ crypto assets. 

Armstrong assured the public that their funds are safe as always, adding that the popular trading platform has no bankruptcy risk. 

The Coinbase CEO added that the disclosure, which has raised eyebrows, is in relation to a recent SEC requirement dubbed SAB 121 that required the disclosure of public companies that hold crypto assets on behalf of third parties.  

We believe our Prime and Custody customers have strong legal protections in their terms of service that protect their assets, even in a black swan event like this,” Armstrong said. 

Notably, the exchange will update its users’ terms so that it will guarantee clients of their protection at all times, even in a “black swan event.” 

He noted that the disclosure is important because legal protections for crypto assets have not been tested in court, adding that there is a possibility that a court may decide to consider clients’ assets as part of a firm in bankruptcy proceedings regardless of whether customers are harmed. 

 

- Advertisement -

Disclaimer

The content is for informational purposes only and may include the author’s personal opinion, and does not necessarily reflect the opinion of TheCryptoBasic. All Financial investments, including crypto, carry significant risk, so always do your complete research before investing. Never invest money you cannot afford to lose; the author or the publication does not hold any responsibility for your financial loss or gains.

Mark Brennanhttps://thecryptobasic.com/
Mark Brennan has been active in the cryptocurrency sector since 2014. His love and passion for the nascent industry drove him to develop interest in writing about important developments and updates about cryptocurrencies and blockchain. Brennan, who holds a Masters degree in Business Administration, learned about the potential of blockchain technology. Aside from crypto journalism, Brennan runs an education center, where he educates people about the asset class.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -

Recent News & Articles

Top Hedge Fund Manager Who Warned Investors, Says Terra’s Project Was Destined to Fail Due To High Yield

The hedge fund manager said Terra failed because the system was designed to enrich investors and the team. ...

SHIB Army Burns 449.98 Million Shiba Inu In 24 Hours, 2.17 Billion In A Week

2.17 Billion Shiba Inu (SHIB) Burnt within the Last 7 Days and 449.98 Million During Last 24 Hours. ...

Ethereum Founder Vitalik Buterin “Strongly Agrees” With Terra’s Plan to Compensate Small TerraUSD (UST) Investors Over Rich Ones 

The Ethereum creator believes that a plan to focus more on compensating small investors is a good hybrid formula. ...

Ethereum Founder Sends 500 ETH To Dogecoin Foundation

Ethereum Founder Sends 500 ETH To Dogecoin Foundation. It’s not always that Vitalik Buterin sends funds to support other crypto projects. However, he appears to...

Binance CEO Says Buy Back Or Burn Terra (LUNA) To Create Value, Confirms Exchange Doesn’t Hold UST

Binance CEO Says The Exchange Doesn’t Hold Any UST and Terra team should Burn LUNA to help price recover. ...

Top DeFi Coins Ready to Explode: Chainlink (LINK), Fantom (FTM), and Logarithmic Finance (LOG)

DeFi is rapidly surpassing conventional banking as an innovative application, and the expansion in the future years will be unparalleled. From pioneering borderless payment to...

Can Calyx Token (CLX) Empower the DeFi Space as Tron (TRX) Empowers the DApps Community?

DeFi tokens are taking over the market in the world of digital currencies due to their ability to be swapped or traded for other...

Subscribe To Our Newsletter

Get Updated with All The latest Crypto News, Articles, Reviews, Analysis and much more. Delivered Every Monday.