Crypto Investors Might Lose Everything?
We have talked at length on the radio show about the unforeseen risks that go along with cryptocurrencies.
One of the main concerns is the day that regulators start enforcing new security laws for cryptocurrencies. Will Crypto be as enticing once those regulations are passed? That is to be determined. That we can sort of see coming.
One of the Public relations firms sent this to me today – I think that this represents the type of risk that you don’t see coming. Coinbase is an app that lets you buy and sell cryptocurrencies.
Buried in Coinbase's first-quarter earnings report, where the largest crypto exchange reported a 19% drop in monthly users and a $430M quarterly loss, is an update on the risks to the millions of Coinbase users. If Coinbase goes bankrupt, users might lose all the crypto in their accounts. Coinbase stated 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.
I don’t know if this is true or not – however, it serves as a good example of what could happen when speculating with cyber-currency – expect the unexpected.