Coinbase missed its profit targets and its stock fell by almost a quarter of its value. Its CEO, Brian Armstrong, has said that the company is far from being considered a bankruptcy risk and ensures that the funds are safe, but, at the same time, it has also said that due to the regulation in which they operate, if one day a bankruptcy event were to occur, the users their access to their accounts would be lost and automatically the funds would become part of the company so that it meets its obligations.
That is not a decision of the company, but it is obliged that the funds they withhold be used to cover their debts in case of bankruptcy.
An issue pending regulation
As it explains Business Insiderthat is not the model that occurs when a bank declares bankruptcy since the regulation protects up to a certain limit of amounts for its users, similar to what happens in Mexico with the IPAB. Although Coinbase says that there is no risk at the moment for investors, it does bring to the table one of the unavoidable issues when it comes to regulation. exchanges and user protection, one pending in our country.
Armstrong also said that he hopes that the terms and conditions of Coinbase will be modified soon so that, in a possible bankruptcy case, the funds can be safeguarded and not taken to meet the company’s obligations. Since at the moment no protection is provided in its terms and conditions, the CEO apologized to users via Twitter.
Armstrong concluded by saying that Coinbase’s ultimate goal is to offer the best crypto custody solutions.
The fall in the value of Coinbase shares coincides with a general decline in the stock market and specifically in the technology sector. Cryptocurrencies have been dragged along with the downtrend and bitcoin has reached its $30,000 barrier, one not seen for almost a year. LUNA and TerraUST have also seen major crashes of over 90% and 50% respectively. Simultaneously with these movements, Nubank has declared that it will allow buying bitcoin and ethereum in Brazil directly in its app.