Coinbase, one of the world's major cryptocurrency exchanges, has handed the US CVM a 142-page paper.
The keenest eye has observed a major shift in business policy in this report, known as Form 10-Q.
The money of its consumers are affected by such a shift. If Coinbase files for bankruptcy, the cash will no longer belong to its clients (the real owners of these assets). To put it another way, they claim that "your money is not yours."
This change in conditions could drive customers away and add to the company's continuous downfall, with its shares down 80% since its IPO in April 2021. Who will have the fortitude to leave their money there, after all?
Controlling one's money is one of the most popular phrases among Bitcoin users. Not your keys, not your coins — the keys aren't yours, the coins aren't yours — is a reminder not to hold balance on exchanges; after all, all you have is a promise to be paid in this scenario.
The recent policy changes at Coinbase have made matters worse. After all, given Mt. Gox's eight-year battle to reclaim part of its cash, Coinbase may not stand a chance if the worst happens.
Coinbase's view on how it will handle customer cash if the firm declares bankruptcy can be seen in a paper sent to the US Securities and Exchange Commission (CVM — or SEC).
While exchanges make it simple to buy and sell cryptocurrency, they are just for that purpose. That is, unless you are a skilled trader who has to leave your coins on an exchange, you should always withdraw your coins.
Coinbase's founder argues that the company is not in danger of going bankrupt, claiming that this would be a "black swan" event. However, history reveals that exchange hacks are prevalent, and only a few have been able to manage the resulting losses without going bankrupt.
Finally, with or without this provision, it is usually recommended to retain your funds on exchanges for as little period as possible. After all, you won't have control over your money until you have it, and