Coinbase, the biggest exchange in the United States, has come under intense fire after posting its Q1 2022 performance result, which displayed a net loss of $430 million for the first quarter.
Coinbase (NASDAQ:COIN) Users Could Lose All their Crypto
Following the discolure of the significant losses incurred by Coinbase, Peter Brandt, a legendary trader who has been trading the markets since 1975, has warned that the exchange’s users could lose all their Bitcoin if the exchange were to go bankrupt.
Brandt, who became famous for predicting the 2018 crypto market crash, warned that Coinbase was going bankrupt in March 2021, and the recent revelation of the exchange’s financial situation has brought his projections to the fore.
In addition to reporting a loss of $1.98 per share on sales of $1.165 billion, Coinbase has come under fire by the public for a bankruptcy statement which was included in the report. An excerpt from the report read;
“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.”
Brian Armstrong Defends Coinbase
Reacting to the rebukes, Coinbase CEO Brian Armstrong has come to the defense of the exchange, assuring users, and the crypto space at large, that their funds were as safe as always with the exchange.
According to Armstrong, Coinbase is at no risk of bankruptcy. However, he added that the exchange would update its users’ terms to guarantee client protection at all times, even in the instance of a “black swan event.”
On the Flipside
- Coinbase has cleared the air, dismissing rumours that the exchange would be teaming up with Robinhood (NASDAQ:HOOD), or even engaging in an acquisition.
Why You Should Care
Armstrong has clarified that Coinbase Prime and Custody users have strong legal protections protecting their assets at all costs.