The chief legal officer of leading US-based crypto exchange Coinbase is reassuring investors their funds are safe on the platform despite stagnation within the crypto markets.
In a new company blog post, CLO Paul Grewal dispels fears users may have of losing the crypto assets they keep stored on Coinbase if the platform were to ever go bankrupt due to the price volatility of digital assets.
“A couple of weeks ago, a newly required SEC [U.S. Securities and Exchange Commission] disclosure we made in our 10Q [quarterly report] created some noise about how Coinbase holds crypto assets and what could happen in the highly unlikely event of the company’s insolvency. This led to some genuine concern among people who hold crypto assets on Coinbase.
Even though customer assets have always been protected, we know this was scary – especially in a down market.”
According to Grewal, a user’s crypto assets would never be mixed up or confused with Coinbase’s corporate holdings, nor would the crypto exchange ever lend out a user’s funds like traditional banks would unless specifically instructed.
“Many banks and financial institutions use customer funds for commercial purposes including lending and trading, meaning that they often hold only a fraction of their customer assets at any given time. Coinbase always holds customer assets 1:1. This means that funds are available to our customers 24 hours a day, seven days a week, 365 days of the year.”
Grewal goes on to note that Coinbase is doing better now than it was a year ago.
“Nothing about Coinbase has changed. If anything, we’re in an even stronger position than we were a few months, or a year ago – and we’ll keep working to be the simplest, most trusted way for people to get involved in crypto.”
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Source: https://dailyhodl.com/2022/06/03/coinbase-executive-reassures-traders-that-user-funds-are-safe-despite-crypto-bear-market/