VSoinbase missed its profit targets and its shares fell by almost a quarter of their value. Its CEO, Brian Armstrong, said the company is far from being considered a risk of bankruptcy and ensures that the funds are safe, but, at par.
He also pointed out that due to the regulations they operate under, if a bankruptcy event were to occur one day, users would lose access to their accounts and the funds would automatically become part of the business so that it could fulfill its obligations.
It is not the company’s decision, but it is obligated to use the funds it keeps to cover its debts in the event of bankruptcy.
A pending regulatory issue
Like Business Intern explains, this is not the model that occurs when a bank declares bankruptcy since the regulations protect up to a certain limit of amounts for its users, similar to what happens in Mexico with the IPAB.
While Coinbase says that there is no risk for investors at the moment, this brings to the table one of the inevitable issues in exchange regulation and user protection, which is still pending in our country.
armstrong too said he hopes Coinbase’s terms and conditions will be changed quickly so that, in a possible bankruptcy, the funds can be saved and not diverted to meet the obligations of the company.
Since currently there is no protection in its terms and conditions, the CEO has apologized to users via Twitter.
Armstrong ended by saying that Coinbase’s ultimate goal is to offer the best cryptocurrency custody solutions.
The fall in The value of Coinbase shares coincides with a general decline in the stock market and more specifically in the technology sector.
Cryptocurrencies were dragged along with the downtrend and bitcoin reached its $30,000 barrier, a step seen for nearly a year. LUNA and TerraUST also saw significant drops of over 90% and 50% respectively.
Along with these movements Nubank said it will allow buying bitcoin and ethereum in Brazil directly in its app.