Coinbase is not going bankrupt, CEO says

The chief executive of Coinbase has said that a disclosure in its latest quarterly filing did not indicate it faced a bankruptcy risk.

Brian Armstrong also said that the cryptocurrency exchange operator had been made to meet a U.S. Securities and Exchange Commission (SEC) requirement.

Brian Armstrong made his comments after

Earlier, Coinbase had said that, in the event of bankruptcy, crypto assets held by the exchange could be considered property of the bankruptcy proceedings and customers could be treated as general unsecured creditors.

An unsecured creditor would be one of the last to be paid in any bankruptcy and last in line for claims.

Coinbase also missed estimates for first-quarter revenue and posted a loss, sending its shares down 15%.

The largest U.S. cryptocurrency exchange acknowledged its disclosure might lead customers to think that keeping their coins on the platform would be considered “more risky.”

“We have no risk of bankruptcy,” Armstrong wrote on Twitter after the disclosure, which he said was made to meet SEC requirements.

Armstrong said it was unlikely that “a court would decide to consider customer assets as part of the company in bankruptcy proceedings”, although he said it was still possible.

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