(Bloomberg) — Coinbase Global Inc. Chief Executive Officer Brian Armstrong said there is “no risk of bankruptcy” for the largest U.S. cryptocurrency exchange, even amid a “black swan” event.
A filing late Tuesday by Coinbase included a “new risk factor” based on recent Securities and Exchange Commission requirement for public companies that hold crypto assets for third parties.
“Because custodially held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings and such customers could be treated as our general unsecured creditors,” Coinbase wrote in the filing.
Coinbase will take additional steps to ensure that it offers protection for its retail customers that match those offered to Prime and Custody consumers, Armstrong said in Twitter thread late Tuesday.
“We should have updated our retail terms sooner, and we didn’t communicate proactively when this risk disclosure was added,” Armstrong wrote. “My deepest apologies.”
Shares in the company fell 16% after regular trading as first-quarter revenue missed analyst estimates.
(Corrects to remove the reference in the first paragraph to this week’s market decline.)
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