Coinbase Filed a 10Q Form Stating That Customers Could Be Treated as Unsecured Creditors

For Q1 of 2022, Coinbase filed a 10Q form, which included new language which stated that:

"Moreover, because custodialy 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."

An image of the passage from the 10Q form follows.

The CEO of Coinbase Brian Armstrong wrote a longform chained series of posts on X which said there is no risk of Coinbase going bankrupt and that customers’ assets are safe as they’ve always been.

The links to the PDFs of the SEC 121 rule as well as the filed 10Q form follow.