--- title: "Coinbase Says If It Goes Bankrupt, It Might Seize Users’ Crypto" description: "The crypto wallet company Coinbase appears to have quietly snuck a mutually-assured destruction clause into its latest earnings report." date: "2022-05-11" modified: "2022-05-11" authors: - name: "Noor Al-Sibai" job_title: "Senior Staff Writer" link: "https://futurism.com/authors/nooralsibai" url: "https://futurism.com/the-byte/coinbase-bankrupt-might-seize-money" categories: - "Blockchain" - "Future Society" tags: - "coinbase" - "crypto" - "crypto wallet" - "the blockchain" - "the digest" --- # Coinbase Says If It Goes Bankrupt, It Might Seize Users’ Crypto ![The crypto wallet company Coinbase appears to have quietly snuck a mutually-assured destruction clause into its latest earnings report.]() *Cryptocurrency illustration concept shows the Bitcoin dropping down to the fall with the growth sign of graph on the blue shiny abstract background. \Image: Getty Images\* ## Failsafe The crypto wallet company Coinbase appears to have quietly snuck a mutually-assured destruction clause into its latest earnings report. As [*Fortune* observed](), the fine print in Coinbase's quarterly earnings report — which details both a $430 million loss and a 19 percent drop in users per month — explains that if the company goes bankrupt, it could possibly take all the crypto in its users' wallets. In a subsection noting that the company currently holds $256 billion total in both cryptocurrencies and fiat, Coinbase added that in the event of bankruptcy, its users would become "general unsecured creditors" and "the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings." ## Anxiety After people caught wind of the bizarre fine print admission [and were understandably pissed](), Coinbase [CEO Brian Armstrong]() took to Twitter to try to assuage their concerns. "Your funds are safe at Coinbase," [Armstrong tweeted](), "just as they’ve always been." He added that the company "has no risk of bankruptcy," and only included the risk clause due to a new Securities and Exchange Commission requirement. "This disclosure makes sense in that these legal protections have not been tested in court for crypto assets specifically," Armstrong continued, adding that it is nonetheless "possible, however unlikely, that a court would decide to consider customer assets as part of the company in bankruptcy proceedings even if it harmed consumers." So much for [quelling user anxiety](). **READ MORE:** [Coinbase earnings were bad. Worse still, the crypto exchange is now warning that bankruptcy could wipe out user funds]() \[*Fortune*\] **More on Coinbase:** [*The CEO of Coinbase Gets Brutally Owned, May Never Recover*]() ## Author At Futurism, I've often been drawn to unpacking the narratives that underlie technological, scientific and medical progress, with a special interest in areas of conflict and ambiguity that end up setting agendas and steering the fates of both elites and the hoi polloi. I'm a committed generalist, but I often find myself returning to work involving NASA and the private space sector, the effects of AI on media and society, and the mechanics of the pharmaceutical industry, with a specific focus on the spread of GLP-1 drugs like Ozempic and Wegovy. Prior to Futurism, I worked for publications ranging from Media Matters and Truthdig to Raw Story and Bustle. I'm also the author of "Myspace Scene Queens," a 2024 title in Instar Books' acclaimed "Remember the Internet" series. My work at Futurism has been cited by outlets including the New Yorker, Slate, Nieman Lab, the Verge, the MIT Technology Review, the Sunday Times, and the Daily Beast. I grew up in North Carolina, attended the University of North Carolina at Asheville, and now live in Brooklyn, New York. In my free time, I'm an avid reader and music fan; you can probably find me at a local poetry reading, concert, underground rave, or DJ set. I'm the proud parent of an ineffable orange cat named Mee-Mow. ### Author social links [Bluesky]()