The crypto trading firm Coinbase warns the everyday users that there is a lack of insights into the investor’s protections built into the conventional financial services.
Coinbase Global Inc. this week showed concerns about the matter. The crypto trading platform suggested that the digital tokens do not really belong to the customers if it gets any push. It also said that the assets they hold on behalf of their customers are subjected to bankruptcy and if it happens such customers could be treated as the normal unsecured creditors.
On the other hand, the securities held by the registered brokerage are actually separated from the brokerage assets, which means that they will not be harmed by any kind of bankruptcy proceedings. For example, the Securities Investor Protection Corp. which was established in the year 1970, has ensured around $500000 of the customers’ securities and cash in brokerage accounts.
The trading platforms Coinbase operates are more user-friendly as it offers the investors an easier avenue to trade directly with their counterparts.
Gary Gensler, the Chair of the Securities and Exchange Commission has earlier warned the investors about the risks related to these platforms and which the federal market researchers did not oversee.