2022-05-13 20:08:42
*Coinbase Holdings?*
Coinbase, one of the largest cryptocurrency exchanges, _*notified that if the company is on the verge of bankruptcy*_, They will lose access to their holdings.
*But why?*
_By definition, Cryptocurrency is decentralized and belongs only to the owner._
Generally, If Indian Banks go bankrupt, Indian Bank Accounts are insured by the DIGCC ( Deposit Insurance and Credit Guarantee Corporation), an RBI subsidiary.
_*Similarly, Coinbase has a $255 M policy by Llyod's registered broker Aon*_.
*So problem solved?*
_*Actually no.*_
According to the Chief Information Security Officer (CISO), Philip Martin. The insurance had sufficient coverage to fully cover their hot wallets (including enough buffer to handle asset price spikes).
But policies are generally written to exchanges or custodians, not directly to cryptocurrency holders.
Crypto holders are _*granted second priority as unsecured creditors*_ if this policy invokes.
Coinbase is an excellent example of why we need a world where cryptocurrency's ultimate owners may directly insure their holdings.
Credits ~ Prudhvi
149 viewsVinay, 17:08
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