Coinbase, one of the largest cryptocurrency exchanges, said its users might lose access to their holdings if the company ever went bankrupt.
The disclosure was included in the company's first-quarter earnings report, and that was the first time the risk factor was mentioned. It also noted that Coinbase held $256 billion in fiat currencies and virtual coins.
"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," the company said.