As I understand it, English law custody model is a trust arrangement and pure delegate custodian should be safe in the case of bankruptcy.
Shouldn't does not mean that it does not happen in the UK too. The Lehman Client Money Litigation in the UK is a good example. Lehman Brothers International fell short $2.6 billion in client money under CASS 7 (statutory trust, segregation and pooling).
Coinbase is not operating with that model. Coninbase customers can be just general unsecured creditors
> 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
As I understand it, English law custody model is a trust arrangement and pure delegate custodian should be safe in the case of bankruptcy.
Shouldn't does not mean that it does not happen in the UK too. The Lehman Client Money Litigation in the UK is a good example. Lehman Brothers International fell short $2.6 billion in client money under CASS 7 (statutory trust, segregation and pooling).
Coinbase is not operating with that model. Coninbase customers can be just general unsecured creditors
> 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