Brian Armstrong’s comments on late Tuesday came after the company said in the event of bankruptcy, crypto assets held by the exchange could be considered property of the bankruptcy proceedings and customers could be treated as unsecured creditors.

An unsecured creditor would be one of the last to be paid in any bankruptcy and last in line for claims.

Coinbase said its disclosure might lead customers to believe that keeping their coins on the platform would be considered “more risky,” which would in turn materially impact its financial position.

“We have no risk of bankruptcy,” Armstrong said on Twitter after the disclosure. He said it was unlikely that “a court would decide to consider customer assets as part of the company in bankruptcy proceedings” although it was still possible.

Coinbase would take further steps to ensure it offered protection for its retail customers, Armstrong said.

“We should have updated our retail terms sooner, and we didn’t communicate proactively when this risk disclosure was added,” he said. “My deepest apologies”.

Coinbase shares plunged 17.4 per cent before the bell on Wednesday after sliding 15 per cent in extended trading when the company’s quarterly revenue missed market expectations and it swung to a loss as turmoil in global markets curbed investor appetite for digital currencies.

Its shares have plummeted 71 per cent so far this year, mirroring the drop in prices of major cryptocurrencies like Bitcoin.

Coinbase went public in April 2021. It blamed the weak results on a “continued . . . trend of both lower crypto asset prices and volatility that began in late 2021”.

“We believe these market conditions are not permanent and we remain focused on the long term,” the company added.

The post What do Coinbase’s results mean for the future of the crypto exchange? first appeared on Magazin Haber Ajansı.

But the rush to buy land from the company Yuga Labs slowed the entire Ethereum blockchain over the weekend. On Monday,  ApeCoin (APE) prices slid as much as 11 per cent.

The company is best known for creating the Bored Ape Yacht Club NFT (non-fungible token) collection, representing 10,000 computer-generated cartoon apes, which can be worth hundreds of thousands of dollars each.

In March it raised $450 million (€427 million) in funding to build the “Otherside”, a decentralised Bored Ape-themed metaverse.

Although little is known about Yuga Labs’ virtual world, enthusiasts on Sunday rushed to buy its “Otherdeeds” NFTs, which it said could be exchanged as plots in its virtual land.

A limited supply of 55,000 “Otherdeeds” NFTs were up for grabs at about $7,000 (€6,650) each, and were only available for purchase in ApeCoin (APE), Yuga Labs’ official cryptocurrency.

But it resulted in some of the highest transaction costs – or “gas fees” – in the history of the Ethereum network due to the high demand, with investors spending over $176 million (€167 million) on fees alone in the past 24 hours, according to CoinDesk. Those fees cost in some cases more than double the Otherdeed NFT itself.

“This has been the largest NFT mint in history by several multiples, and yet the gas used during the mint shows that demand far exceeded anyone’s wildest expectations,” Yuga Labs said on Twitter.

“We’re sorry for turning off the lights on Ethereum for a while”.

As a result, Ethereum’s transaction tracker crashed and transactions were slowed on Ethereum-linked services.

Despite the main arguments in favour of decentralised finance (DeFi) slashing fees by cutting out the middleman, the expensive incident throws into question Ethereum’s long-term viability for NFT sales.

At the end of its apology Tweet, Yuga Labs suggested it could build its own dedicated blockchain.

“It seems abundantly clear that ApeCoin will need to migrate to its own chain in order to properly scale. We’d like to encourage the DAO [decentralised autonomous organisation] to start thinking in this direction”. 

The company said it was “working on refunding all Otherdeed minters with failed transactions their gas. Note that you do not need to do anything – we will transfer it all back to your wallet and announce when it is completed. Don’t click any links”.

The post Why did the Bored Ape team’s metaverse project clog Ethereum? first appeared on Magazin Haber Ajansı.

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