Coinbase Defends Customer Assets in Prime Trust Bankruptcy
Coinbase Fights for Customer Asset Protection in Prime Trust Bankruptcy
Coinbase has filed an amicus brief in the Prime Trust bankruptcy case, advocating for the protection of customer assets. Chief Legal Officer Paul Grewal announced the action, emphasizing that customer funds should remain separate from the bankrupt custodian's estate. This aligns with Coinbase's commitment to safeguarding customer assets and maintaining trust in the financial system.
Protecting Customer Assets with UCC Article 8
Coinbase's argument centers on Uniform Commercial Code (UCC) Article 8. This crucial piece of commercial law safeguards customer assets held by custodians, ensuring they remain separate from the custodian's bankruptcy proceedings. Coinbase asserts that both its user agreement and Prime Trust's explicitly state that assets belong to customers, a principle that shouldn't change due to bankruptcy.
Coinbase's brief argues that upholding UCC Article 8 is vital for maintaining trust in custodians across both traditional and digital finance. The company points to the precedent set by major institutions like Bank of New York (BNY) and Depository Trust Company (DTC), where courts have consistently protected customer assets under UCC Article 8.
Coinbase's Broader Legal Involvement
Beyond the Prime Trust case, Coinbase CLO Paul Grewal will testify in the Operation Chokepoint 2.0 hearing, addressing concerns about unfair banking restrictions on crypto businesses. This underscores Coinbase’s active role in shaping regulatory frameworks for the crypto industry.
Strengthening Global Presence and Compliance
Coinbase continues to expand its global reach, recently obtaining a VASP license in the UK, allowing them to offer expanded crypto and fiat services. This demonstrates Coinbase's commitment to both growth and regulatory compliance.
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Disclaimer: This information is for educational purposes only and should not be considered investment advice. Conduct thorough research before making any investment decisions.