A recent paper from academics at Leiden Law School suggests that if a crypto exchange or crypto custodian goes bankrupt, investors could well lose control over their stored coins. This happened in Japans Mt. Gox exchange collapse, and more recently with the failure of Italys BitGrail exchange. Thus, it could happen again.
Indeed, the paper implies that even users of United States-based exchange Coinbase could have problems reclaiming their crypto in the event of insolvency because Coinbase doesnt segregate blockchain addresses. So, the question still stands: Is there a risk you could lose your Bitcoin if an exchange or custodian goes bankrupt?
Absolutely, there is a risk, Edgar Sargent, a partner at Susman Godfrey law firm, who was hir…
Read the full article at: https://cointelegraph.com/news/safety-check-if-crypto-custodian-fails-clients-may-not-get-a-full-payout
