Coinbase accused of hiding bankruptcy risks

Coinbase shareholder Wenduo Guo has filed a lawsuit against the platform and its management for concealing bankruptcy risks. This was reported by Cointelegraph.

The lawsuit states that Coinbase failed to inform users that their funds could become part of the bankruptcy estate in the event of the company’s insolvency. In this case, retail investors would become unsecured creditors, threatening the safety of their assets. The plaintiff claims that before Coinbase’s IPO in April 2021, there were at least 75 cases of crypto exchanges collapsing, resulting in investors losing access to their cryptocurrencies. According to Guo, despite statements made by Coinbase’s management, the exchange is no different in terms of such risks.

The shareholder also claims that the company concealed facts about using corporate funds for its own trading operations. He is demanding a jury trial, compensation for investors’ losses, and a review of the company’s corporate governance.

It is worth noting that between December of last year and January 2025, Coinbase clients lost more than $65 million due to social engineering scams. This was reported by on-chain detective ZachXBT.