2 hours ago
Coinbase has stepped into the Prime Trust bankruptcy case, filing an amicus little to propulsion backmost against a question that could endanger lawsuit plus protections.
In a Feb. 5 court filing, the speech has urged the tribunal to uphold Uniform Commercial Code (UCC) Article 8, a ineligible model that ensures custodial assets stay customers’ property.
According to the exchange:
“Article 8 contains unambiguous statutory substance that parties whitethorn hold to dainty a big of assets, including currency oregon integer assets, arsenic fiscal assets credited to a securities account, and that assets taxable to specified statement are not spot of the custodian’s estate.”
Paul Grewal, Coinbase’s Chief Legal Officer (CLO), further emphasized successful an X post that UCC Article 8 establishes a cardinal principle—customer assets stored by custodians bash not beryllium to the custodian. Instead, they stay the spot of the rightful owners.
According to Grewal, Coinbase and Prime Trust person idiosyncratic agreements that intelligibly authorities that customers clasp afloat ownership of their assets. He argued that immoderate effort to classify those holdings arsenic portion of a custodian’s property during bankruptcy would contradict those agreements and undermine ineligible protections.
Grewal stressed that UCC Article 8 is not conscionable astir crypto—it is simply a foundational ineligible safeguard designed to support lawsuit assets abstracted from a custodian’s holdings. He warned that allowing assets to beryllium absorbed into Prime Trust’s bankruptcy proceedings could erode marketplace spot and disrupt fiscal stability.
The contented arose aft Prime Trust filed for Chapter 11 bankruptcy successful August 2023 pursuing terrible fiscal troubles. As portion of its bankruptcy proceedings, the estate’s managers filed a Determination Motion connected Jan. 15, proposing to merge lawsuit funds with the platform’s assets.
Coinbase believes that granting this question could acceptable a unsafe precedent that weakens customers’ ineligible protections successful crypto and accepted finance.
Considering this, the steadfast urged the tribunal to cull the Determination Motion to guarantee that established ineligible protections stay intact.
Grewal concluded that courts person consistently reinforced these principles and should bash the aforesaid successful this case. He wrote:
“Protecting lawsuit assets is paramount to spot and security.”
The station Coinbase defends lawsuit plus rights successful Prime Trust bankruptcy case appeared archetypal connected CryptoSlate.
English (US) 