Ever wondered if your crypto is safe? With more and more crypto companies failing, knowing how your assets are handled is vital.
In this article, we’ll look at the importance of looking past the flashy surface of your favorite crypto app and explore how Bake makes sure your crypto stays yours.
Potential Fallout from Bankruptcy
Glancing at page 84 of a recent earnings report filed with the U.S. Securities and Exchange Commission by a major crypto exchange reveals a troubling scenario:
If the company goes bankrupt, the "crypto assets [they] hold in custody on behalf of [their] customers could be subject to bankruptcy proceedings."
Effectively, users could become "general unsecured creditors" with no particular claim to any assets if bankruptcy occurs. Their funds would remain frozen.
This differs greatly from traditional brokerage firms, where securities are legally separated from the firm's assets — ensuring they remain untouched even during bankruptcy. Several countries even safeguard regulated brokerage accounts, such as the U.S. Securities Investor Protection Corp., offering protection up to $500,000.
Bake’s Firm Stand
As crypto enthusiasts and service providers, we believe our customers should never face such a predicament. Separating customer and company funds is fundamental to the way we operate. Our customers will never be burdened by the company's setbacks.
We use transparency measures and safeguards to stop any user assets from being used for the company's gain. If Bake goes under, users' assets remain untouched by creditors.
Bake's CTO & Co-Founder, U-Zyn Chua, reiterated via Twitter that "100% of Bake user funds are accounted for."
Bake's Wallet Custody Solution
Bake uses the BitGo custody wallet solution for added protection and transparency.
BitGo isn't just another custody solution. It's known for its high-level security features, including multi-signature requirements for company and user assets.
This multi-signature process is key. It mandates several approvals for any movement of funds, adding an extra layer of security.
Stay Secure With Bake
The importance of crypto custody and asset segregation can't be overstated. Knowing how your funds are handled ensures peace of mind. Explore Bake’s many benefits now and secure your future.
DISCLAIMER: Please note that the information on this blog and in any articles posted on this blog is for general information only and should not be relied upon as financial advice. Cake Pte. Ltd., Bake, UAB, and its affiliates (the “Cake Group”) are not licensed financial advisers. You may wish to approach your own independent financial advisor before making any decision to buy, sell or hold any product and/or digital assets mentioned in this blog.
Any views, opinions, references, assertions of fact and/or other statements are not necessarily the views held by the Cake Group. The Cake Group disclaims any liability whatsoever that may arise out of or in connection with such statements. Always do your own research before investing in any financial assets and consult a qualified financial advisor if necessary.