Why Crypto Depositors Could Lose Everything in Bankruptcy

Cryptocurrency platforms often use complex offshore structures that leave retail depositors exposed to losses when platforms collapse. According to Roshan Dharia, customers frequently surrender legal ownership of their digital assets without realizing it, leaving them ranked as unsecured creditors during bankruptcy proceedings. When a centralized cryptocurrency platform halts withdrawals, millions of retail depositors can face the same realization: The sleek mobile application and seamless trading interface offered a false sense of security. Behind the branding lies a complex web of offshore entities, omnibus wallets, and fine-print customer agreements that can shield corporate structures while shifting insolvency risks onto depositors.

Source: Bitcoin.com News