What Happens If Your Brokerage Firm Goes Bankrupt?

Money For the Rest of Us

J. David Stein

Investing, Investing Podcast, Business, Economics, Economy

4.5 • 1.4K Ratings

🗓️ 13 July 2022

⏱️ 29 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

How protected are you if the brokerage firm where you hold your stocks, bonds, and crypto assets files for bankruptcy? Why you shouldn't store your crypto assets with an online broker.

Topics covered include:

How traditional brokerage firms protect their client assets in case of bankruptucy
How cryptocurrency brokers, such as Voyager, mistreat their clients in bankruptcy proceedings
What is the safest way to hold cryptocurrency

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Show Notes

Voyager To Acquire Circle Invest Retail Digital Asset Business From Circle Internet Financial—Cision

Welcome, Circle Invest! Voyager Acquires Circle Invest's Retail Customers—Voyager

Crypto lender Voyager Digital files for bankruptcy by Shivam Patel, Sinead Cruise, and Tom Wilson—Reuters

Crypto lender Voyager addresses customer anger in first bankruptcy hearing by Dietrich Knauth—Reuters

If a Brokerage Firm Closes Its Doors—FINRA

Crypto Broker Voyager Digital Says Three Arrows Capital Hasn’t Repaid $666 Million in Loans by Vicky Ge Huang—The Wall Street Journal

From $10 billion to zero: How a crypto hedge fund collapsed and dragged many investors down with it by MacKenzie Sigalos—NCBC

Ropes & Gray

Update on Customer USD and Crypto—Voyager

Investors lament potentially lost ‘millions’ on Voyager bankruptcy by Brian Quarmby—Cointelegraph

Coinbase Quarterly Report

CFTC Charges MF Global Inc., MF Global Holdings Ltd., Former CEO Jon S. Corzine, and Former Employee Edith O’Brien for MF Global’s Unlawful Misuse of Nearly One Billion Dollars of Customer Funds and Related Violations—Commodity Futures Trading Commission

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Transcript

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0:00.0	Welcome to Money for the Rest of Us.
0:03.2	This is the Personal Finance Show on Money, how it works, how to invest it, and how to
0:08.1	live without worrying about it.
0:10.4	I'm your host, David Stein, today's episode 393.
0:14.0	It's titled, What Happens If Your Brokage Firm Goes bankrupt?
0:19.8	Four years ago, in the summer of 2018, for four episodes, one of our sponsors of the
0:24.9	show was Circle Invest.
0:27.4	It was an app to purchase and store cryptocurrency.
0:31.5	Circle Invest has been around since 2013.
0:34.6	In the app allowed you to buy the crypto market, you could spread your bets across a number
0:42.6	of cryptocurrencies in one trade.
0:46.1	I tried it out and purchased about $500 of Zcash and Monero.
0:52.1	My son, Camden, also tried it out.
0:55.2	In the ads, I was very specific that cryptocurrency was a speculation.
1:01.7	And by speculation, I mean, there's disagreement over whether the return will be positive
1:07.0	or negative.
1:08.1	And that in the worst case, the speculator could lose all of their investment.
1:13.8	It could go to zero.
1:15.3	That's what speculations are.
1:17.5	We did the spots we moved on in February 2020.
1:21.2	A company named Voyager purchased Circle Invest.
1:26.0	At the time, Voyager's co-founder in CEO, Stephen Erlich, wrote, this product line acquisition
	...

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