[jaderobbins1]

I think this is also a basic concept of the stock market that many people don't understand as well.

[toomuchtodo]

In the stock market, there exists counterparty risk mitigation; in the event your counterparty is insolvent at the time clearing/settlement occurs, your trade will be made whole by a clearing/settlement corp.

No such guarantee exists with cryptocurrencies.

[dmurray]

What? Coinbase and other exchanges go a step further than that, and require the counterparty to have deposited 100% of what they will deliver to you up front. So you will be made whole unless the exchange itself steals your money or gets hacked.

[toomuchtodo]

Who is backing Coinbase in the event of insolvency due to a clearing or settlement anomaly?