[UncleEntity]

Sure, why would anyone invest in them if they weren’t sure they’d get paid out first when things go bad?

Kind of like the banks back in ‘09 making their depositors take a haircut to ensure the bank didn’t go under. Nobody really complained because it was the offshore banks where oligarchs and such hide their money and they received ‘ownership’ in return for them stealing their deposits.

[jrumbut]

But the average American, or even pretty financially sophisticated ones, don't have experience with an institution like that.

I think it's fair to expect users to know the coins they buy might lose value, but this is a bizarre and unexpected risk. It's clear from this thread that hardly anyone thought to consider this risk because they are trading off the expectations created by other, better regulated institutions (namely domestic banks).

Edit: I may have misread your intentions, when I wrote this I thought you were saying this arrangement was OK because it has happened elsewhere.

[cko]

If Charles Schwab goes under I'm pretty sure I still own the shares I bought through them though.