This is true for any brokerage account where you have margin enabled. Check your margin agreement carefully. Or better, disable
margin on your brokerage account
“ people with margin accounts end up as just general creditors in any bankruptcy and recover only a fraction of their assets after some years in bankruptcy proceedings. During bankruptcy, their accounts are frozen and no transactions are allowed”
I'd be pretty interested to see how cash account is treated differently; I couldn't find a better reference either. But one advantage over the coinbase situation is at least the margin account falls under SIPC.
“ people with margin accounts end up as just general creditors in any bankruptcy and recover only a fraction of their assets after some years in bankruptcy proceedings. During bankruptcy, their accounts are frozen and no transactions are allowed”
https://www.bogleheads.org/forum/viewtopic.php?t=20582
(sorry couldn’t find a better reference searching on my phone)