It’s been just revealed by CoinDesk that Coinbase said that it had no financial exposure to the crypto companies that are seeing bankruptcy protection. Check out the latest reports below.
Coinbase addresses the latest events in the crypto space
Publicly traded cryptocurrency exchange Coinbase (COIN) had no financing exposure to crypto lender Celsius Network, hedge fund Three Arrows Capital or crypto broker Voyager Digital, according to a Coinbase blog post on Medium on Wednesday. All three troubled firms are seeking bankruptcy protection.
“We have not engaged in these types of risky lending practices and instead have focused on building our financing business with prudence and deliberate focus on the client.”
This is what Coinbase Institutional head Brett Tejpaul, Prime finance head Matt Boyd and Credit and Market Risk head Caroline Tarick wrote.
“The shocks to the crypto credit environment over the last few weeks are likely to be a major inflection point for the industry,” wrote the group.
They continued and said the following:
“Notably, the issues here were foreseeable and actually credit specific, not crypto specific in nature. Many of these firms were overleveraged with short-term liabilities mismatched against longer-duration illiquid assets.”
Coinbase CEO addressed the latest issues
Brian Armstrong says the exchange is now facing the unwanted consequences of growing its workforce too fast.
In a new statement, Armstrong said that companies tend to become less efficient when they scale up, affecting their ability to focus on customers.
“While this trajectory is natural, it is not inevitable. Every great company, from Amazon to Meta to Tesla, found ways to retain their founding energy in conjunction with appropriate controls, even as they scaled to be much larger than Coinbase is today.”
He also said the following:
“Great companies maintain their insurgent mindset, for fear of becoming complacent and irrelevant over time.”