Breaking News
Investing Pro 0
Cyber Monday Extended SALE: Up to 60% OFF InvestingPro+ CLAIM OFFER

Coinbase (COIN) CEO Calls out FTX’s “Risky Business Practices” – Affirms “No Material Exposure” to Competitor

Cryptocurrency Nov 09, 2022 02:00PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters Coinbase (COIN) CEO Calls out FTX’s “Risky Business Practices” – Affirms “No Material Exposure” to Competitor
 
COIN
+6.08%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

  • Coinbase (NASDAQ:COIN) allegedly has no “material exposure” to FTX, FTT, or Alameda Research.
  • Armstrong partly blames the hazy U.S. regulatory environment for the implosion.
  • COIN closed Tuesday, November 9th, at $50.83, down 10.78% from the prior 24 hours.

Brian Armstrong, CEO of Coinbase (COIN), one of the largest crypto exchanges in the world, has spoken out on the FTX (FTT) debacle, assuring users and investors that the company has no “material exposure” to FTX, its native FTT token, or Alameda Research.

Armstrong further used the opportunity to call out FTX’s actions, calling them “risky business practices”, which he believes included “conflicts of interest between deeply intertwined entities, and misuse of customer funds (lending user assets)”.

Armstrong was sure to emphasize that part of the problem leading to FTX’s implosion is that “regulators have been focused onshore”, while customers chose, in turn, to move their funds to exchanges with “opaque and risky business practices”.

“To take the U.S. as an example, 95%+ of crypto trading has developed overseas because crypto regulation in the US has been hard to navigate. That’s bad for the US and Americans are still losing money in these overseas blowups,” the Coinbase CEO underlined in a tweet. In Armstrong’s opinion, “heavy-handed” regulation is not the way to go, as it would only serve to force crypto companies and users to move overseas, which would just escalate the problem.

“We should continue to work with policy makers to create sensible regulation for centralized exchanges/custodians in each market (as we've been doing for some time), but then we need to see a level playing field enforced, which hasn't happened to date,” he opined. Armstrong’s comments come in response to the sudden collapse of Sam Bankman-Fried’s FTX crypto exchange, as its native token, FTT, plunged in value by more than 90% two days after a report revealed that Bankman-Fried owned Alameda Research, a crypto trading firm, holds the majority of its trading power in FTT.

Critics speculate that the two closely linked entities used FTT, along with users’ funds, as collateral to take out loans and engage in leverage trading.

FTX has seemingly managed to convince Binance CEO Changpeng “CZ” Zhao to step in and “cover the liquidity crunch”. However, it is unclear whether Binance pursue a total acquisition of the troubled exchange.

Following the ripples from the FTX news, COIN stock closed Tuesday, November 9th, at 10.78% lower than Monday at $50.83, according to data from Yahoo! Finance. At the time of writing, COIN is down a further 6% in premarket trading for the past 24 hours.

On the Flipside

  • It’s unclear how far the FTX contagion has spread.
  • It’s unclear what effect, if any, the FTX crash will have on competitors such as Coinbase.

Why You Should Care

Coinbase is one of the most used crypto exchanges in the world, and its assurances that it has no exposure to FTX, FTT, or Alameda have been welcomed with relief by the crypto community.

You Might Also Like:

The Untold Story of the Alameda-FTX Crisis That Nearly Brought Down the Crypto Market

See original on DailyCoin

Coinbase (COIN) CEO Calls out FTX’s “Risky Business Practices” – Affirms “No Material Exposure” to Competitor
 

Related Articles

The metaverse is happening without Meta's permission
The metaverse is happening without Meta's permission By Cointelegraph - Nov 30, 2022

In changing the name of its parent company to Meta, Facebook (NASDAQ:META) put a stake in the ground: It would be the symbol of the evolution of the internet, the metaverse....

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email