Coinbase said the problems at Three Arrows Capital, Celsius and other beleaguered cryptocurrencies were the result of insufficient risk controls.
- Coinbase addressed the recent insolvency rumors.
- He denied exposure to troubled firms such as 3AC and Celsius.
- He argued that they did not have effective risk control.
Amid rumors of a lack of liquidity, Coinbase is an American company that operates a cryptocurrency exchange platform. ha publicado una blog entry providing some details on their approach and funding policy, as well as addressing some speculation.
The U.S.-listed cryptocurrency cryptocurrencies are digital currencies that use cryptographic technologies to secure their operation. exchange alluded to the recent price drop and the financial difficulties some companies in the industry have faced in the face of this turmoil in the market. He specifically mentioned Celsius ,Three Arrows Capital capital is most commonly defined as the large sum of money you would use to invest. (3AC) and Travel three companies with insolvency problems that have filed for bankruptcy.
In its publication, it argued that these drawbacks were the result of poor risk control practices. Furthermore, he stressed that it was not a problem specifically related to the nature of the digital digital technologies are these electronic tools that have the ability to generate, store or even process data. assets, but rather to the credit and business management of many of those companies operating in the digital asset class. overleveraged “.
“ The solvency concerns surrounding entities such as Celsius, Three Arrows Capital (3AC), Voyager and other similar counterparties were a reflection of insufficient risk controls. and reports of other distressed companies are fast becoming stories of bankruptcy, restructuring and failure. “, wrote the firm.
We believe these market an area or arena, online or offline, in which commercial dealings are conducted. participants got caught up in the frenzy of a bullish cryptomarket and forgot the basics of risk management.
Coinbase denies exposure to troubled cryptocurrencies
The blog post goes on to deny the relationship of the exchange businesses that allow customers to trade cryptocurrencies for fiat money or other cryptocurrencies. with the platforms in question and highlighting on their “ multifaceted risk management programs “designed to protect users. He also said that the insolvency crisis could represent a “ an important turning point for the industry “However, he expressed his confidence about a coming recovery of the sector.
Coinbase had no financial exposure to the above groups. We have not engaged in these types of risky lending practices and have instead focused on building our financial business with prudence and a deliberate customer focus.
Coinbase mentioned some of the practices and principles, such as the “. stress testing “The company uses it to guarantee effective risk management and ensure that clients can always access their funds.
However, in a footnote, the company added that while it did not have exposure to the beleaguered cryptocurrencies, its risk management program did “ made non-material investments in Terraform Labs”.
Rumours of insolvency
The statements come amidst rumours of insolvency at Coinbase . Several users in the cryptocurrency community have been speculating on social media that the recent suspension of the affiliate program of the exchange could be an indicator of potential drawbacks in remaining solvent.
Like collected BeInCryptoIn the last few days, cryptocurrency personalities such as Kurt Wuckert Jr, of CoinGecko , Nate O’Brien y BitBoy had shared on Twitter their views on what could be an impending liquidity how easily a cryptocurrency can be bought and sold without impacting the overall market price. crunch for Coinbase . Not everyone agreed, though, and the topic generated heated debate among crypto enthusiasts.
Coinbase shut down their affiliate program and are getting rid of CoinBase pro. Recent history would suggest there could be trouble ahead for CB so tread lightly.
If Coinbase were to go insolvent, this would break crypto the crypto space like we have never seen before.
— Ben Armstrong (@Bitboy_Crypto) July 16, 2022
The cryptocurrency industry has been affected in recent months due to factors such as the implosion of the cryptocurrency ecosystem. Earth the liquidity crisis of Three Arrows Capital and the broader macroeconomic situation of inflation. Amid the price slowdown in the market, several platforms have opted to halt withdrawals as a way to address a place where cryptocurrency can be sent to and from, in the form of a string of letters and numbers. the lack of liquidity.
Despite its risk management strategy, Coinbase has also been affected by this bearish scenario. As destaca CoinDesk The exchange’s stock has plummeted nearly 74% year-to-date and the company has also announced plans to cut its workforce by 18%.
- Zipmex is latest cryptocurrency exchange to freeze withdrawals citing volatility a statistical measure of dispersion of returns, measured by using the standard deviation or variance between returns from that same security or market index.
- Three Arrows Capital founders reportedly bought $50 million yacht with borrowed money
- FTX’s Sam Bankman-Fried warns more crypto firms are “secretly insolvent”
Article by Hannah Estefania Perez / DiarioBitcoin
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