Thursday, December 7, 2023

No Risk of Exposure to Bankrupt Crypto firms, according to Coinbase.

On July 20, cryptocurrency exchange platform Coinbase confirmed that there was no risk of exposure to bankrupt cryptocurrency firms like Three Arrows Capital, Voyager Digital, and Celsius. This announcement shot up Coinbase’s stock prices by 14.34%, to a closing stock price of $75.27.

Coinbase opined that they had not engaged in any dangerous lending practices. According to the company, they have always focused on efficiently building financial relationships with their clients.

Background

Coinbase revealed that the firm engaged in an “immaterial investment” through its venture capital sector in Terraform Labs. Terraform Labs was behind the development of the failed stablecoin, Terra. A “crypto winter” was brought on by the circumstances plaguing Terra at the time and wider disturbance in the larger cryptocurrency industry was unavoidable. Numerous firms affiliated with Terraform Labs failed to survive the downfall of UST and LUNA coins. One such company was Three Arrows Capital, also known as 3AC.

The ripple effect of 3AC’s bankruptcy

Genesis Capital, a digital asset exchange firm, said that it would sell its collateral against the risk of bad debts if 3AC failed to meet margins. Blockchain.com may suffer a loss of $270 million if 3AC is unable to repay loans.

Coinbase’s Comments

Coinbase opined that the three firms mentioned earlier in the article were burdened with short-term liabilities that were not in tune with their assets. The company assured users that they were not about to suffer the same fate.

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.
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