Coinbase Confirms ‘No Funding Exposure’ to Bankrupt Crypto Firms Celsius, Voyager, Three Arrows Capital – Bitcoin News Exchanges

Coinbase Confirms ‘No Funding Exposure’ to Bankrupt Crypto Firms Celsius, Voyager, Three Arrows Capital – Bitcoin News Exchanges

Crypto exchange Coinbase confirmed that the company had “no exposure to financing” according to bankrupt firms, including Celsius Network, Voyager Digital and Three Arrows Capital (3AC). “The issues here were predictable and actually related to credit, not crypto-specific in nature,” Coinbase emphasized.

Coinbase: ‘We have not engaged in these types of risky lending’

Nasdaq’s cryptocurrency exchange Coinbase clarified its approach to cryptocurrency financing in a blog post on Wednesday. The post was written by Brett Tejpaul, Head of Coinbase Institutional, Matt Boyd, Head of Prime Finance, and Caroline Tarnok, Head of Credit and Market Risk.

“Solvency concerns around entities such as Celsius, Three Arrows Capital (3AC), Voyager and other similar counterparties have been a reflection of insufficient risk controls, and reports of additional firms struggling are quickly becoming stories of bankruptcy, restructuring and failure,” Coinbase CEOs detailed, adding:

Significantly, the problems here were predictable and actually credit-related, not crypto-specific in nature.

“Many of these firms were over-indebted with short-term liabilities that were not matched by long-term illiquid assets,” they noted.

“We believe these market participants got caught up in the crypto bull market frenzy and forgot the basics of risk management. The unhedged bets, the huge investment in the Terra ecosystem and the huge leverage that 3AC provided and used meant that the risk was too high and too concentrated,” the executives explained, noting:

Coinbase had no financial exposure to the aforementioned groups. We did not engage in these types of risky lending.

In September of last year, Coinbase abandoned launching its lending program after the US Securities and Exchange Commission (SEC) threatened to sue company if it goes ahead with the launch.

Coinbase executives further noted that their company is “focused on building our financial business with caution and a deliberate focus on the customer.”

Crypto lenders Celsius Network and Voyager Digital filed for Chapter 11 bankruptcy earlier this month after the crypto hedge fund Three capital arrows filed for Chapter 15 bankruptcy.

Coinbase also revealed in a blog post:

While Coinbase has no counterparty exposure to the companies listed above, Coinbase’s venture program has made intangible investments in Terraform Labs.

Singapore-based Terraform Labs is the company behind failed cryptocurrency terra (LUNA) and stablecoin terrausd (UST). The firm now exists researched by South Korean authorities and the US Securities and Exchange Commission (SEC).

What do you think of Coinbase’s explanation? Let us know in the comments section below.

Coinbase Confirms ‘No Funding Exposure’ to Bankrupt Crypto Firms Celsius, Voyager, Three Arrows Capital – Bitcoin News Exchanges

Kevin Helms

An Austrian economics student, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in bitcoin security, open-source systems, network effects, and the intersection between economics and cryptography.




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