Brian Armstrong says the FTX crisis has no impact on Coinbase

Coinbase is not affected by the crisis enveloping the FTX platform, and its users have nothing to fear. This was stated by Brian Armstrong, the CEO of the American bitcoin exchange.

2/ Second, Coinbase doesn’t have any material exposure to FTX or FTT (and no exposure to Alameda).

— Brian Armstrong (@brian_armstrong) November 8, 2022

“First, I deeply sympathize with everyone involved in the current situation with FTX […]. Second, Coinbase has no material exposure to FTX or FTT (and Alameda),” Armstrong wrote.

In his view, the crisis engulfing the platform of Sam Bankman-Fried was the result of \”risky business practices, including conflicts of interest among tightly interconnected entities\”. Another reason he cited was \”misuse of customer funds\”.

Armstrong stressed that Coinbase does not handle users’ assets without their knowledge, and they can \”withdraw their money from the exchange at any time\”.

5/ We don’t do anything with our customers’ funds unless directed to by the customer. We hold all asset dollar for dollar, and users can withdraw their money at any time.

— Brian Armstrong (@brian_armstrong) November 8, 2022

On April 14, 2021, direct listing of Coinbase shares on Nasdaq took place. Armstrong emphasized that the status of a US-registered public company obliges the platform to adhere to transparency.

6/ We are incorporated in the US, and publicly listed in the US because we believe that transparency and trust are so important. Every investor and customer can see our public audited financials, which shows how we hold customer funds. We’ve never issued an exchange token.

— Brian Armstrong (@brian_armstrong) November 8, 2022

“Every investor and customer can review our publicly audited financial statements,” added the CEO.

He also reminded that Coinbase did not issue its own token, unlike FTX. One of the problems facing crypto exchanges, Armstrong said, is regulators’ focus on markets under their control, while customers \”moved overseas to companies with more opaque and riskier business practices\”.

“We must continue to work with policymakers to create sensible regulation for centralized exchanges/custodians in each market (as we have been doing for some time), but then we must ensure a level playing field, which has not yet happened,” concluded the Coinbase CEO.

Earlier, the FTX utility token (FTT) fell about 30% — from above $22 to below $16.

The crash came amid rumours of a standoff between Binance and FTX, as well as concerns about the latter’s financial stability. At the same time, Bitcoin price fell below $20,000, dragging the rest of the market.

On November 6, Binance CEO Changpeng Zhao announced a move to shed FTT. Assets along with BUSD totaling about $2.1 billion were the result of the company’s exit from its portfolio investment in FTX.

On November 8 Bankman-Fried and Zhao announced a strategic partnership. It is meant to resolve the liquidity crisis and envisages a possible takeover of FTX by Binance.

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