Coinbase confirms no bankruptcy exposure

Coinbase announced Wednesday it had no risk-free exposure to bankrupt crypto businesses Celsius, Three Arrows Capital, and Voyager Digital.

Coinbase's stock price rose 14.34 percent, ending at $75.27, after the news broke.

There has been a 70 percent drop in share prices this year, though.

Because Coinbase has no exposure to Celsius, 3AC, or Voyager's credit risk, here's what they say:

“We have not engaged in these dangerous lending tactics and instead have focused on expanding our financing business with caution and deliberate emphasis on the customer.”

It was then revealed that through its venture capital division, the corporation had made a “immaterial investment” in Terraform Labs, the developer of the failed stablecoin project Terra. As a result of Terra's problems at the time, the cryptocurrency world was thrown into disarray and a crypto winter was declared, leading mSeveralses to disband.

One of Terraform Labs' linked firms is Three Arrows Capital (3AC). The crypto hedge fund was unable to withstand the demise of LUNA and UST.

As a result of their financial difficulties, the three companies listed above have filed for bankruptcy. Coinbase stated, “Many of these enterprises were overleveraged with short-term liabilities mismatched against longer duration illiquid assets.”

It guaranteed investors that Coinbase wouldn't go down the same road.

In the event that Three Arrows Capital fails to fulfill its margin calls, Genesis Capital, the digital asset lending firm, has stated that it will sell its collateral.

An estimated $270 million in losses may be incurred by cryptocurrency exchange Blockchain.com as a result of Three Arrows Capital's failure to make loan repayments following its bankruptcy and liquidation.

As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!

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