Coinbase, a cryptocurrency exchange listed on Nasdaq, announced Wednesday that it has no risk-free exposure for bankrupt crypto firms such as Celsius, Three Arrows Capital and Voyager Digital.
Coinbase’s stock price soared 14.34% upon the news and closed at $75.27.
However, the stock price of the company has dropped by 70% since the start of the year.
Coinbase discredits any credit risk exposure to Celsius or 3AC. Voyager is explained:
“We have not engaged in these types of risky lending practices and instead have focused on building our financing business with prudence and deliberate focus on the Client.”
The company, however, revealed that it had made an “immaterial purchase” in Terraform Labs via its venture capital division. Terraform Labs was the developer of the failed stablecoin Terra.
Terra was disrupted by the events of Terra and this ushered in a crypto-winter, which saw manyses disappear.
Terraform Labs has many companies affiliated, including Three Arrows Capital (3AC). The collapse of LUNA coins and UST coins led to the demise of the crypto hedge fund.
Due to liquidity problems, the three mentioned companies have filed for bankruptcy protection. Coinbase commented, “Many of these firms were overleveraged with short-term liabilities mismatched against longer duration illiquid assets.”
Coinbase promised investors it would not experience the same fate.
Genesis Capital, a digital asset lender, announced it would sell its collateral to protect against bad debt risks in the event that Three Arrows Capital fails on its margin calls.
Blockchain.com, a cryptocurrency exchange, may sustain losses of $270 millions due to Three Arrows Capital’s inability to pay loans. This is due to Three Arrows Capital being liquidated.
Coinbase Global Inc, a Nasdaq listed cryptocurrency exchange, announced two days ago that it had tapped a new licence from the Organismo Agenti e Mediatori (OAM), the Italian market regulator.
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