Key Takeaways:
- Coinbase insolvency rumors grow.
- The platform debunked bankruptcy talks, saying Coinbase is well-capitalized.
- Italian regulators greenlight Coinbase.
YEREVAN (coinChapter.com) – Is Coinbase going bankrupt? It is not clear. However, rumors have been circulating the web lately that the largest crypto exchange in the U.S. faces insolvency. As CoinChapter reported earlier, the rumors initiated when the platform closed its affiliate program.
Is Coinbase going bankrupt?
In detail, the affiliate program awarded 50% of a referee’s trading commission to the affiliate in the first three months of joining and granted other privileges on the platform.
Many crypto analysts saw the suspension as a “major red flag,” feeding insolvency rumors. However, the debate is ongoing, with many opposing the grim predictions.
After the announcement, $248 million exited the Coinbase Pro in a single day, representing about 50% of all stablecoins in its vault. Moreover, the on-chain analytical platform CryptoQuant reported a decline in Coinbase stablecoin holdings, from an all-time high of $1.2 billion in January 2022 to $284 million as of July 15, 2022.
Also read: Is Coinbase stock COIN a buy amid insolvency rumors? Expert says yes.
The team opposing Coinbase insolvency rumors was active as well. For example, Dan Held, the founder of another crypto exchange Kraken, supported the platform, debunking the liquidity crisis FUD.
So is Coinbase going bankrupt? The CEO, Brian Armstrong, says “no.” He posted a lengthy thread, asserting that the exchange is well-capitalized.
In past downturns we pulled ahead and consolidated share, staying focused while others got distracted. Downturns make the best companies even stronger, and this one will be no exception for us.
posted Armstrong.
He added that Coinbase doesn’t always move the fastest; it is the “safest and most compliant.”
Also read: Ex Coinbase exec sounds alarmed over more ‘crypto winter’ crashes in coming days.
Italy greenlights the platform amid Coinbase insolvency rumors
Despite the FUD, Coinbase was approved by Italian Organismo Agenti e Mediatori (OAM; a consumer protection body) to offer crypto trading custody services and other products in Italy.
Armstrong saluted the news, retweeting a post from Nana Murugesan, the VP of International & Business Development at Coinbase.
Also read: Coinbase stock prices crash near 11% as Goldman Sachs downgrades to ‘sell.’
In detail, only a handful of crypto exchanges have licenses to operate in Italy. Thus, Coinbase henceforth joins the club with the likes of Binance and Crypto.com. Coinbase also asserted that it has customers across almost 40 European countries “through dedicated hubs in Ireland, the UK, and Germany.”
We are in the process of strengthening our presence across Europe and have registrations or license applications in progress in several major markets in compliance with local regulations. […] Our goal is to grow our customer base by launching the Coinbase suite of retail and institutional products.
read the announcement.
