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The still nascent crypto industry was dealt another heavy blow last week — with details still being uncovered — of the collapse of once-billionaire whiz kid Sam Bankman-Fried’s FTX crypto exchange platform.
Being one of two publicly traded companies with active crypto exchanges, Coinbase Global Inc COIN falls under scrutiny by shareholders and institutional investors when dramatic events shake the industry, and its CEO Brian Armstrong has the responsibility of easing tensions between those shareholders — he did just that.
Many are still wondering: Is Coinbase safe in the wake of the FTX collapse?
“[Coinbase] is not in trouble,” Armstrong told investors and listeners via Twitter spaces Wednesday. “We’re very well capitalized — we’ve got $5 billion of cash on the balance sheet, [and] we’re holding those assets in dollars so we’re not having exposure to the broader crypto volatility.”
Read Also: ‘We Got Overconfident And Careless’: Sam Bankman-Fried Continues Tweeting
Armstrong cleared the air, adding that Coinbase didn’t have any material exposure to FTX or Alameda Research, and reminded investors to review its audited financial statements which were handled by Deloitte management and consulting.
“Customer funds are segregated,” he said, “that’s an important thing to look at.”
This year, as increasing interest rates and mounting concerns about an economic slowdown battered speculative assets — often married to the dramatic uncovering of many insolvent firms — cryptocurrency companies have been reeling from a significant fall.
Numerous companies in the industry were forced to lay off employees, including key players Voyager Digital, Three Arrows Capital and Celsius Network.
“I think we’ve also been very clear with people out there that for Coinbase, we’re just a very different company than what FTX was,” Armstrong said. “We’re registered right here in the United States. We’re not in an offshore jurisdiction that has light scrutiny.”
FTX was registered in the Bahamas, where lower tax rates, flexibility, and quick business setup process, among other things, are tolerated — whereas there is more scrutiny with U.S. regulations.
“Coinbase is the best in class as a public company — we’ve just met an entirely different standard than what others have been able to do out there,” the CEO said.
COIN Price Action: Shares of Coinbase were down 12.7% Wednesday at market close to trade at $48.83, according to data from Benzinga Pro.
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Image and article originally from www.benzinga.com. Read the original article here.