After Saying That Coinbase has no exposure to bankrupt crypto firms, Company Shares Jumps 14%.
In a blog post, Coinbase said that it had “no financing exposure” to collapsed crypto firms Celsius, Three Arrows Capital and Voyager Digital.
Each firm filed for bankruptcy protection after a plunge in digital token prices set off a cascade of liquidations in highly leveraged positions.
The firm did, however, make a “non-material” investment in Terraform Labs, the Singapore-based company behind failed stablecoin project Terra.
The Statement is an attempt by Coinbase to reassure investors it won’t suffer the same fate as some of its peers.
As interest rate hikes by the Federal Reserve shook investors in both crypto and stocks, The company’s stock has plunged roughly 70% since the start of 2022.
Ever Since the demise of Terra, a so-called “algorithmic” stablecoin, The crypto market has been in a state of disarray.
This led to liquidity issues at Celsius and 3AC, two companies that made risky crypto gambles using borrowed funds.