Coinbase Denies Exposure to Failed Crypto Firms Celsius, 3AC, Voyager
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The company said,
"Many of these firms were overleveraged with short-term liabilities mismatched against longer duration illiquid assets."
Coinbase Says No Credit Exposure
While Coinbase denied having any credit exposure to Celsius, 3AC, and Voyager, it claims that through its venture capital business, it did make "non-material investments" in Terraform Labs. Coinbase is using the update to convince investors that it won't go the same way as some of its competitors.
Since the beginning of 2022, the company's stock has fallen about 70% as the Federal Reserve's interest rate increases spooked investors in equities and cryptocurrencies. The cryptocurrency market has been in chaos since the death of the so-called "algorithmic" stablecoin, Terra. Celsius and 3AC, two businesses that made risky crypto bets using borrowed money, resulted in liquidity problems.
Investors wanted to withdraw their money from companies like Celsius and 3AC when the value of cryptocurrencies started to plummet this year. However, a decline in the value of the assets held by these corporations made it impossible for them to fulfill the redemption demands. Because of this, Celsius, Voyager, and other companies stopped making withdrawals before ultimately seeking bankruptcy protection.
