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Coinbase CEO Brian Armstrong eased concerns about the company’s stability after Binance announced its FTX acquisition on Twitter.
Armstrong’s tweet covers FTX’s announcement and says he sympathizes with those involved in FTX’s situation.
“Coinbase doesn’t have any material exposure to FTX or FTT (and no exposure to Alameda),” said the Coinbase CEO.
Before the news was released, Binance CEO Changpeng Zhao recently turned down an offer to sell his FTT shares to Alameda Research.
Alameda Research
Alameda Research is a quantitative trading firm that provides liquidity in digital asset markets.
It was founded in 2017 by FTX CEO Sam Bankman-Fried.
In July, Voyager Digital, a bankrupt crypto broker, revealed in a court filing that Alameda owed them $377 million.
Two months ago, Alameda initially agreed to pay Voyager $200.
“I think it’s important to reinforce what differentiates Coinbase in a moment like this,” said Armstrong.
“This event appears to be the result of risky business practices, including conflicts of interest between deeply intertwined entities and misuse of customer funds.”
According to Brian Armstrong, these are behaviors that Coinbase does not tolerate.
He also stated that the company does not transfer money from customers unless they request it and that customers can withdraw their money anytime.
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FTT
Coinbase became a publicly traded company just last year.
However, as a publicly traded company in the United States, Armstrong believes that transparency and trust are essential.
“Every investor and customer can see our public audited financials,” said the Coinbase CEO. “Which shows we hold customer funds.”
“We’ve never issued an exchange token,” Armstrong said.
The CEO referred to the FTT token as collateral for futures positions, trading fee discounts and OTC discounts.
At the time of this writing, the FTT token sells for $4.77, down 67.3% in the past 24 hours.
Read also: Dogecoin value improves thanks to Elon Musk
Cryptocurrency exchanges
According to Brian Armstrong, the problem with cryptocurrency exchanges is that regulators focus on “onshore” while customers go offshore to companies with questionable business practices.
“To take the US as an example,” the Coinbase CEO started.
“95%+ of crypto trading has developed overseas because crypto regulation in the US has been hard to navigate.”
“That’s bad for the US and Americans who are still losing money in these overseas blowups,” he added.
While Binance is acquiring FTX, the deal does not involve its US subsidiaries, Binance US and FTX US.
Reference:
Coinbase CEO says company doesn’t have ‘any material exposure’ to FTX or Alameda
