On Twitter, the CEO of Coinbase discussed how Coinbase differs from other crypto exchanges, as well as Binance’s acquisition of FTX and its impact on Coinbase.
The things that set Coinbase apart from others
As he discussed in his lengthy tweets, Coinbase CEO made an important point about what sets the exchange apart from competitors in such a challenging environment, referring to the FTX situation.
“I think it’s important to reinforce what differentiates Coinbase in a moment like this. This event appears to be the result of risky business practices, including conflicts of interest between deeply intertwined entities, and mis-use of customer funds (lending user assets),” he tweeted.
7/ Part of the issue here is that regulators have been focused onshore in each of their respective markets, while customers have moved offshore to companies with more opaque and risky business practices.
— Brian Armstrong (@brian_armstrong) November 8, 2022
He explained that Coinbase has always sought to establish itself as the most trusted player in the market, and it does not engage in risky activities of this type. Users can withdraw their money at any time, and they hold all assets dollar for dollar and don’t do anything with their funds unless instructed by them.
“We are incorporated in the US, and publicly listed in the US because we believe that transparency and trust are so important. Every investor and customer can see our public audited financials, which shows how we hold customer funds. We’ve never issued an exchange token,” he further explained.
Coinbase doesn’t have exposure to FTX
Concerning his firm’s exposure to FTX in light of the announced Binance acquisition of FTX, the CEO said he has a great deal of sympathy for everyone involved in FTX’s current situation.
“First off, I have a lot of sympathy for everyone involved in the current situation with FTX – it’s stressful any time there is potential for customer loss,” Armstrong said on Twitter.
According to him, Coinbase is not exposed to FTX, FTT, or Alameda in any material way. Previously, Binance CEO Changpeng Zhao declined Alameda Research’s offer to sell Binance’s FTT holdings for an OTC deal yesterday, prior to Binance’s acquisition of FTX.
A quantitative trading firm that provides liquidity in the digital asset market, Alameda Research was founded by FTX CEO Sam Bankman-Fried in 2017.