Ratings agency Moody's said Thursday that it downgraded US crypto exchange Coinbase's senior unsecured notes.
Specifically, Moody's said it "downgraded Coinbase Global, Inc.'s (Coinbase) Corporate Family Rating (CFR) to Ba3 from Ba2 and downgraded its guaranteed senior unsecured notes to Ba2 from Ba1."
"The ratings were placed under review for further downgrade," the agency added.
The Baa3 rating refers to a "moderate" degree of credit risk and represents the lowest level of institutional-grade creditworthiness.
In its explanatory note, Moody's highlighted:
"...Coinbase's substantially weaker revenue and cash flow generation due to the steep declines in crypto asset prices that have occurred in recent months and reduced customer trading activity. Moody's expects the company's profitability to remain challenged in the current environment despite its 14 June announcement of a reduction in its global workforce of around 1,100 employees."
On the question of how it will assess Coinbase's ratings moving forward, Moody's said it would weigh factors like expenses, regulatory developments and the overall state of the crypto market as it relates to the exchange's volume and revenues.
Coinbase's stock price closed at $58.88 on Thursday, up 13.43%.
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