Coinbase says it has no material exposure to FTX or FTT

Quick Take

  • Coinbase CEO Brian Armstrong says the exchange has no material exposure to either FTX or FTT.
  • Armstrong says FTX liquidity crisis “appears to be the result of risky business practices.”

Coinbase CEO Brian Armstrong aimed to ease jitters triggered by news that FTX would sell its non-U.S. assets to Binance amid a liquidity crunch by saying the exchange he runs has no material exposure to either FTX or its FTT token.

"It's important to reinforce what differentiates Coinbase in a moment like this," he wrote on Twitter. "This event appears to be the result of risky business practices, including conflicts of interest between deeply intertwined entities, and misuse of customer funds."

Armstrong said that Coinbase holds all assets dollar-for-dollar, and he reiterated that users can withdraw funds at any time. 

"We are incorporated in the U.S., and publicly listed in the U.S. because we believe that transparency and trust are so important," he wrote. "Every investor and customer can see our public audited financials, which shows how we hold customer funds. We've never issued an exchange token."

In a separate blog post, Coinbase said that "there can’t be a 'run on the bank'" at the exchange. The company maintained that its capital position is "strong."

Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.

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