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Coinbase says it has always been keenly interested in asset security and regulatory compliance.
American exchange Coinbase has attempted to douse the fears of its customers amid the rising tension caused by the liquidity struggles of the past few days. To this end, the firm clarified via a blog post, how its business remains in good standing.
Customers In No Direct Danger of Liquidity, says Coinbase
In the blog post, Coinbase began by mentioning how it has always been keenly interested in asset security and regulatory compliance. It believes that its interest in both is why its customers are safe from any form of credit risks today.
The revelation follows after giant exchange FTX filed for chapter 11 bankruptcy last week. Meanwhile, as is commonly seen, when big firms such as FTX collapse in such a manner, it is only expected to have liquidity issues spring up in other firms that may have been exposed to them. But in this case, Coinbase insists that it has only a little exposure to FTX. Per the blog post, it is in fact, not in any way exposed to FTX’s token, the FTT. The US-based exchange says it has $15 million worth of deposits on FTX at the moment. However, it owes no loans to FTX and has no exposure to its trading arm, Alameda Research.
In a further attempt to assure its clients, Coinbase also boasted of its financial strength. The exchange claimed that a large portion of its assets are held in USD, and said:
“We ended Q3 with $5.6 billion in total available $USD resources, including $5B in cash and cash equivalents.”
Furthermore, Coinbase also mentioned its risk management team and how it invested heavily in it. It says the team is made up of members that have gained a great wealth of experience in various kinds of economies. And insists that they have developed an effective way to manage liquidity and credit risks alike.
Overall, Coinbase believes that strong and clear regulatory standards have once again been proven to be extremely important. This is what it says it has paid attention to and will continue to work with, to ensure that customers’ assets remain safe.