Current market downturn strongly destabilises crypto exchanges positions. Problems vary from regulation issues to liquidity shortages. Even the biggest players are affected.
According to some sources one of the world’s biggest cryptocurrency exchanges, Coinbase is facing a liquidity crisis following leaked emails. Business Insider shared this piece of news but there was no official confirmation from the company. The publication also revealed that the exchange will temporarily shut down its affiliate program.
At the same time Coinbase says that it “had no financing exposure” to newly bankrupt firms, including Celsius Network, Voyager Digital, and Three Arrows Capital which also claimed to have not enough liquidity. According to the company representative “The issues here were foreseeable and actually credit-specific, not crypto-specific in nature” ******and this is not the case for Coinbase.
The exchange is now looking for expansion in Europe. Coinbase is seeking licences in Spain and France and it has just obtained regulatory approval to offer crypto services in Italy. Perhaps it has taken into account the experience of its peers: the central bank of the Netherlands has fined Binance $3.35 million for offering crypto services while not being registered with the authority. Now Binance has submitted an application and the registration process has started.
By the way, Coinbase recently got involved in the first ever case of insider-trading in digital coins when a former employee was caught leaking information to help his brother and a friend buy tokens just before they were listed on the exchange.
So many things are going on with exchanges now… It is difficult to say if companies are really doing fine or just putting on a brave face, but it is obvious that currently crypto exchanges are facing challenging times.