Is Coinbase Going Bankrupt? The exchange will discontinue its US affiliate marketing program
Over the past few months, we have seen some of the biggest digital currency lending platforms and hedge funds collapse. The shocking chain of events has left many wondering, “Who’s next?” As the dominoes continue to fall.
Now, after several worrying red flags, major exchange Coinbase (NASDAQ:COIN) is reportedly shutting down its US affiliate marketing program. This is the latest in a series of moves that has led some to speculate that the exchange is facing a liquidity crisis of its own.
In the past month, Coinbase merged its USD and USDC markets, shutting down Coinbase Pro, and shutting down its affiliate program.
It’s More Than a Year After Selling Insiders $COIN Stock that has completely pitted.
I smell a liquidity crisis.
— Kurt Wukert Jr. | GorillaPool.com (@kurtwuckertjr) 16 July 2022
Why is Coinbase discontinuing its affiliate marketing program?
The revelation that Coinbase is “temporarily closing” its US affiliate marketing campaign came after Business Insider noticed leaked emails from inside the company.
According to the report, Coinbase will close the program on July 19. The firm cited “market conditions and the outlook for the rest of 2022” as reasons for its decision. What conditions is Coinbase referring to? An 80% drop in trading volume, a steep drop in the value of digital currencies and other tokens such as NFTs, and an ever-tighter regulatory loophole undoubtedly play a role.
Analysis: Play it safe and never trust ‘Crypto Brothers’
Coinbase users who have funds on the exchange are debating what to do right now. While some dismiss the idea that the firm may be insolvent, recent events tell us that this false sense of confidence can be fatal. When the same rumors started swirling about Celsius Network and Voyager Digital, people in denial or connecting all the dots dismissed them. This proved to be a costly mistake.
In these situations, it is always best to protect. Companies like Coinbase don’t take their actions in the past few months for no reason. While they can only take prudent action and reduce costs to exit the digital currency winter, they can also be preparing for something that only insiders can see. There’s no way to tell, and so the only sensible decision is to play defense until the scene becomes clear.
Likewise, nothing should stop you from selling your digital currencies and/or taking them off the exchange immediately, as assures Brian Armstrong and his team. Ultimately, the embattled CEO of Celsius Network, Alex Mashinsky, honored the withdrawal hours before suspending him on Twitter to refute rumors of the company’s problems. You cannot trust vested interests in this industry, and therefore any assurances from Coinbase should be taken with a pinch of salt.
The way you look at it, the smart move is to interpret Coinbase’s actions as a sign that something is not right and could soon be overtaken by a potential tsunami of withdrawal requests. In the best case, nothing happens, Coinbase is fine, and you have your own digital asset. In the worst case, you ignore the red flags, Coinbase goes down, and you lose everything like so many others have had in recent weeks and months.
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