In the wake of FTX’s collapse, Coinbase CEO Brain Armstrong has claimed that his firm is not vulnerable to any FTX-type shock or collapse. He also pointed to possible reasons behind FTX’s burnout. In his view, FTX was involved in “conflicts of interest between deeply intertwined entities,” media reports said.
FTX’s insolvency has sent shock waves to crypto players and community members. Noting that the crypto community knew the differences between Coinbase and FTX, Coinbase CEO declared that Coinbase has no “material exposure” to either FTX or Alameda Research.
Also, Coinbase is a publicly traded company and is required to publish financial data under the mandates of SEC regulations. On the other hand, FTX is a privately-held company with no such obligations, he explained.
According to him, the absence of a clear regulatory framework in the United States is the genesis of the problem.
While sympathizing with the affected parties Brian blamed FTX as the architect of its problem.
On-chain data had indicated that fund withdrawals on FTX had not been smooth. FTX paid the price by getting caught in a web of financial crises and huge losses within a few days. FTX’s inability to process customers’ withdrawal requests was the firm’s fault.
Armstrong noted one of the principal causes of the FTX crisis was the misuse of customers’ funds which led to its inability to process withdrawals.
The Coinbase CEO said the event appears to be the outcome of bad business practices, including conflicts of interest between Binance and FTX. Affirming that such a scenario will never play out in Coinbase as it never touches the customers’ fund unless permitted by them.
