The chief executive of Coinbase is making it crystal clear to stakeholders that the top US-based crypto exchange has no investments in its troubled competitor FTX.
Brian Armstrong tells his 1.1 million Twitter followers that Coinbase has zero “material exposure” to crypto derivatives exchange FTX, its native FTX Token (FTT) or its sister company Alameda Research.
Armstrong’s statements come amid the abrupt collapse of the embattled crypto exchange FTX. Its native asset FTT is also in the midst of a total meltdown, plunging nearly 75% in the last 24 hours.
Says Armstrong,
“I think it’s important to reinforce what differentiates Coinbase in a moment like this. This event appears to be the result of risky business practices, including conflicts of interest between deeply intertwined entities, and misuse of customer funds (lending user assets).
Coinbase has always strived to be the most trusted player in the space, and we don’t engage in this type of risky activity.”
The Coinbase executive also highlights that they do not touch customers’ funds unless instructed by customers themselves. He also makes it clear that users can withdraw their funds at any given moment as they hold all assets “dollar for dollar.”
According to Armstrong, FTX’s struggles highlight the need for a more transparent crypto ecosystem.
“Long term, the crypto industry has an opportunity to build a better system with DeFi [decentralized finance] and self-custodial wallets that don’t rely on trusting third parties. Instead, you can trust in code/math and everything can be publicly auditable on-chain.”
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