Coinbase boss says no bank risk after the official application triggers the alarm

The shares of the Coinbase cryptocurrency exchange lost almost a quarter of their value on Wednesday after publishing dark results, while their CEO hurried to dispel unnecessary bankruptcy fears.

The Coinbase share fell by 23 percent after she reported a significant decline in her income, which failed to expect the analysts, as well as a severe decline in the commercial volume in its results for the first quarter on Tuesday.

The bad results together with the concern about a request for admission submitted later that day prompted the CEO Brian Armstrong Condition on Twitter

his comment came after a new disclosure suggested that customers could claim claims against the stock exchange, which triggered the alarm with the users of the stock exchange.

According to the submission, the crypto, the coin base is kept for users, could "be the subject of insolvency proceedings and deal with such customers as our general unsecured creditors". As a result, users could find the platform "riskier and less attractive", which could possibly affect their financial health, the submission says.

Armstrong hurried to calm the users and apologized for not communicating "proactively" when the new wording was added.

2/ We have no risk of insolvency, but we have recorded a new risk factor based on a SEC requirement called SAB 121, which is a newly prescribed disclosure for stock corporations that keep crypto assets for third parties. https://t.co/lwmgb1kfta

- Brian Armstrong - Barmstrong.eth (@brian_armstrong) 11. May 2022

"There are some noises about an disclosure that we have made in our 10Q [Regulatory Filing] Today about how we hold crypto-assets", tweeted Armstrong and added that the stock exchange had changed its conditions to meet a regulatory requirement instead of running the risk, broke.

Analysts from Wedbus found that Coinbase was "filled with cash" and was still investing "aggressively" during the downturn.

In its results for the first quarter, the company reported larger losses than expected from Wall Street-$ 430 million compared to the $ 47 million estimated by analysts-and predicted that the trading volume and the number of users would continue to decrease in the current quarter.

The Coinbase shares have lost 67 percent of their value since the beginning of the year, with their course under $ 100 for the first time since the company's IPO in April last year. At the time of the IPO, the coin base shares were worth $ 381.

The health of Coinbase 'health has long been pursuing the trends on the broader cryptoma markets and benefits from a boom in speculative trade by private investors in the first half of last year. After his debut on the stock exchange, the profits of the company during the Bullenmarkt 2021 exceeded more established stock exchange operators, including CME Group and Intercontinental Exchange.

The latest interest increases, however, caused investors to flee from the most risky corners of the global financial markets, which led to a crypto bear market that was called the latest "crypto winter".

Bitcoin has been a lot lately and fell under $ 30,000 for the first time since July at the beginning of this week, in the middle of wider turbulence on the cryptocurrency markets caused by the collapse of stablecoin terra.

Coinbase also faces regulatory hurdles. During a conversation with analysts on Tuesday, Armstrong said that the company hired its services in India just a few days after the market launch for "informal prints" of the Reserve Bank of India. Armstrong previously had collisions with US supervisory authorities who are currently circle the industry.

Last year he accused the US stock exchange supervisory authority Securities and Exchange Commission a “incomplete behavior” after threatening to sue the company if it would bring a certain credit product onto the market. Coinbase later made plans for the Lend product.

Despite the defeat, Armstrong and other managers repeatedly attempted to assure investors that the downturn could be a chance for the company so that it can concentrate on the diversification of its business, investments in product innovations and the attitude of talents. The company recently introduced a non-fungable token marketplace and examined areas such as crypto derivatives.

Coinbase signed his shareholder letter with #wagmi, a hashtag popular in the crypto community for "We will all make it".