By Richard Hines
There are rumors that Coinbase may suffer the same fate as FTX. However, Brian Armstrong, CEO of Coinbase, has come to clear this rumour, that his exchange is not as vulnerable and volatile as FTX, and that the way his exchange is run makes it less prone to incidents like this one.
How Coinbase Business Operation Are Run
Brain stated that one thing that distinguishes his exchange from FTX is the type of business they conduct, stating that his exchange is not involved in risky operations or businesses.
He did, however, express sympathy for the recent incident involving FTX and everyone involved, particularly those who lost funds and investments. On Tuesday morning, FTX halted withdrawals for several hours, and this remains the case to this day; investors are unable to withdraw their funds.
After the withdrawal pause, FTX CEO Sam Bankman-Fried assured investors on Twitter that their assets were secure and that the withdrawal rate would return to normalcy soon. However, Sam announced the next day that FTX was experiencing liquidity as a result of the pool of withdrawal requests and required the assistance of Binance to help maintain this situation.
This event with the liquidity in FTX confirmed Brian’s statement, in which he stated that this happened because FTX was involved in risky businesses that included breach of contract, misuse of consumer funds, and allegations of siding with regulatory bodies to impose regulations on exchanges and crypto communities.
In contrast, Coinbase does not perform any of these activities or touch consumer funds unless authorized by the consumer, which is why they were confident in debunking any rumour of them trailing in the same path as FTX.
Coinbase Has No Connection To The FTX Case
Coinbase has always made it a point to dispel such rumors whenever an exchange is liquidated due to risky businesses, liquidation, or something similar.
It clarified that it had no connection to FTT, FTX, or the Alameda company. It has never issued a similar token exchange and conducts public financial audits to demonstrate transparency and keep user funds secure.
Brain believes that the foundation of the problem is a lack of regulations in the crypto space in the United States. We need regulatory bodies to develop reasonable regulations that will guide exchange activities while remaining level-headed enough not to interfere and disrupt business, according to Brian.
He believes, however, that DEFI will be the savior, assisting in the mitigation of associated risks with third parties. However, DEFI is more vulnerable to attacks, as a total of $3 billion has been stolen from DEFi this year alone.