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Coinbase Discusses Approaches to Transparency, Risk Management, Consumer Protection

Coinbase CFO Aleisa Haas took to the company’s official blog to discuss their approach to matters such as transparency, risk management, and consumer protection.

“First, from day one Coinbase has sought to be the most secure and compliant crypto exchange. And today, Coinbase and our customers are not in any direct danger of liquidity or credit risk. Regardless of whether the Binance/FTX transaction completes, we have very little exposure to FTX and we have no exposure to its token, FTT.  Currently we have $15 million worth of deposits on FTX to facilitate business operations and client trades. We have no exposure to Alameda Research, and we have no loans to FTX. ”

With the boom and bust of the 2022 market driving down platforms, 2023 is likely going to be the most critical time in the industry, especially when it comes to gaming crypto and content creator crypto, as well as emerging industries such as crypto SEO.

Here is what was outlined in the post

  • There can’t be a “run on the bank” at Coinbase. As you can review in our publicly filed, audited financial statements, we hold customer assets 1:1. Any institutional lending activity at Coinbase is at the discretion of the customer and backed by collateral. We have no gating for client loan recalls or withdrawals.

  • We are in a strong capital position. Our public, audited financials confirm that we do not have a liquidity problem – we largely hold our assets in USD. We ended Q3 with $5.6 billion in total available $USD resources, including $5B in cash and cash equivalents.

  • We have an experienced, dedicated risk team. Members of our team have decades of experience managing trading and credit businesses across a range of economic cycles. We’ve also invested in risk management capabilities from the very beginning, with the understanding that effectively managing liquidity, credit and counterparty risk is critical to the financial health of TradFi and crypto companies alike. This blog post details our prudent approach to risk management and how we keep our customers safe.

 

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