- Coinbase CEO Brian Armstrong addresses the concerns surrounding the crypto custodial and storage facilities.
- Coinbase reports disappointing results for Q1 2022 citing market volatility resulting in COIN stock taking a heavy beating
Coinbase CEO Brian Armstrong recently released an explanation over concerns about bankruptcy. Denying any such possibility, Armstrong said there is “no risk of bankruptcy” while addressing concerns about the crypto storage facility.
Attention @coinbase customers
If this does not fully disclose the scam that is Coinbase, then nothing will
1. You buy and hold $BTC on Coinbase @GDAX_Support
2. Coinbase goes bankrupt
3. Your Bitcoins no longer belong to you
Close your accounts and flee https://t.co/1PR5QIVFi5
— Peter Brandt (@PeterLBrandt) May 11, 2022
On Tuesday, May 10, Coinbase (NASDAQ: COIN) declared its first-quarter results. As Coinbase shared its 10Q on Tuesday, investors’ expressed concerns about how the largest exchange in the U.S. stores digital assets. As per the SEC requirement, Coinbase has included a new risk factor dubbed SAB 121. This is a newly required disclosure for public companies holding crypto assets on behalf of third parties.
Armstrong said that even during the “black swan” events like the current one, Coinbase has strong legal protections to protect the assets of its Prime and Custody customers. The crypto exchange is taking additional steps to update the user terms for its retail customers. Apologizing further, the Coinbase CEO said:
We should have updated our retail terms sooner, and we didn’t communicate proactively when this risk disclosure was added. My deepest apologies, and a good learning moment for us as we make future changes.
Coinbase CEO also said that customers are free to choose self-custodian wallets to store the digital assets themselves. “We’ll continue working to improve customer protections in all our products across both categories,” he added.
1/ There is some noise about a disclosure we made in our 10Q today about how we hold crypto assets. Tl;dr: Your funds are safe at Coinbase, just as they’ve always been.
— Brian Armstrong – barmstrong.eth (@brian_armstrong) May 11, 2022
Coinbase revenue drops 27% in Q1 2022
The largest cryptocurrency exchange in the U.S. disappointed after announcing its first-quarter results. The company reported revenue of $1.17 billion, 27 percent lower than the market expectations. Also, the loss per share stood at $1.98.
The Coinbase stock (NASDAQ: COIN) has been on a freefall ever since March and corrected by 70 percent just over the last month. The COIN stock is down nearly 80 percent from its all-time high of $357 last November 2021. On Tuesday, COIN stock tanked 12.60 percent. It tanked an additional 15 percent in aftermarket hours.
Crypto exchange Coinbase is facing the heat on multiple fronts. The total trading volume for Coinbase dropped from $547 billion in Q4 2021 to $309 billion in Q1 2022. At the same time, the retail monthly transaction users (MTUs) fell to 9.2 million, down from 11.4 million in the previous quarter. In its letter to shareholders, Coinbase wrote:
The first quarter of 2022 continued a trend of both lower crypto asset prices and volatility that began in late 2021. These market conditions directly impacted our Q1 results. We believe these market conditions are not permanent and we remain focused on the long-term.
While we continue to invest and enhance our core investment platform, the application era of crypto is upon us, led by NFDs and decentralized finance, and we are increasingly focusing our efforts on these market opportunities.
Other company executives said that Coinbase has been investing in compliance. Further, it will continue to invest in growth as well as diversify its product line.
Related: Coinbase revises listing protocols after accusations of insider trading with its latest altcoin listing
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