Coinbase jumps 14% after saying it has no exposure to bankrupt crypto firms

Coinbase said it had no counterparty exposure to several collapsed crypto firms, seeking to allay fears about the impact of a liquidity crisis in the industry on its business.

Coinbase “had no financing exposure” to Celsius, Three Arrows Capital and Voyager Digital, the company said in a blog post Wednesday. Each firm filed for bankruptcy protection after a plunge in digital token prices set off a cascade of liquidations in highly leveraged positions.

Shares of the company closed up more than 14% on Wednesday.

“Many of these firms were overleveraged with short-term liabilities mismatched against longer duration illiquid assets,” the company said.

“We have not engaged in these types of risky lending practices and instead have focused on building our financing business with prudence and deliberate focus on the client,” it added.

Source: https://www.cnbc.com/2022/07/20/coinbase-says-has-no-exposure-to-collapsed-crypto-firms-celsius-3ac.html