Coinbase CEO Brian Armstrong allayed concerns about the company’s stability after Binance announced its takeover of FTX on Twitter.
Armstrong’s tweet covers FTX’s announcement and says he has a lot of sympathy for those involved in FTX’s current situation.
“Coinbase doesn’t have any material exposure to FTX or FTT (and no exposure to Alameda),” said the Coinbase CEO.
Recently, before the news broke, Binance CEO Changpeng Zhao refused an offer to sell his FTT holdings to Alameda Research.
Alameda Research, a quantitative trading firm that provides liquidity in digital asset markets, was founded in 2017 by FTX CEO Sam Bankman-Fried.
Recently, in July, Voyager Digital, a bankrupt crypto broker, revealed in a court filing that the trading company owed them $377 million.
Additionally, two months ago, Alameda initially agreed to pay Voyager $200.
“I think it’s important to reinforce what differentiates Coinbase in a moment like this,” said Armstrong.
“This event appears to be the result of risky business practices, including conflicts of interest between deeply intertwined entities and misuse of customer funds.”
According to Brian Armstrong, these are behaviors that Coinbase does not adopt.
He also said the company does not transfer customer funds unless they request it and that customers can withdraw their funds at any time.
Coinbase became a publicly traded company in 2021.
However, as a public company in the United States, Armstrong believes that transparency and trust are essential.
“Every investor and customer can see our public audited financials,” said the Coinbase CEO. “Which shows we hold customer funds.”
“We’ve never issued an exchange token,” Armstrong said.
The CEO referred to the FTT token, which serves as collateral for futures positions, trade commission discounts and OTC discounts.
At the time of this writing, the FTT token is selling for $4.77, down 67.3% in the past 24 hours.
Brian Armstrong says the problem with cryptocurrency exchanges is that regulators focus “onshore” while customers move offshore to companies with questionable business practices.
“To take the US as an example,” the Coinbase CEO started.
“95%+ of crypto trading has developed overseas because crypto regulation in the US has been hard to navigate.”
“That’s bad for the US and Americans who are still losing money in these overseas blowups,” he added.
While Binance is in the process of acquiring FTX, the deal does not include its US subsidiaries, Binance US and FTX US.