Coinbase’s decision to suspend its affiliate program has led to rumors that the exchange may be facing a liquidity crunch.
The crypto community is divided in opinion as some believe the suspension of the affiliate program could be an indication that the company was insolvent.
CoinGeek media personality Kurt Wuckert Jr tweeted that this could mean a liquidity crunch as the exchange shut down “Coinbase Pro” and “affiliate program”.
Wuckert isn’t the only crypto influencer with such opinions, as Nate O’Brien and BitBoy shared their views on what could be an incoming liquidity crunch.
BitBoy tweeted that a Coinbase insolvency would “smash crypto from the crypto space like we’ve never seen before.”
Meanwhile, there are those who claim that current opinions are just FUD. A Twitter user pointed out that it’s normal for companies to cut costs during a recession.
Dan Held of Kraken said that an affiliate program closing is not a sign of a liquidity crisis.
Others also backed it up, with NJ Skoberne tweeting, that “the shutdown has nothing to do with liquidity.”
Crypto YouTuber jungleincxrp also tweeted that Coinbase has about $6 billion in cash and large crypto reserves. But added that he had taken all of his assets off the exchange.
Crypto attorney John Deaton believes industry leaders will “NEVER allow a Coinbase bankruptcy” due to the domino effect such an event will have on the crypto industry.
Coinbase CEO Brian Armstrong tried to quell the rumors by saying the exchange is well capitalized and still has a lots of growth to absorb after a massive spread in 2021.
The recent liquidity crunch in the crypto industry has already claimed the lives of three major companies and left thousands of consumers with billions in losses.
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