Coinbase, one of the biggest cryptocurrency exchanges in the world, is currently down and experiencing network issues.
While connectivity issues have happened in the past, today’s problems spark more debates given the recent events that have happened in the crypto market.
First and foremost, the tensions between two other major exchanges, Binance and FTX, caused a lot of FUD in the market. The tension started as a result of a financial leak between FTX and Alameda Research. The leak showed that FTX lacks solvency and may face liquidity issues. Binance then reacted by deciding to get rid of the FTT tokens holdings to reduce any risks of FTX potentially crashing.
Shortly after, FTX apparently asked Binance for help, and Binance opted to buy FTX in order to help them get over liquidity issues, while also substantially increasing Binance’s market share. Nonetheless, because of the FUD caused, the price of FTT has been drastically declining in the last few days.
Many other events led to increased activity in the crypto space. Here is just a brief list of what has happened in the last 24 hours:
Why is Coinbase Down?
Given the FUD caused in the market, and with the falling price of BTC, which is currently testing new lows, there were substantial withdrawals from the Coinbase exchange. In just the last 24 hours, more than $400 million worth of USDT alone was withdrawn from Coinbase.
Moreover, Coinbase joins the list of large companies that are having huge layoffs in the workforce as a means to reduce company costs and have higher liquidity.
According to the Kobeissi Letter, Coinbase has laid off 18% of its workforce in the last 30 days. For some, that could be a red flag alone.
Moreover, BaFin, the Federal Financial Supervisory Authority of Germany, recently stated that Coinbase’s arm in Germany has not been working in accordance with the rules and regulations of the banking and financial system of Germany. Hence, BaFin ordered Coinbase to effectively start and comply with certain protocols.
Lastly, the recent network issue could be connected to the large amounts of withdrawals in the last 24 hours. Nonetheless, Coinbase is currently working on the issue.