Coinbase is so well-known for its top-notch technology as a cryptocurrency exchange that it keeps recording a huge number of transaction made in a day. Although it ranks third in top 10 cryptocurrency exchanges (where Binance and FTX ranks first and second, respectively), the platform distinguishes itself from its competitors by targeting new investors who are not too familiar with what’s going on in the market. With such innovation, Coinbase is recognized as a beginner’s exchange whose interface is simple, providing smooth user experience over time.<img src="https://cdn.builder.news/news/11ed0d902b497cb7a8e6023f659fee92.jpg" alt="Top 3 crypto exchanges" title="Top 3 crypto exchanges" width="600" height="136" class="lykafe0">Source: Coinmarketcap Despite being one of the most prosperous exchanges, Coinbase seems to be severely affected by the recent market turmoil, not to mention the decrease trading volumes, but from inside the project itself proposes worries to the mass, especially who keep loving them since 2012. Negative headlines relating to Coinbase continue to bombard consumers where some keywords like bankruptcy, insolvency, investigation are featured. Followers can find those irritating cause it’s Coinbase, not any low-key exchanges, and they might ask themselves: “What’s wrong with Coinbase? What should they expect?” Let’s find out with <a href="https://www.builder.news/" alt="Builder.news" title="Builder.news" target="_blank" rel="" class="">Builder.news</a>.<h2>Coinbase and “bankruptcy”, “insolvency”, “investigation”</h2>Previously, Coinbase was rather “quiet” except news about staff reduction. This seemed reasonable since at the time of the announcement, cryptocurrency market experience a winter where the overall crypto market cap had lost nearly $2 trillion. However, after Terra collapsed which is followed by that of Three Arrows Capitals, Celsius and Voyager, Coinbase is understandably in target of the mass, especially when they’re having a delayed schedule for launching their affiliate marketing program.<img src="https://cdn.builder.news/news/11ed0d902b4983aaa8e6023f659fee92.jpg" alt="Coinbase affiliate marketing program" title="Coinbase affiliate marketing program" width="600" height="254" class="lykafe1"> The story starts when an email leaked that Coinbase would stop its affiliate marketing program in the US. Market conditions and the prognosis for the remainder of 2022 are cited as justifications for the suspension in the emails issued to three creators. The exchange shared that one of the reasons why they made the decision is because they must stop incentivizing businesses that use incentives on the platform. However, the mass did not take this announcement easily. At that time, people were debating whether this was one in an array of signs that Coinbase is having a liquidity crisis (after Coinbase combined their USD and USDC markets, closed Coinbase Pro). Even worse, people keep repeating “insolvency” was a terrible word tells about Coinbase’s future. On the other hand, a few remained optimistic about the situation and consider the case a FUD method, and provided an explanation for the delay in affiliate marketing program as of cutting off expenses amidst crypto winter.<blockquote class="twitter-tweet">In the last month, Coinbase combined their USD and USDC markets, closed Coinbase Pro and turned off their affiliate program. This is after over a year of insiders selling <a href="https://twitter.com/search?q=%24COIN&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$COIN</a> stock which has absolutely cratered. I smell a liquidity crisis. Where’s the money, <a href="https://twitter.com/coinbase?ref_src=twsrc%5Etfw">@coinbase</a>? <a href="https://t.co/DuoQcwkjsH">pic.twitter.com/DuoQcwkjsH</a>— Kurt | GorillaPool.com 🍌🍌 (@kurtwuckertjr) <a href="https://twitter.com/kurtwuckertjr/status/1548281508447719428?ref_src=twsrc%5Etfw">July 16, 2022</a></blockquote> Things would have stopped there if Coinbase is not involved in other accuses. Coinbase also drew controversy for a disclosure in its quarterly report saying that shareholders could lose the funds they have deposited in the exchange in the event it goes bankrupt. CEO Brian Armstrong tweeted a clarification after the fact, reassuring users that Coinbase has “no risk of bankruptcy” but adding that “it is possible, however unlikely, that a court would decide to consider customer assets as part of the company in bankruptcy proceedings even if it harmed consumers.”Of course, bankruptcy is possible to every financial institution, even national banks. However, the statement from Coinbase’s CEO seemed to make things worse. What else can people think when they come across with a statement that will barely be an encouragement to their “thin” faith? Now, it’s better to take a deep breath and keep watching what’s going on next with Coinbase. And no surprise, Coinbase continues to features in headlines with US regulators.<iframe src="https://www.bloomberg.com/multimedia/api/embed/iframe?id=ace721c2-4648-485a-898b-6146ff9986e5" frameborder="0"></iframe>Coinbase Faces SEC Investigation on Crypto Listings - bloomberg.comIt’s likely that Coinbase is having bad luck now. After the former Coinbase product manager was arrested for insider trading on July 21, the US Securities &amp; Exchange Commission (SEC) accused the exchange of listing nine cryptocurrencies as disguised securities, including AMP, RLY, DDX, XYO, RGT, LCX, POWR, DFX and KROM. At the same time, the world's third largest exchange also faces another charge from the US Commodity Futures Trading Commission (CFTC). This agency called on the SEC to have more regulatory cooperation with them, and affirmed that if the SEC does not conduct an extensive investigation to prove the above 9 coins are securities, the CFTC will handle and investigate the transaction of these coins. Being involved in this situation, Coinbase can’t stop clarifying for themselves. However, it’s also a fact that investors need to take this as a serious problem, to prevent their wallets from being attacked as what Terra did. <h2>Be prepared for anything</h2>In bearish season, Coinbase’s instability bring little positivity in investors’ minds. People might worry about the health of the world's third largest exchange in the context of bearish season when less famous exchanges keep vapouring from the market. As of July 6, the number of crypto exchanges globally stands at 500, down from the highs recorded in previous months. According to data from CoinMarketCap, the number was 525 on June 6, which means that the crypto sector has lost 25 exchanges in just 30 days. The disappearance of crypto exchanges is partly related to the decline in the value of the cryptocurrency market as a whole, as some businesses in the industry are looking for exits. Besides the downturn in the crypto market, exchanges are also affected by other macroeconomic conditions, such as rising inflation that make it more difficult to stay in business.<img src="https://cdn.builder.news/news/11ed0d902b498896a8e6023f659fee92.jpg" alt="cryptocurrency" title="cryptocurrency" width="600" height="400" class="lykafe2"> What if Coinbase will be one of those exchanges, or not that worse, but their assets will be in threats? In a larger scale, what’s happening to Coinbase is adversely influencing the crypto market. The crypto market immediately showed a lack of firmness in the current rally after the Coinbase news went viral. Particularly, the world's largest cryptocurrency Bitcoin fell 5% from $22,100 to $20,970 on the morning of July 26. Meanwhile, Ethereum sometimes lost nearly 10% of its value when it fell from $1,538 to $1,412. The sign of a fragile object is already in its surface. The matter is whether small investors like us take the lesson seriously or not. In order to survive in cryptocurrency, following market news is indispensable and foremost factor. Investors will find valuable information that has huge impact on their decisions as well as outcomes. <div class="pr-block-special">Disclaimer: This article is intended for and only to be used for reference purposes only. No such information provided constitutes advice or a recommendation that any investment or trading strategy is suitable for any specific name.</div>

What's happening to you when Coinbase is facing insolvency rumors and accuses from US regulators.

What left after recent “problematic” headlines around Coinbase?