The announcement of leading crypto trading platform Coinbase suspending its affiliate program has caught the eye of prominent crypto opinion leaders, sparking insolvency rumours in the midst of a broader liquidity crisis in the sector.
However, many – including the company’s CEO – have come out in support of the company.
Upon being on-boarded to Coinbase’s soon-to-be cancelled affiliate program, affiliates gain access to earning commissions from creating their own content, and Impact tracking software. The affiliate program’s suspension will be effective from July 19.
Coinbase just shut down their entire affiliate program. This is a MAJOR red flag. I fear that a liquidity crisis is on the horizon.
— Nate O'Brien (@nateobrienn) July 15, 2022
Influencers in the crypto sphere have been fearing that Coinbase’s decision to cancel the program is a “major” red flag, and is one that was made in order to cut costs during the current brutal crypto bear market. In the past few months, the crypto space has been rocked with lenders such as Voyager, Celcius, and Vauld falling victim to the dangers of high-yield, high-risk lending practices.
Coinbase shut down their affiliate program and are getting rid of CoinBase pro. Recent history would suggest there could be trouble ahead for CB so tread lightly.
If Coinbase were to go insolvent, this would break crypto the crypto space like we have never seen before.
— Ben Armstrong (@Bitboy_Crypto) July 16, 2022
The cancellation of the Coinbase affiliate program has come after the company laid off 20% of its workforce in June, as well as arescinding job offers for potential employees, and phasing out their Coinbase Pro program later this year, aiming to merge Pro features into its consumer app.
Coinbase has cited that current market conditions have caused it to arrive at this decision, saying that it cannot continue rewarding incentivised business on the platform for the time being. Coinbase says that it will resume its affiliate program in 2023, but no firm date has been announced.
No, Coinbase doesn't have a "liquidity crisis" bc they shut down their affiliate program 🙄
— Dan Held (@danheld) July 16, 2022
Dan Held, CEO of crypto exchange Kraken, tweeted that the suspension of an affiliate program is not an indicator of a liquidity crisis. Other crypto influencers have noted that industry leaders and institutional crypto adoptees would not allow a Coinbase collapse to happen.
A Coinbase Bankruptcy must be avoided AT ALL COSTS, b/c if depositors lost all or part of their money or crypto, we simply cannot overestimate the fallout. Perception becomes reality and what a Coinbase bankruptcy would symbolize regarding adoption cannot be overstated.
— John E Deaton (206K Followers Beware Imposters) (@JohnEDeaton1) July 16, 2022
It can be seen that in these current market conditions, Coinbase would redirect such funds for affiliate payouts to further grow its user base, and to invest in new marketing activities and channels.
1. Well capitalized.
In past downturns we pulled ahead and consolidated share, staying focused while others got distracted. Downturns make the best companies even stronger, and this one will be no exception for us.
— Brian Armstrong – barmstrong.eth (@brian_armstrong) July 15, 2022
Coinbase CEO Brian Armstrong has tweeted that insolvency is not in sight, as the exchange has experienced massive growth in 2021, and is expecting more. However, Armstrong notes that while the crypto industry in any given year can grow ‘300-500% or -50%,’ Coinbase is strategically using these down market periods to keep building and shipping products.