Moody’s has once again downgraded the long-term credit rating of the cryptocurrency exchange Coinbase, as well as the rating of the company’s unsecured bonds.
Moody’s has advised the financial community that after reviewing Coinbase’s current performance, it is forced to downgrade the exchange’s long-term credit rating (CFR) and its bond rating to non-investment grade B2 again.
“The downgrade reflects a significant weakening in Coinbase’s revenue in 2022 and its inability to generate sufficient cash flows due to difficult conditions in the crypto asset operating environment, characterized by sharp price drops and reduced customer trading activity. Coinbase’s profitability remains in question despite its announcement of 950 layoffs,” Moody’s said in a statement.
Another factor that contributed to the downgrade of Coinbase was the legal uncertainty regarding the possible adoption by the state of new legislative adjustments caused by the collapse of FTX. The agency said the sudden tightening of regulations and related oversight could have a material negative impact on Coinbase’s creditworthiness.
In early January, Coinbase announced that it was phasing out its business in Japan.
Source: Bits
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