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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 notified 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 of Coinbase's earnings in 2022 and its inability to generate sufficient cash flows due to the challenging conditions in the cryptoasset 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 concluded.
Another factor influencing the downgrade of Coinbase's rating 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 oversightcould have a material adverse effect on Coinbase's creditworthiness.
In early January, the Coinbase exchange announced that it was gradually winding down business in Japan.
