Max Krupyshev: “CoinsPaid’s Working Capital Doesn’t Include Customer Funds”
The CoinsPaid ecosystem continues to gain momentum, despite the bears lurking in the woods. This comes at a time when the crypto market is being shaken up by a myriad of recession-derived issues and FTX’s liquidity crunch continues to run rampant.
Regarding the latter, reports about the Ledger Hardware Wallet’s outages have begun to surface. The company’s CTO even confirmed these suspicions over Twitter, citing ‘challenges with scalability’.
Moreover, some stablecoins are struggling to maintain their pegs. According to CoinMarketCap, the rates of TUSD, USDD, and GUSD each suffered a 2–3% deviation from their pegs with the US dollar. Indeed, even the dreadnought of the stablecoin market, USDT, experienced significant price pressure as its cap decreased by $1.5 billion in just 12 hours.
The reasons behind this crisis are clear — the mass selling of assets and fund withdrawals to cold wallets are causing a lack of demand in the market. Our CEO, Max Krupyshev, commented on the stability of CoinsPaid:
“This week has really been a test of strength for the crypto market. Lots of clients are worried about their funds stored in one service or another. For our part, we’d like to assure you that CoinsPaid has achieved such a level of working capacity over the years that allows us to fulfil all our obligations even in such unstable times. We never use customer funds for any investment or trading activities, they’re well protected and stored in our wallets, with “cold storage” being included”.
Max explained that a ‘bank-run’ situation is simply impossible for the company:
CoinsPaid never uses customer funds for any investment activities
FTX has been allegedly using its clients’ money to fund high-risk trading and loan collateralization. CoinsPaid has never and will never follow this path. For our operational activities, we only use the company’s earnings.
CoinsPaid business model is less affected by drawdowns
The payments industry is mostly immune to market changes, as merchants continue to use crypto for fast and low-cost payments. As evidence, CoinsPaid volumes doubled compared to last year despite the crypto winter.
CoinsPaid has enough reserves
Still, to stay on the safe side and protect CoinsPaid and its employees, we have enough reserves and retained earnings to cover the operating costs and salary fund for more than a year. CoinsPaid will soon have its financial audit completed, which we will present to clients and partners, as well as publish in partial form in an open-access manner.
There are several important lessons to learn from FTX’s collapse. First is to never leverage highly volatile assets and take on too much high-risk debt. And second is that companies with stable business models and working risk management will prevail even during the hardest of times.
CoinsPaid continues to operate as normally. Thank you for placing your trust in us.
Stay updated on all news by following our Twitter account: CoinsPaid