Coinbase soars 20% as the exchange says it has no exposure to bankrupt firms struggling through crypto winter

• Coinbase soared as much as 20% on Wednesday after saying it did not have exposure to bankrupt crypto firms.
• In a blog post, the crypto exchange said it had no financial risk from platforms like Celsius, Three Arrows or Voyager Digital.

Coinbase stock jumped Wednesday after the crypto exchange said it was not $4, three major crypto players in the midst of bankruptcy proceedings.

Shares soared as much as 20% to an intraday high of $79.00 before paring gains to 11% in midday trading.

In a blog post written by four executives, the company assured its customers of the safety of its platform through its risk mitigation protocols.

"Solvency concerns surrounding entities like Celsius, Three Arrows Capital (3AC), Voyager, and other similar counterparts were a reflection of insufficient risk controls, and reports of additional struggling firms are fast becoming stories of bankruptcy, restructuring, and failure," Coinbase said.

The problems were more related to their credit arrangements, not cryptocurrencies, it added, noting that many firms were overleveraged with short-term liabilities mismatched against longer-duration assets.

"We believe these market participants were caught up in the frenzy of a crypto bull market and forgot the basics of risk management," the company said.

The three troubled crypto players filed for bankruptcy within weeks of each other amid the crypto market crash earlier this year.

Hedge fund Three Arrows defaulted on a $4, after loaning out $1.2 billion in total despite holding only $685 million in assets. Voyager later filed for bankruptcy with only $4, as did crypto lender Celsius, which had an even steeper ratio of $4 and only $170 million in assets.

But Coinbase said it $4, noting it didn't lend out deposits unless instructed by customers. It also requires collateral of more than 100% of a loan and claims to hold deposits at a 1:1 ratio.

The recent string of crypto collapses has renewed calls for the government to crack down with regulations. US Senator $4 that she was "ringing the alarm bell on crypto," urging regulators to enforce stricter rules and protect investors.

"Ultimately, it may still take time for the broader industry to learn the right lessons from the systemic deficiencies we have seen," Coinbase said.