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Something’s amiss at the largest US-based crypto exchange Coinbase, but it’s not yet clear whether that means the company is insolvent, as the rumors circulating across the cryptosphere imply.

Coinbase, which CEO Brian Armstrong helms, is winding down its affiliate market program in the United States, according to a report by Business Insider.

The publication reported emails from three different creators revealing that the leading crypto exchange will temporarily shut down the program on July 19.

Coinbase allegedly cited the current crypto market conditions and the overall negative outlook for the rest of this year as the rationale behind this decision. Although it did not provide an exact timeline, the company hopes to relaunch the affiliate platform in 2023.

Crypto YouTuber and BitBoyCrypto founder Ben Armstrong cautioned investors that recent history suggests there could be trouble brewing for Coinbase, so they should “tread lightly.”

Other crypto observers agree that all this, coupled with the fact that Coinbase is also planning to shut down its professional trading platform, Coinbase Pro, are major red flags. The exchange could be drifting dangerously close to a liquidity crisis.

Despite launching five whole years before the world’s biggest crypto exchange, Binance, and seven years before its swiftly advancing rival, FTX, Coinbase has lost market share and relevance within the industry.

Though the exchange went public in 2021 in what was described as a huge milestone for the crypto sector, its share prices have tumbled by over 83% since peaking at around $355. In late June, Goldman Sachs downgraded its recommendation on Coinbase from “neutral” to a “sell” due to the crypto meltdown and the ensuing fall in revenue.

It’s worth noting that Coinbase also laid off 18% of its workforce in June to ensure its survival. To make matters worse, the exchange’s non-fungible tokens (NFT) marketplace has been a huge disaster since its launch three months ago.

That said, if Coinbase becomes insolvent, Ben Armstrong concluded, it would “break the crypto space like we have never seen before”.

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