The emails sent to three creators mention that market conditions and outlook for the rest of 2022 are reasons for the suspension. While not committing to a specific date, Coinbase stated that its affiliate program would resume in 2023.
This was not an easy decision for Coinbase, the company stated. However, it cannot continue rewarding incentivised businesses on its platform. Coinbase’s affiliates are advised to remove promotional content from their websites.
Coinbase’s actions, according to cryptocurrency pundit Ben Armstrong, also known as Bitboy, may spell trouble and advise followers to “tread lightly,” adding that a Coinbase insolvency would shake the market to its core.
Coinbase’s affiliate program
When onboarded, affiliates get access to promotional materials and can promote Coinbase via links in articles, new content, and advertisements on their websites. Coinbase’s affiliate program paid the affiliates 50% of the referee’s trading commission in the first three months after joining the program.
Personal finance YouTuber and venture capitalist Nate O’Brien said on Twitter that he believes Coinbase’s suspension of the affiliate program is a “major” red flag signaling an impending insolvency crisis. He believes Coinbase’s refusal to pay $5 to an affiliate is due to cost-cutting during the current crypto bear market.
However, as one Twitter user, cryptogemguy, pointed out, affiliate programs are about spending money to grow a user base. Coinbase now has 89 million registered users who have a valid phone number or email address.
According to Cryptogemguy, Coinbase may use the funds for new marketing campaigns. He noted that Airbnb’s shutdown of its affiliate program resulted in user discounts.
Everything is possible.
While an insolvency crisis is unlikely, stranger things have happened in the crypto space recently, including the collapse of some well-established crypto institutions that rode the last bull run to crypto superstardom, according to Bitboy.
It’s been a rough few months for high-yield, high-risk lenders like Celsius, Voyager Digital and Three Arrows Capital, who have all been forced to file for bankruptcy.
Coinbase has laid off 20% of its workforce, rescinded accepted job offers, and retracted its Coinbase Pro product, which was designed for customers who want technical analysis and other professional features.