According to a leaked email from Coinbase, the platform will halt its affiliate initiative in the United States on July 19th. The leaked emails highlighted two reasons for the suspension.
They include the state of the crypto market and expectations for the remaining months of 2022. Meanwhile, Coinbase said its affiliate program might return in 2023 but did not give a precise date.
According to Coinbase, the firm did not reach this decision lightly. However, it must stop rewarding businesses promoting its service on their platforms.
Therefore, it urged these affiliates to take Coinbase promotional materials off their websites. Ben Armstrong, also called Bitboy, a crypto analyst, warned users to “tread cautiously.”
In addition, he said Coinbase’s actions could be pointing to an incoming crisis. He also predicted that a Coinbase bankruptcy would completely shake the crypto market.
The Affiliate Program Of Coinbase
Coinbase began its affiliate program in 2019 to increase its user base. It partnered with a company, Impact, to run the affiliate program.
Impact helps Coinbase to connect with influencers, track sign-ups, and manage rates. Once someone becomes an affiliate, they can promote Coinbase platform by including the referral link in their articles.
Additionally, they can create news content and run advertisements on their website platforms. When a user signs with the link, the affiliate receives 50% of their trading commission for three months.
Furthermore, Nate O’Brien, a YouTuber and venture entrepreneur tweeted that he thinks Coinbase’s decision to suspend its affiliate program is a red flag. According to him, this could signal an imminent financial disaster for the firm.
Also, he believes the present cryptocurrency bear market’s expense-cutting measures are to blame. It may be the cause of Coinbase’s refusal to pay the $5 commission to affiliates.
Crypto Firms In Crisis
However, affiliate platforms help companies to increase their user base. This is what Coinbase has done. Coinbase now has over 89 million registered members with a verified email address or phone number.
Coinbase may use the funds from these customers for new marketing initiatives. O’Brien mentioned how the cancellation of Airbnb’s affiliate program led to user reduction on the platform.
Although a bankruptcy crisis is unlikely for Coinbase, weirder events have occurred lately in the cryptocurrency industry. This includes the failure of some popular crypto firms.
It is worthy to say these organizations had risen to stardom during the last crypto bull run. The most popular firms suffering from bankruptcy include Three Arrows Capital, Celsius, and Voyager Digital.
Unfortunately, they have all experienced financial problems in the past months. As a result, the dangers of high-risk and high-yield lending have come to light lately.
In addition to canceling approved job offers and terminating 20% of its employees, Coinbase has also withdrawn its Coinbase Pro program. This program was designed for customers who need technical indicators and other professional functionalities.