Leaked emails suggest that Coinbase is suspending its affiliate marketing program in the United States on July 19.
The emails sent to three creators cite market conditions and outlook for the rest of 2022 as reasons for the suspension. While not committing to a specific date, Coinbase said it would resume its affiliate program in 2023.
Coinbase said it did not arrive at this decision lightly but cannot continue rewarding incentivized business on its platform. It advised its affiliates to remove promotional content from their websites.
Crypto pundit Ben Armstrong, also known as Bitboy, said that Coinbase’s actions might spell trouble and advised 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 material and can advertise Coinbase via links in articles, new content, and advertisements on their websites. Coinbase’s affiliate program awarded 50% of a referee’s trading commission to the affiliate in the first three months of joining the program.
Personal finance YouTuber and venture capitalist Nate O’Brien said on Twitter that he fears Coinbase’s suspension of the affiliate program is a “major” red flag, warning of an impending insolvency crisis. He opines that Coinbase’s unwillingness to pay $5 to an affiliate may be the result of cost-cutting in the current crypto bear market.
However, as one Twitter user, cryptogemguy, observed, affiliate programs involve spending money to grow a user base. Coinbase has grown its user base to 89 million registered users with a validated phone number or email address.
Cryptogemguy says that Coinbase could use the money for new marketing campaigns. He pointed out that Airbnb’s shutdown of its affiliate program resulted in user discounts.
Anything is possible
Bitboy said that while an insolvency crisis is improbable, stranger things have recently happened in the crypto space, including the collapse of some well-established crypto institutions that rode the last bull run to crypto superstardom.
The Grim Reaper of bankruptcy has visited crypto lenders Voyager Digital and Celsius and hedge fund Three Arrows Capital as the perils of high-yield, high-risk lending became apparent in recent months.
Coinbase has laid off 20% of its workforce, rescinded accepted job offers, and retracted its Coinbase Pro product geared toward those with technical analysis and other professional features.
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