Credit ratings agency Moody’s has downgraded the Corporate Family Rating (CFR) and guaranteed senior unsecured notes of crypto exchange Coinbase, and stated that both ratings have been placed under review for further downgrade.

The CFR, a rating assigned to reflect Moody’s opinion of a company’s ability to honor its financial obligations, was downgraded from Ba2 to Ba3 which is considered as below non-investment grade.

Senior unsecured notes are a type of debt a company holds that is not backed by any assets and in the event of bankruptcy must be repaid before any others. Moody’s downgraded Coinbase’s from Ba1 to Ba2.

Earlier in May, Cointelegraph reported Coinbase’s junk bonds tanked in response to an underwhelming first quarter and since the report, the bonds have continued to fall a further 9.5%.

In its rationale for the downgrades, Moody’s highlighted Coinbase’s revenue model “is tied to trading volumes, transaction activity per user and overall crypto asset prices.” It said the steep price decline in crypto over the past months has caused customer trading activity to wane, which in turn caused weaker revenue and cash flow to the company.

The uncertain environment forced Coinbase to layoff about 18% of its staff on June 14. But even with this measure, Moody’s said it expects Coinbase’s profitability to “remain challenged in the current environment”.

Competition for customers has also been heating up in the United States after Binance.US began offering zero-fees spot trading for Bitcoin (BTC). The offer follows in the footsteps of trading platform Robinhood which pioneered no-commission crypto-trading in 2018.

In a bid to attract users to the platform, on June 23 Coinbase added five new Ethereum (ETH) ERC-20 tokens plus the