Accusations and denials – The rumors travel fast in the cryptosphere, especially when they are broadcast by the mainstream media. But the limit between ladle Y fake news it is often very thin. In the case of the latest Wall Street Journal (WSJ) complaints against base of coins, it’s still hard to say which side we’re on exactly. Easy FUD or disclosure of a scandal potential ?
Would Brian Armstrong’s company have used its own funds to trade cryptos?
the several regulators examine very close to the group behind the crypto exchange base of coins, especially since its IPO (COIN shares). In a publication As of September 22, the Wall Street Journal accuses Coinbase Global Inc. of hiring traders. Were loaded to trade company funds in the cryptocurrency market.
According to “people close to the case” (anonymoustherefore) having spilled the beans on the WSJ, the trade team in question would have carried out a $100 million in cryptocurrency trading early this year 2022.
nothing prohibits formally to the group that owns the crypto exchange to trade cryptocurrencies. However, this can raise concerns: if the WSJ claims are true – that Coinbase could potentially trade with its customers.
Coinbase Strikes Back, Sending The Wall Street Journal Back To The Ropes
the answer Coinbase’s scathing attack on anonymous WSJ tipsters didn’t Without delay. The same day, in his Blogthe crypto exchange was held for clarify stuff.
would not be no way trading for the company’s own account, but the trading activities related to your customers. This customer service would be done through a small new team, created for the occasion, and called Coinbase Risk Solutions (CRS).
On top of that, Coinbase buys crypto on your behalf, but as an investment, for its cash flow in particular. And not for speculative trading, as the Wall Street Journal article implied.
“Unlike many of our competitors, Coinbase does not operate a proprietary trading business. (…) In fact, one of the competitive advantages of our Institutional Prime platform is our trading model as an agency, where we act solely on behalf of our clients. Therefore, our reasons and those of our clients are aligned by design. (…) Coinbase buys cryptocurrencies from time to time for its own account, including for operational and cash flow purposes. We do not consider this to be a proprietary trade, as the goal here is not for Coinbase to profit from short-term increases in the value of the cryptocurrency being traded. »
In summary, “Nothing to report, go ahead! » according to Coinbase. Was the famous $100 million transaction carried out on behalf of a wealthy institutional client of Coinbase? Perhaps, at least if crypto exchange is to be believed. Otherwise, Coinbase finds itself in a difficult position with regulators in the question of staking rewardswhich are also highly sought after by institutional investors.
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