Accusations and denials – The Rumors travel fast in the cryptosphere, especially when it is the mainstream media that propagates them. But the border between scoop and fake news usually very thin. In the case of the latest claim by the Wall Street Journal (WSJ) against Coinbase, it’s still hard to say where we are exactly. homely ObamASIS or revelation of a scandal potential ?
Should Brian Armstrong’s company have used its own funds to sell cryptos?
the different regulators check The group behind the crypto-stock market is very close Coinbase, especially since his IPO (COIN stock). In a publication dated September 22, the Wall Street Journal accused Coinbase Global Inc. to hire businessmen. They are loaded to negotiate company funding in the cryptocurrency market.
According to “people close to the case” (unknowntherefore) with the WSJ spilling the beans, the group of traders in question would have made a $100 million crypto trade at the beginning of this year 2022.
No one forbids formally to the group that owns the crypto-exchange to sell cryptocurrencies. However, this may raise concerns – if the WSJ claims are true – that Coinbase can trade against its clients.
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Coinbase counterattacks and sends the Wall Street Journal back to the ropes
the ANSWERS The scathing attack on Coinbase by anonymous WSJ informants was not without delay. On the same day, in its blog, the crypto-stock exchange wanted clear things.
It shouldn’t be never trading for the company’s own account, but trading activities relating to its customers. This customer support will be done by a new small team, created for the occasion, and called Coinbase Risk Solutions (CRS).
Besides that, Coinbase buys cryptocurrencies for it, but as an investment, especially for its cash flow. And not for speculative trading, as the Wall Street Journal article explains.
“Unlike most 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, if where we act only for our clients. Hence, our motives and those of our customers customized design. (…) Coinbase buys cryptocurrency from time to time for its own account, including cash flow and operational purposes. We do not consider this proprietary trading, because the goal here is not for Coinbase to benefit from short-term increases in the value of the cryptocurrency being traded. »
In summary, “Nothing to complain about, go ahead! » according to Coinbase. The famous 100 million dollar transaction made for a rich man institutional client from Coinbase? Maybe, at least if crypto exchanges are to be believed. Coinbase is in a difficult position with regulators the issue of staking rewardswhich is also highly sought after by institutional investors.
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