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Coinbase Responds to WSJ in Blog Post About $100M Exchange

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Coinbase and The Wall Street Journal use different meanings. Earlier this year, the newspaper reported on a claimed account of the technology platform exchange’s business transactions, which it said amounted to a proprietary exchange. Coinbase reacted in a blog post, saying it did not.

The WSJ reported on Thursday, citing company sources, that Coinbase executed a $100 million payment that was considered internally as a test exchange by the company’s Risk Solutions company, which was founded for the purpose. commercial activities. Proprietary trading has been the exercise of financial institutions and banks buying and selling their funds for their profit rather than for the benefit of a client commission.

The WSJ mentioned that while proprietary trading would not have been criminal for Coinbase, it can still be a cause for concern. For example, an organization can trade for the preferences of its customers. Coinbase said in a blog post that it does not operate as a derivatives trading company or behave as a market maker, although many competing companies do. According to this blog post, The Wall Street Journal wrote an article about client-focused stocks, which seem to be confused with proprietary trading.

The origin of the scandal is the hearsay evidence of Alesia Hass before the Financial Services Committee of the United States House of Representatives on December 8, 2021, inside which she claimed, as quoted in the Wall Street Journal, that Coinbase does not participate in any proprietary accounts. trading on their console.

In a documented pre-trial press release, Circle supported congressional attempts for nationwide licensing and federal oversight of stablecoin lenders, saying many were too important to ignore. Cascarilla tended to agree, calling U.S. banking markets insufficient to cope with the changing technological financial system, but the distributed ledger may provide a potential answer.

What was the $100 million deal for?

The money for the $100 million cash transfer was brought in through an organized note negotiated to Invesco Ltd. at a fairly fixed price of 4.01%, according to the WSJ. Invesco confirmed the payment to the same newspaper.

According to Coinbase, the Risk Solutions team provides solutions for advanced institutional investors seeking visibility in the virtual currency asset class. Many of these shareholders are not yet familiar with virtual currency markets and seek their expertise in risk management and protocol participation. They are continuing a well-worn road on Wall Street in doing so.

On the other hand, the WSJ claimed that Coinbase was using the $100 million to benefit the digital currency industries, citing sources.

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