Coinbase Users Top 35 Million as Exchange Continues on Growth Pattern 

Cryptocurrency exchange Coinbase has been on a bit of a roll recently, and the company continues to see incredible growth in 2020. In a new report, the San Francisco-based exchange confirmed that it had crossed the 35 million user count, with over 100 countries now accessing its services. 

Regulatory Approach Pays Off for Coinbase

Coinbase’s largesse in the crypto industry isn’t a novelty. Its trading platform, Coinbase Pro, is currently the third-largest crypto exchange, with data from CoinMarketCap showing it with $547 million in daily trading volumes today alone.

However, unlike many other exchanges, Coinbase has made a bit of a name for pandering to regulators in a bid to gain approval and expand stably. While many have criticized the company for taking this approach, it has continued to grow. As the new report claims, Coinbase now has 35 million users — a feat which, as the company adds, now makes it the largest regulated exchange in the world. 

The 35 million user mark included both retail and institutional clients. It is five million more than the exchange had last year, showing that Coinbase’s regulatory-first approach just might be paying off. 

This isn’t to say that Coinbase hasn’t gotten some criticism for its focus on regulatory acceptance. The exchange was torched for its purported deal with the United States Drug Enforcement Agency (DEC) and the Internal Revenue Service (IRS) over its Coinbase Analytics tool.

The move immediately drew the ire of many, with a Twitter poll from Bitcoin trader and commentator Josh Rager showing that up to 47 percent of the exchange’s users could leave the platform.

Explaining the reason for this licensing, Coinbase chief executive Brian Armstrong said on Twitter that Coinbase needed the licensing to stay compliant with regulations and improve the interactions between fiat and crypto. He added that building an analytics platform is expensive, and the exchange wanted to recoup some of the costs by selling them.

“If people want true privacy, that is what privacy coins are for. I’m a fan of privacy coins because I think everyone should have more financial privacy. It will be similar to how the internet moved from HTTP to HTTPS over time,” Armstrong added.

Strategic Purchases Boost Service Offering

Coinbase’s growth is coming amid a rise in institutional interest in cryptocurrencies. So far, several institutional investment companies in the space have reported significantly higher assets under management, with others believing that institutional interest had been the industry’s saving grace amid the global pandemic.

To position itself, Coinbase acquired Tagomi, one of the industry’s top brokerage institutions. In a press release, Coinbase claimed that it had chosen to purchase Tagomi after noticing the industry in an “inflection point,” where more institutional investors are coming in.

“We’re proud to build the foundation for the next wave of crypto investors by bringing onboard the first electronic prime brokerage in crypto. Even in a time of uncertainty, we view now more than ever as the time to push forward our mission of building the crypto-economy,” the announcement claimed.

Coinbase had allegedly been in talks to acquire Tagomi last year, with rumors claiming that the exchange had presented a $150 million bid. However, Coinbase’s Vice President of communications, Rachael Horwitz told Cointelegraph that the rumors were false.

Coinbase’s announcement didn’t reveal the amount it paid for Tagomi or whether it would be changing the brokerage firm’s leadership structure.