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Coinbase responds to WSJ in a blog post about a $100M trade

Coinbase
Coinbase

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Coinbase and The Wall Street Journal use different meanings. Previously this year, the paper reported a claimed account of the technology platform exchange’s commercial transactions, which it claims amounts to proprietary exchange. Coinbase reacted inside a blog article, saying it had not done so.

The WSJ reported on Thursday, citing company sources, that Coinbase executed a $100M payment that was regarded internally as a trial exchange by the firm’s Risk Solutions company, founded with the intent of trading activities. Proprietary trading has been the exercise of financial institutions and banks buying and selling their funds for their benefit instead of for the benefit of a customer commission.

The WSJ mentioned that while proprietary trading wouldn’t have been criminal for Coinbase, it may still be a cause for worry. For instance, an organization may exchange against the preferences of its customers. Coinbase stated inside a blog article that it doesn’t function as a derivatives trading company or behave as a market creator, even though numerous competing companies do. According to this blog article, The Wall Street Journal wrote a piece about client-driven actions, which appear to mix up with proprietary trading.

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

In a documented press statement previous to the trial, Circle backed Congress’ attempts for nationwide licensing and federal monitoring of stablecoin lenders, saying many have been too big to overlook. Cascarilla tended to agree, characterizing the US banking markets as insufficient for dealing with the evolving technology financial system, but distributed ledger may give a potential answer.

What was the $100M transaction for?

The money for the $100 million money transfer was brought up through an organized note traded to Invesco Ltd. at quite a set price of 4.01%, according to the WSJ. Invesco confirmed the payment to that same journal.

According to Coinbase, the Risk Solutions team provides solutions to advanced institutional investors seeking visibility in the virtual currency asset class. Several of these shareholders are still unfamiliar with virtual currency markets and seek their expertise in risk management and protocol participation. They are pursuing a well-worn route on Wall Street by doing so.

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

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