Coinbase Has Denied Allegations From The WSJ
Wall Street Journal reported that Coinbase created a trading group that used $100 million of its funds to trade cryptocurrencies. The exchange has denied allegations from The Wall Street Journal that it engaged in proprietary trading. The company said on September 22 that the WSJ had confused its client-driven activities with proprietary trading.
The company examined the performance of its proprietary trading, according to the article, and those acquainted with the product stated the exchange profited. The exchange generated financing through the sale of a structured note to the financial firm Invesco Ltd. Invesco’s official sources verified the transaction.
Wall Street stated that the exchange hired at least four top Wall Street traders for the Coinbase Risk Solutions department, which traded, staked, and locked up cryptocurrency using the company’s capital.
Coinbase issued a blog post in which it categorically disputed the charges. The exchange, according to the article, does not conduct “a proprietary trading business or act as a market maker.”
Coinbase Risk Solutions is intended to assist institutional investors seeking Bitcoin exposure. According to the business, the purpose of this team is to broaden institutional engagement in web3 beyond Hodling.
According to a Coinbase spokesperson:
“Coinbase does not, and has never, had a proprietary trading business. Any insinuation that we misled Congress is a willful misrepresentation of the facts. Coinbase Risk Solutions was established to facilitate client-driven crypto transactions.”
When the exchange officials testified before Congress last year, they denied that the company engaged in proprietary trading. While Coinbase is not prohibited from participating in speculative trading, there are worries about the hazards.
When a financial business invests its assets and the funds of its clients in the market, there is the risk of a conflict of interest and market manipulation.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews