The Wall Street Journal and Coinbase have different definitions. News published purported description of the digital asset exchange’s trading activities earlier this year, which it claims are proprietary trading. Coinbase he answered in a blog post that he did no such thing.
Based on information provided by “people at the company,” the WSJ wrote Thursday that Coinbase made a $100 million transaction that was considered internally as a test trade by the company’s Risk Solutions group, which was created for proprietary trading. Own trading Yippee the practice of banks and financial institutions trading their own money for their own profit rather than doing so in order to receive a commission from a client.
It wouldn’t be illegal for Coinbase to engage in proprietary trading, the WSJ noted, but it could still be worrisome. An institution could, for example, trade against the interests of its clients. Coinbase said in a blog post that “Coinbase does not conduct its own trading activity or act as a market maker,” although “many of our competitors” trade on their own account. The blog post stated:
“The Wall Street Journal published an article highlighting client-driven activities that appear to be mistaken for proprietary trading.”
It is a source of controversy testimony of Alesia HassCEO of Coinbase’s U.S. subsidiary and CFO of Coinbase Global, before the United States House of Representatives Committee on Financial Services on December 8, 2012, in which she stated, as quoted in the WSJ: “We do not engage in proprietary trading on our platform.”
Coinbase made the $100 million transaction in question using money raised through a structured bond that was sold to Invesco Ltd. for a fixed rate of 4.01%, the WSJ wrote. Invesco confirmed to the newspaper that the transaction had taken place.
Coinbase said the Risk Solutions Group:
“It offers a solution to sophisticated institutional investors seeking exposure to the crypto asset class. Some of these investors are still getting to know the crypto markets and are asking us for help with risk management and participation in protocols. […] In doing so, we are following the well-trodden path to Wall Street.”
However, the WSJ claimed that “Coinbase used $100 million to profit from cryptocurrency markets, according to people” who served as its sources.