Coinbase Denies Suggestion that Exchange Engages in Proprietary Trading




When the New York Attorney General’s Office released its “Virtual Markets Integrity Report” this week, the report included an assertion that Coinbase was responsible for roughly one-fifth of trading transactions on its exchange. After media reports suggested that the company was engaging in proprietary trading for its own benefit, Coinbase Chief Policy Officer Mike Lempres responded in a blog post denying the allegation.

In an effort to correct the record, Lempres wrote:

“Coinbase does not trade for the benefit of the company on a proprietary basis. In order to provide an easy-to-use customer experience, Coinbase Consumer quotes a price and then quickly fills the order from our exchange platform (Coinbase Markets). This takes advantage of the liquidity provided by the entire Coinbase ecosystem.

When Coinbase executes these trades, it does so on behalf of Coinbase Consumer customers, not itself.”

Lempres noted that media reports had “misrepresented the trading volume claims made in the report by describing them as “self-trading.” According to him, the twenty percent of trades highlighted in the AG report “represents customer-driven volume via Coinbase Customer.” He emphasized that the company has no proprietary trading desk, and engages in no “market making actions.”

Author: Ken Chase

Freelance writer whose interests include topics ranging from technology and finance to politics, fitness, and all things canine. Aspiring polymath, semi-professional skeptic, and passionate advocate for the judicious use of the Oxford comma.

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