Does Coinbase manipulate crypto? Brian Armstrong defends himself

The game’s rules – Coinbase was already suspected of insider trading in 2017. The scholarship subsequently benefited from a relaxation. Some cryptophiles continue to make such claims today. These allegations directly affect the process of listing a token on the platform. Coinbase CEO Brian Armstrong offered lengthy explanations to defend his company against these accusations. Explanations.

Listing of cryptocurrencies on Coinbase: no darling!

Brian Armstrong, attempted to clarify some gray areas related to its token listing processin a blog post from April 28, 2022. This statement from the number 1 of the stock exchange, aims to calm concerns related to two main issues.

Cryptophiles would have said on the one hand “that they did not always understand why coinbase listed some assets and not others “. They would also have made remarks on the fact that “people seemed buy certain assets just before that” the stock exchange announces their listing. These investors would then benefit from “price movements” “sometimes” following listing announcements of said tokens.

Brian Armstrong first recalled that the process of listing an asset on the platform is “rigorous and time-consuming”. Some tokens are notably much more difficult to analyze for technical reasons.

Coinbase would thus not demonstrate no “favouritism”. The exchange would review “the assets as quickly as possible”. It would further list all cryptocurrencies within its capabilities, as long as the platform deems it “safe and legal”.

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Token listing and information asymmetry: it can happen!

However, the CEO of Coinbase wants to be reassuring. Indeed, Brian Armstrong admits, however, that some customers – not allcan access data which allow them to anticipate a possible quotation of an asset:

“This could be, for example, using on-chain data to detect when Coinbase is testing new asset integrations or using small differences in Coinbase API responses to detect when assets are configured, but not yet launched”

Brian Armstrong also acknowledges that people “inside Coinbase” can disclose “willfully or unwillingly”information to people outside.

The exchange, however, reportedly has a “zero tolerance” policy regarding such illegal activities. It would carry out investigations aimed at combating such acts. Employees who are involved in such activities would then be “immediately terminated and referred to the competent authorities (potentially for criminal prosecution)”.

The CEO of Coinbase also recalls the existence of a trading policy. It oversees stock exchange employees and other insiders who may buy or sell the company’s shares. This policy also prohibits these individuals from trading assets listed on the platform.

Brian Armstrong, CEO of Coinbase.
Brian A.rmstrong

Addition of tokens on Coinbase: modifications for more fair play

It is then necessary to fight against possible asymmetries of information. To do this, Coinbase plans to bring changes to the token listing process over the next few quarters.

The exchange will announce in the future, the listing of an asset once this decision has been made, even before the start of the technical integration work for this rating. Investors who closely monitor on-chain data will therefore not be able to benefit from such technical information on their own.

Brian Armstrong further recalls that the exchange had announced in March 2022, the use of a new experimental label. This label will be for certain assets that are only suitable for experienced traders.

This label aims to alert users of the platform to the specific risks they take when trading these assets. The exchange plans to develop new labels and features that go in this direction.

Coinbase will also allow the community to rate and comment assets that are listed or not on the platform.

The stock market finally plans to invest more to improve your ability to evaluate a token : analysis of the economic model of the asset, use of on-chain investigation tools. Coinbase will thus improve the selection of assets that should be listed or removed from its platform.

These rather detailed explanations of the process of listing a token on Coinbase, come a few days after the exchange has added StepN, GST and GMT tokensto its platform.

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