Crypto exchange Coinbase says it does not engage in proprietary trading, a speculative investment practice that restricts federal regulation known as the Volcker Rule due to its role in the 2008 financial crisis.
In a new blog post, the California-based company refutes a Wall Street Journal claim that it uses its own money to speculate on crypto assets.
The newspaper says in an article published on Sept. 22 that Coinbase hired at least four top-tier traders to use the company’s own funds to trade cryptocurrencies to trade, stake and lock profitably. The report states that the folks at Coinbase refer to the activity as proprietary trading.
“Coinbase purchases cryptocurrency as a principal from time to time, including for our corporate treasury and operational purposes. We do not consider this to be proprietary trading as Coinbase is not designed to benefit from short-term increases in the value of the cryptocurrency being traded.”
Coinbase says it has formed a new team called Coinbase Risk Solutions (CRS), but it was formed to offer solutions and support to institutional investors looking for exposure to digital assets.
“The goal of CRS is to expand institutional participation in web3 beyond HODLing.
In doing so, we follow a well-trodden path on Wall Street, where financial services firms offer their clients multiple ways to gain exposure to new asset classes and manage specific risks. We have tools and policies in place that reflect best practices in the financial services industry and are designed to manage conflicts of interest.”
Coinbase faces allegations of proprietary trading as its CEO Brian Armstrong calls crypto regulation a national security issue in the US. The company is also preparing to offer its services in the Netherlands after becoming the first major crypto exchange to receive approval from the Dutch central bank to operate in the country.
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Source: Crypto News Deutsch