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Coinbase denies claims that it engages in “proprietary trading”

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The largest US cryptocurrency exchange operator, Coinbase, has issued a statement, disputing recent reports that a big chunk of its trading volume comes from proprietary trading.

A recent report by the New York Office of the Attorney General stated that “Coinbase disclosed that almost twenty percent of executed volume on its platform was attributable to its own trading”. In an attempt to clarify this statement, Coinbase yesterday published a blog post, arguing that the statement has been misinterpreted as “self-trading” in the media. The company said that the figure stated in the report represented a “consumer-driven volume via Coinbase Consumer”, a service that executes users’ orders with the company’s exchange platform.

“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,” Coinbase’s chief policy officer Mike Lempres wrote in the blog post.

“Coinbase does not operate a proprietary trading desk, nor does it undertake market making actions,” Lempres added.

In January, last year, Coinbase received BitLicense from regulators in New York, allowing it to provide cryptocurrency trading services in the state. The company said at the time that the licence was “an important validation” of its drive to operate the most secure and compliant digital currency exchange in the world.

In yesterday’s statement, Lempres reiterated that the company’s goal to become “the world’s most trusted place to buy, store and interact with cryptocurrency” and added that the firm “welcome oversight and will continue to work with regulators to promote the cryptocurrency ecosystem”.

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